The vacancy rate is low at less than 2%, rental reports are growing at a rate of more than 2% on a like-for-like basis and valuations are robust.
The 2023/24 financial year of Edmond de Rothschild Real Estate SICAV (ERRES) closed on March 31, 2024 and the results will be published on June 20, 2024.
- Portfolio News: low vacancy rate (<2%), acceleration of rental growth (>2% at constant scope), completion of strategic sales generating distributable capital gains and commercial acquisitions accretive to distribution yield
- Self-financing of growth: internal growth strategy without recourse to capital increases during the 2024/25 financial year thanks to the solid equity base (~2 billion francs) and secure debt over almost 5 years for a rate weighted average of less than 1.4%
Portfolio News
The portfolio benefits from excellent fundamentals thanks to the predominantly residential positioning and located in Geneva: the vacancy rate is low at less than 2%, rental income is growing at a rate of more than 2% on a like-for-like basis and valuations are robust.
Construction and renovation activity is sustained with 8 ongoing projects monitored by our teams and which will contribute 10 million francs in additional rental income by the end of 2025.
Asset sales continued both on non-strategic assets purchased during portfolio acquisitions and on assets where the development carried out during previous years made it possible to crystallize gains contributing significantly to the realized distributable result. The Manager also seized three commercial acquisition opportunities on buildings located in excellent locations and contributing positively to the profitability of the portfolio thanks to gross yields above 6%.
Self-financing growth
With a real estate portfolio value of 2.8 billion (as of 09/30/2023), the ERRES-Swiss portfolio has reached a critical size. The Board of Directors and the manager decide to focus the strategic objectives on the following internal growth drivers:
- Continued development of rental properties while offering quality spaces to tenants
- Rigorous monitoring of construction sites with a view to delivering numerous new construction projects representing future rental income of more than 10 million francs
- Obtaining permits to densify the existing portfolio by generating returns greater than 5%
- The implementation of energy renovations actively contributing to the reduction of CO emissions2 and the development of buildings
To finance this internal growth, and taking into account the external financing secured over a period of almost 5 years at a weighted average rate of less than 1.4%, the Board of Directors and the manager have decided to favor the recycling of capital at through strategic sales. It is therefore not planned to resort to a capital increase during the 2024/25 financial year.
