Target Information

The Patrimonium Swiss Real Estate Fund (SIX: PSREF), a publicly listed real estate fund, has actively pursued its growth strategy in the lucrative investment landscape of the first half of 2024. The fund has successfully acquired three residential properties comprising a total of 92 flats and spanning an area of approximately 7,700 square meters in the municipalities of Lausanne, Cheseaux-sur-Lausanne, and Yverdon-les-Bains. The aggregate value of these acquisitions is around CHF 40 million.

These properties are strategically situated in close proximity to essential shopping amenities and public transportation, enhancing their attractiveness to potential renters. The residences are well-maintained and exhibit promising rental reserves. Moreover, there are significant opportunities to improve the energy efficiency and reduce CO2 emissions, especially through the integration of district heating connections.

Industry Overview in Switzerland

The Swiss real estate market, particularly in the residential sector, remains robust, backed by strong demand driven by urbanization trends and population growth. In recent years, the country has seen a steady rise in the demand for rental properties, especially in key urban agglomerations such as Lausanne, where the availability of residential units cannot keep pace with the rapid population growth.

Western Switzerland, known for its picturesque landscapes and high quality of life, has emerged as a focal point for both domestic and international investors. The area’s economic stability, coupled with a diversified economy, makes it an attractive destination for real estate investments. Rental prices in this region continue to trend upward, supported by persistent demand.

Investment in residential properties in this region is further propelled by an increasing trend toward sustainable living and energy-efficient infrastructures. Regulatory frameworks in Switzerland increasingly favor investments that prioritize sustainability, setting the stage for long-term value enhancement in the residential sector.

Rationale Behind the Deal

This acquisition aligns with Patrimonium's strategy to bolster its portfolio, particularly in the Vaud region, where the fund now enhances its holdings by increasing its portfolio share in this area by 10%, bringing it to a total of 39%. Furthermore, this transaction raises the fund's residential asset share to 78%, underscoring its commitment to the residential real estate market.

By acquiring well-located and well-maintained properties, Patrimonium aims to capitalize on the existing rental reserves while also advancing sustainability initiatives through potential energy improvements. The acquisition not only aims to yield immediate rental income but also positions the fund for long-term capital appreciation as the properties' environmental impact is improved.

Investor Information

The Patrimonium Swiss Real Estate Fund was established in 2007 and operates in compliance with Swiss law according to the Federal Act on Collective Investment Schemes. It is authorized by the Swiss Financial Market Supervisory Authority (FINMA). The fund is managed by Patrimonium Asset Management AG, based in Baar, which specializes in private markets.

With assets exceeding CHF 1.2 billion as of March 31, 2024, Patrimonium Asset Management AG provides diverse investment opportunities in property, private equity, private credit, and infrastructure. The firm boasts a strong workforce of 70 professionals across its offices in Lausanne-Crissier, Zurich, and Baar, demonstrating its capability to navigate the complexities of the Swiss real estate market.

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The recent acquisition by the Patrimonium Swiss Real Estate Fund presents a strategic investment opportunity that capitalizes on favorable market conditions in western Switzerland. With its focus on sustainably enhancing properties and its well-established position in the residential sector, the fund is well-placed to generate attractive returns for its investors over the long term.

Given the advantageous location of the acquired properties and the proven demand for rental units in the region, this deal appears to be a prudent investment. The potential for improving energy efficiency adds an additional layer of value, aligning with current trends towards sustainability and responsible investing.

Furthermore, the increased portfolio share in Vaud and the emphasis on residential assets reflect a well-thought-out strategy aimed at diversification and income stability. This move not only enhances the fund's position but also demonstrates a commitment to responding proactively to market demands.

Considering these factors, it seems likely that this investment could yield strong returns over time, marking it as a potentially good move within the context of the current market dynamics.

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