Divestment Properties

Evaluation of the real estate to be divested is based on the following aspects, whereby this list is not exhaustive:

  • Owner Strategy
    • Trading-oriented owner strategy
    • Adjustment of owner strategy to trading weighting
    • Overweighting in the property portfolio
      • Geographically
      • On the use side
        • Residential
        • Office
        • Commercial
      • Property obsolescence
    • Change in the investor (risk) profile
      • Switch to another form of investment
      • Stock exchange or market cycle related
      • Changes in the economic climate
        • in Switzerland
        • worldwide
        • in the users’ line of business
    • Land taxes
      • Upon expiry of the holding period
        • with reasonable tax consequences (e.g. canton of Zurich / 10 years holding period)
        • with optimal tax consequences (e.g. canton of Zurich / 20 years holding period)
      • upon the occurrence of an optimal constellation (current market value, holding period and price trend “20 years ago” in the canton of Zurich)
  • Life Cycle
    • Tenants
      • Aging tenants
      • Higher tenant churn rate
      • Change in the type of tenants
        • Property-specific new tenant focus (low-income tenants, tenants with immigration background etc.)
    • Property no longer meets the contemporary needs of users > disinvestment
      • Residential
        • No longer based on number of rooms, but on users, while still attracting a range of users (to prevent an overly narrow tenant focus)
        • Apartments for single people, co-inhabiting couples or 60+-persons
          • Dinkis (double income no kids)
          • Elderly persons, who move from a detached house to an apartment
        • Family apartments
          • Larger rooms
          • More rooms (double income three kids / room for au pair)
          • Larger windows
          • Possibility of combining living and working
        • Multi-generational housing
        • Retirement properties (combined housing and care)
      • Commercial
        • Large rooms, can be arranged individual by making tenant improvements
        • Halls that can be customised for production, storage and transport
    • Requires substantial maintenance and renovation > disinvestment
      • Decision by the owner to leave maintenance and renovation investments to a new investor
    • Demolition situation > disinvestment
      • Decision by the owner to leave the replacement newbuild to a new investor
  • Portfolio location with result of the property/properties to be sold
  • Increase in value despite difficult property / profit taking opportunity
  • Funding requirements (permanent, temporary or cyclical)
    • Consolidation
    • Rent reductions
    • Increased expenditure
  • Exit strategy
    • Occurrence of an exit condition

Further Information

  • Exit
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