Competent sales preparation by the investor should also include conversion considerations. Do certain conversions without selling the core entitlement (securitisation) suffice or should such changes (e.g. change of the ownership position or property leasing) be made prior to disinvestment?
- Ownership situation
- Contribution to a corporate body (indirect property investment) and sale of the legal entity (so-called share deal)
- Rule
- Buyers do not usually wish to enter into a share deal due to the commitment and tax risks or require price reductions as an incentive
- Exceptions
- Portfolio sales
- Management properties
- Rule
- Creation of condominium ownership
- indispensable
- for converting rental apartments into condominium ownership
- Retention of one condominium apartment from several apartments
- Optional
- Rule
- Exception
- Certain cases where creation of condominium ownership encourages sales
- indispensable
- Merger of Legal Entities
- Absorption
- “Vendor” receives shares from the “buyer”
- Quasi merger
- Exchange of shares with additional charge
- Consolidation
- Two property investors wish to merger their portfolios
- Pseudo-merger
- Takeover of assets and liquidation of the target company
- Absorption
- Contribution to a corporate body (indirect property investment) and sale of the legal entity (so-called share deal)
- Property
- Preparation for sale
- Conversion of rental apartments into condominium ownership
- Condominium owners expect more upgrades of the housing stock (impact sound [caution is required in respect of old properties] + sanitary facilities] > renovation
- Continued use / disposal of ownership
- Alternative to mortgage financing
- Sale and leaseback > real estate leasing
- Securitisation
- Execution of owner certificates of indebtedness and sale to investors
- Attention
- Permit requirements?
- Supervision by the Financial Market Supervisory Authority (FINMA)?
- Legislation on the acquisition of real estate by foreigners [Valuation Act]?
- Possible tax consequences
- Attention
- Securitisation (securitisation of real estate receivables)
- Asset Backed Securities (ABS)
- Mortgage Backed Securities (MBS)
- Other options
- Execution of owner certificates of indebtedness and sale to investors
- Secondary Sale
- e.g. Privatisation of housing
Further Information
- Investment properties – conversion of the property investment