Jaume Sabater

Edmond de Rothschild Real Estate SICAV
Jaume Sabater
Manager, Investment Fund Department
Swiss Real Estate Funds Day
January 2013

Setting up an investment philosophy and
factors of influence
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ERRES in summary
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The SICAV history
» March 2011: Launch of the 1st sub-fund, ERRES-Swiss, with 300 Mio CHF equity
» February 2012: FINMA approval for a new sub-fund
» March 2012: Capital increase for ERRES-Swiss sub-fund
» April 2012: Launch of the 2 nd sub-fund, ERRES-Helvetia with 200 Mio CHF equity
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Key numbers (as of 31.12.12)
» 2 investors sub-funds
» Cumulated Real Estate Asset Value: 654 mio CHF
‒ Swiss 404 mio CHF
‒ Helvetia 144 mio CHF
‒ Under construction 61 mio CHF
‒ To be developed in 2013 45 mio CHF
» Number of assets (including projects): 45
» Cumulated NAV: 612 mio CHF
» Rental surface: 155’000 m 2 (incl. 21’000m 2 in construction or to be developed)
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ERRES Swiss – Allocations
Zürich
16%
Others
Basel 5%
6%
Geneva
31%
Commercial
46%
Residential
29%
Fribourg
22%
Vaud
20%
Mixed
25%
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ERRES Helvetia – Allocations
Vaud
12%
Bern
8%
Commercial
36%
Valais
14%
Geneva
50%
Residential
58%
Fribourg
16%
Mixed
6%
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Investment philosophy
& factors of influence
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Factors of influence
Legal framework
Investors
Manager
Investment
philosophy
Board of
directors
Real estate
market
reality
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Key factors of investment philosophy
Location
Value
creation
Long
term
approach
Quality
Flexibility
Sustainable
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Key factors of investment philosophy (1)
» Location:
‒ Location remains a fundamental element of real estate investment (mobility, liquidity,
capacity to rent ,…)
‒ Central locations provide more stability over the long term (cash flow & value)
» Sustainable
‒ Securing cash flow for the long term with
‒ Moderated rents for residential
‒ Long term rents for commercial space
‒ Involvment of commercial tenants in the development and fitting out of the space
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Key factors of investment philosophy (2)
» Value creation
‒ Development projects
‒ Renovation programs
‒ Transforming building affectation (commercial to residential)
» Flexibility
‒ Celerity in execution
‒ Understanding the expectations of the different market players & counterparties
‒ Selling non strategic buildings
» Quality
‒ Transversal factor
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Investment example 1: Les Cèdres de Cologny (GE)
Residential development
» 2 buildings under construction (delivery summer 2014)
» Complex of 10 buildings (7 in PPE)
» 68 apartments from 3 to 5 rooms
» State controlled rents
» Approved rental income: 1.5 mio CHF
» Estimated cost: 28 mio CHF
» Gross yield: 5.26 %
Location
Value
creation
Long
term
approach
Quality
Location:
Quality:
Located at the heart of a centennial park in a
prime residential location near Geneva.
Excellent public transports access
Minergie standards
Sustainable: Controlled rents
Flexibility
Sustainable
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Investment example 2 : Margarethenstrasse 87 (BS)
Heavy renovation/transformation project
» Mixed building Commercial (75%) / Residential (25%)
» 35 new apartments to replace the commercial surface
» Renovation of 12 existing apartments
» Projected rental income: 1.37 Mio CHF
» Total investment cost: 25 Mio CHF
» Target gross yield: 5,15%
Location
Value
creation
Flexibility
Long
term
approach
Sustainable
Quality
Location:
Located near to rail-station in a future
pedestrian road
Value creation: Managing planification and construction
process
Flexibility:
Diferent transformations alternatives
reviewed and negociations with existing
commercial tenants
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Investment example 3: Mouille Galand 2-2F (GE)
» 7 buildings
» 282 apartments
» Large renovations over the last 2 years
» Rental incom: 2.5 mio CHF
» Gross yield: 5.3 %
Location
Value
creation
Long
term
approach
Quality
Value creation: Obtaining Minergie label (additional
insulation and technical installations
improvement
Continue renovation of apartments
Flexibility:
Negociations with different sellers
Sustainable:
Medium rent 255 CHF/m2/an
Flexibility
Sustainable
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Investment example 4: Rue Rothschild 60-64
» 38 apartments
» Rental surface: 2’856 m2
» Rental income: 1.1 mio CHF
» Gross yield: 5.2%
Location
Value
creation
Long
term
approach
Quality
Location:
Flexibility:
Geneva center, 800 m from the rail-station.
