Once again, the Baloise Swiss Property Fund (BSPF) generated nearly 80 per cent of its rental income from residential use in its second financial year. With an overall increase in value of CHF 27.1 million in the 2019/20 financial year (2018/19: CHF 19.1 million), the fund proved its resilience even during the coronavirus pandemic. The investment yield rose from 3.9 per cent in the 2018/19 financial year to 5.7 per cent in 2019/20.

In the reporting year, the BSPF acquired a residential property in Onex and a new construction project in Kriens that includes apartments and retail space. The property located at Am Kreuzbach 22–28 in Wangen was sold.

As at the end of the fund's financial year on 30 September 2020, the BSPF portfolio comprised 55 established properties and one residential construction project. The market value of the portfolio increased from CH 565.9 million as at 30 September 2019 to CHF 610.2 million as at 30 September 2020.

The gross rental income generated by the BSPF increased from CHF 16.8 million in the 2018/19 financial year to CHF 25.0 million in 2019/20 (up by CHF 8.2 million). This increase was attributable to rental income from 20 properties that had been acquired by asset transfer with effect from 1 September 2019 and the acquisition of the property at Chemin de la Traille 7–15 in Onex with effect from 1 December 2019. The rent default rate stood at 5.5 per cent as at 30 September 2020 (30 September 2019: 5.3 per cent), including one-off rent payment waivers due to COVID-19. In mid-May 2020, the fund managers decided to support tenants of commercial property units by offering one-off rent waivers totalling CHF 0.1 million in order to protect income over the long term and avoid vacancies during the COVID-19 crisis. Adjusted for this one-off item, the rate of rent defaults fell to 5.1 per cent.

In the 2019/20 financial year, the fund incurred operating expenses of CHF 4.5 million. The fund operating expense ratio (TERREF GAV) was 0.79 per cent (2018/19: 0.82 per cent). Net income after deduction of other fund-related expenses came to CHF 14.1 million for the 2019/20 financial year (2018/19: CHF 14.3 million) and the EBIT margin stood at 64.4 per cent (2018/19: 67.6 per cent).

The fund managers intend to further expand the property portfolio and are reviewing the option of conducting a capital increase in the third financial year (2020/21) to finance this expansion. At the same time, the fund managers continue to optimise the portfolio by leveraging potential for additional rental income at local level through value-enhancing refurbishment and subsequent re-letting.

The BSPF fund managers intend to participate in the Global Real Estate Sustainability Benchmark (GRESB) for the first time in the spring of 2021. In addition, the entire existing portfolio will be analysed in accordance with the criteria for the Swiss cantonal energy certificate for buildings (GEAK Plus4) in the fund's third financial year. The purpose of this step is to further refine the modernisation strategy (including profitability calculation) for each property and to track savings potential regarding carbon emissions and energy consumption transparently in the annual sustainability report.

Baloise Asset Management AG has been in existence as an investment adviser and asset manager ever since the Corporate Division Asset Management (KB AM) was founded in 2001. Baloise Asset Management meets the growing needs of the Group and of third parties for high-quality financial products and expert portfolio management. The Baloise pension investment foundation (BAP) was founded in 1995 for the management of funds in connection with Pillars 2 and 3a of the Swiss social security system. Luxembourg-based SICAV Baloise Fund Invest (LUX) (BFI) was founded in 2001 in order to offer proprietary fund solutions in Baloise’s retail business. In 2018, Baloise Asset Management launched its first real-estate fund for qualified investors, the Baloise Swiss Property Fund.