Immo-Flash

For the end of October/beginning of November 2020, the fund management company UBS Fund Management (Switzerland) AG is planning a capital increase with subscription rights with a volume of around CHF 86 million for UBS Direct Urban (Swiss Security Number 19294039). The objective of the capital increase is to attract additional funds for the purchase of properties, to finance renovation and construction projects, and to repay external debt. The exact terms of the planned capital increase will be announced at the end of September 2020. The fund management company reserves the right to postpone the capital increase depending on market developments.

With UBS Direct Residential¹ and UBS Direct Urban, Asset Management’s Swiss real estate business has two smart solutions for direct investments in property. This provides investors with an advantage, especially in terms of taxation: according to the Swiss Federal Act on Direct Federal Taxation, income from direct property ownership is taxed at the fund level itself and is therefore generally tax free for the unit holder (assuming tax residency in Switzerland). Likewise, capital gains from direct property ownership are taxable only at the level of the property fund (assuming tax residency in Switzerland).

UBS Direct Urban embodies direct investments in residential buildings and commercial properties in urban locations as well as a high-quality and diversified portfolio. The focus is on sustainable construction.

UBS Direct Residential invests primarily in residential buildings and properties with potential for development, where investments focus on selected urban agglomerations in the German-speaking area of Switzerland. The fund safeguards and grows sustainable profitability by means of organic growth, such as renovations and consolidating space in existing structures, as well as targeted acquisitions.

UBS Direct Residential and UBS Direct Urban are suitable for long-term oriented investors who expect attractive returns and are looking for opportunity in the growth market.

Effective as of the beginning of August 2020, UBS Direct Residential succeeded in adding two properties to its portfolio at very good locations with an investment volume of around CHF 31 million.

The property in Baden (Aargau) is situated on Bruggerstrasse and comprises 44 apartments and 46 parking spaces. The residential complex dating back to 1987 has undergone regular maintenance and renovation work, which is reflected in its well-kept appearance. The location is easily reached by public and individual transport.

The second property, a residential and commercial building dating from 1953/54, is located in a mixed-use zone in Basel’s up-and-coming “Klybeck” district, which offers a wide range of amenities and facilities. The fully let property comprises 20 apartments, a retail area, an office area, three commercial areas, and a total of 22 car parking spaces.

Both properties provide potential for rent increases, and the property in Basel has unused capacities that can be exploited over the medium to long term. The acquisition makes a contribution to stability and increases the earnings base as well as improving the quality in terms of location of UBS Direct Residential’s overall portfolio.

In 2012, UBS AST-KIS succeeded in purchasing two properties on Rührbergstrasse in Birsfelden as part of a “sale and lease back” transaction. Since then, Legacy Pharmaceuticals Switzerland GmbH has been one of the top five largest tenants of the investment product. The many years of working together have given rise to a well-established and efficient collaborative arrangement. It now gives us great pleasure to announce that this important partnership will remain in place for the future, which means that both parties will continue to benefit from this business opportunity. The rental agreements for both properties were extended ahead of the determined time frame by 20 years.

UBS «Anfos» is planning a replacement building in an in-demand residential location on Alte Landstrasse to the north of Kloten. Now that a legally binding building permit has been issued, there is nothing standing in the way of the project inception. Construction work is due to commence before the end of 2021.

The current complex with 52 apartments dates from 1963. Three new buildings with 108 attractive 1.5–4.5 room apartments and a two-storied parking garage with 123 parking spaces as well as 144 bicycle parking places are scheduled to be built on the site between Alte Landstrasse, Chränzlerstrasse and Weinbergstrasse by 2023. With the implementation of the project, the sustainability objectives will be consistently applied. The buildings with Minergie certification will have geothermal probe heat pumps and photovoltaic systems. With the aim to promote electromobility, the parking garages are planned to include charging stations. Using a brownfield site for the new replacement building in Zurich-Kloten is in line with the strategy of inner growth pursued by UBS «Anfos».

The rental market remained largely impervious to the consequences of the COVID-19 pandemic on the property market in general. At the height of the lockdown, residential properties suddenly became a place of refuge where most daily activities took place, which meant that there were no consequences for rent payments in this sector. The pandemic had a multifaceted impact on demand for rental apartments. Immigration to Switzerland decreased in the first half of the year as a consequence of the exceptional situation, but only minimally by -5.7% in a year-on-year comparison. In contrast, the concentration of emigration has decreased even more, which means that net migration last June (26,000 persons) saw an increase of 5.4% on the previous year. As migratory movements will probably remain curbed over the second half of the year, the growth in demand on the Swiss residential market is also likely to fall slightly.

We believe that long-term success is only possible if we incorporate not only economic but also social and environmental aspects into our decision-making. We adhere to the UN's 17 Sustainable Development Goals (SDGs), which came into force in 2016, focusing on eight selected goals in particular. One of these is the following:

We need the support of collaborative partnerships to achieve our sustainability targets. With this in mind, we work together closely with existing partners who share our goals and values, while also cultivating new partnerships to deliver additional expertise.

Additional information on the topic of sustainability at RE-CH is available here. Further information on the SDGs can be found on the UN website.

^{Picture: UNO}

A new section of our homepage recently went live under the title “In the media.” We will use this section to provide visitors to the website with articles published by other parties on Real Estate Switzerland and its properties, as well as exciting interviews with our members of staff.

Feel free to have a look at the reading material we have already uploaded!

1 UBS «Anfos» = UBS (CH) Property Fund - Swiss Residential «Anfos», UBS «Foncipars» = UBS (CH) Property Fund - Léman Residential «Foncipars», UBS «Sima» = UBS (CH) Property Fund - Swiss Mixed «Sima», UBS «Swissreal» = UBS (CH) Property Fund - Swiss Commercial «Swissreal», UBS Direct Residential = UBS (CH) Property Fund – Direct Residential, UBS Direct Urban = UBS (CH) Property Fund – Direct Urban, UBS AST-IS = UBS AST Real Estate Switzerland, UBS AST-KIS = UBS AST Commercial Real Estate Switzerland, UBS (CH) Property Fund – Europe = UBS PF Europe