Near the «Quartier des Nations» block
Celerity in negociation and execution
Sustainable: Rents 20% under market
Flexibility
Sustainable
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Investment example 5: AGORA (FR)
AGORA- Av. Louis d’Affry (FR)
» Mix apartments- offices- retail
» 15’000 m2 rental surface
» Rental income: 4.1 mio CHF
» Gross yield: 5.8%
Location
Location:
Direct access to rail and bus stations
Value
creation
Long
term
approach
Quality
Value creation: Tenant relations:
Alcon-Inditex-Activ Fitness.
Urban duplex concept
Quality:
Minergie standard
Flexibility
Sustainable
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Conclusion
» Need of coherence between:
‒ Investment philosophy
‒ Portfolio construction
‒ Investors expectations
‒ Listing
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Disclaimer
Edmond de Rothschild Real Estate SICAV (the "SICAV"), Geneva is an externally managed société d’investissement à capital variable incorporated in Switzerland in the "real
estate" category, as defined in the Swiss Collective Investment Schemes Act (CISA). The SICAV has delegated administration, management and distribution to its Fund
Management Company, CACEIS (Switzerland) SA, Nyon, which has in turn delegated the SICAV's investment management and the exclusive distribution of its shares to
Banque Privée Edmond de Rothschild SA, Geneva, which also has sub-distribution authority. Banque Cantonale Vaudoise, Lausanne is the SICAV's custodian. Subscriptions
shall be valid only of the basis of the current prospectus including the investment regulations and articles of association, together with the simplified prospectus and the latest
annual report (or semi-annual report if it is more recent). These documents may be obtained free of charge from the headquarters of the SICAV, Banque Privée Edmond de
Rothschild SA, rue de Hesse 18, 1204 Geneva, from CACEIS (Switzerland) SA, chemin de Précossy 7-9, 1260 Nyon and from any sub-distributors.
This document is provided for informational purposes only and does not constitute investment advice or a recommendation to make or liquidate an investment or to effect any
other type of transaction in relation to the SICAV. Nor does it constitute a public tender or an offer or solicitation to subscribe shares in the SICAV. The SICAV, CACEIS
(Switzerland) SA and Banque Privée Edmond de Rothschild SA do not warrant the accuracy or exhaustiveness of this document, and disclaim all liability for losses that could
arise from using the information herein. This document reflects the opinions of the SICAV. Investors are advised to examine the content hereof with a financial adviser to
ascertain whether an investment in the SICAV is appropriate in view of each investor's circumstances, taking account of his investment objectives, risk profile and personal,
financial, regulatory and tax situation. All investments entail risks, particularly the risk of fluctuations in values and returns. Historical performances and financial market
scenarios are no guarantee of present or future returns. Any data on performances mentioned herein do not include fees and other charges levied upon the issue and
redemption of the SICAV's shares. Any reproduction of this document, in whole or in part, is prohibited without the SICAV's prior consent in writing.
The main investment objective of each sub-fund shall be to preserve the substance of capital invested long term and to distribute appropriate income. To the extent possible the
SICAV's Board of Directors and Investment Manager shall strive to pursue the specific investment strategy drawn up for each sub-fund as set out in the SICAV's Term Sheets
relating to the investment regulations. The implementation of said strategies may nevertheless be subject to constraints and to regulatory and legal procedures such as the
Swiss rules on purchasing property for residential purposes. No assurance can be given by the SICAV, the Board of Directors, the Fund Management Company or the
Investment Manager that residential property contemplated for purchase by the SICAV will be confirmed by the relevant federal and/or cantonal authorities as not being subject
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This document is not intended for persons subject to legislation prohibiting their access to such information by virtue of their nationality, status or domicile. In particular, the
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