A topic that has been gaining more and more attention for some time now is the asset swap. It's a simple term, but one that can solve complex problems in one shot. For many pension funds and private investors, contributing directly held properties to a Swiss real estate fund or investment foundation can be of great advantage. In the case of a sale or asset swap, not only real estate-related questions arise, but also legal and tax issues. In this article, I explain why an asset swap has great potential and brings decisive advantages in the long term.

The transaction market has weakened somewhat due to the current interest rate situation, which is manifested in slightly lower prices. The capital market is also reacting more cautiously in the current market environment, which means that various real estate market participants are currently finding it more difficult to raise fresh capital to make further investments. As a result, the transaction market is currently less competitive.

Therefore, by means of an asset swap with Helvetica, you are currently likely to receive a higher sales price than in a traditional sale on the market. At Helvetica we are prepared to pay very attractive prices for asset swaps. In addition, high brokerage costs can be avoided, which in combination is an ideal solution when it is difficult to sell a property on the market. In a difficult market, selling your property also takes longer than handling an asset swap with us.

After an asset swap, they no longer have tenant, market, redevelopment or renovation risks. In addition, the real estate fund provides secure and stable distributions and cost security. Due to its size and professional real estate management, an investment vehicle has opportunities for performance enhancement that are not available to a smaller real estate owner. This can be achieved, for example, by carrying out renovations and strategic repositioning of properties or by using more favorable debt capital. Combined with the resource and cost savings, the depositor can thus achieve a significant increase in his overall performance. Swiss real estate fund units have returned an average of between 5 and 6 percent annually over the past 30 years.

Once a real estate owner has placed his properties in an investment vehicle, he can once again concentrate more on his actual core business. His real estate investments are now more broadly diversified, and the investment risk is reduced accordingly. Directly held real estate always requires a high level of resources, be it for maintenance, leasing, ongoing property accounting, taxes, or the planning and implementation of renovation measures. With an asset swap, real estate professionals take care of all these tasks for him.

An asset swap immediately changes the investor's income profile. Individual properties expose the owner to high individual risks due to their location, use, condition and tenants. An investment vehicle that is well diversified across all risk parameters cushions these individual risks and provides the depositor with consistently attractive distributions with low volatility. An asset swap is by far the simplest and most favorable way to achieve such a significant improvement in the risk profile.

Professional real estate owners have specific know-how in the field of sustainability, comprehensive product and property strategies, and the appropriate specialized personnel. Through an asset swap, a depositor can benefit directly from these sustainability advantages without having to set up the relevant structures internally themselves, which also incur high additional costs.

Shares in listed real estate funds are characterized by their easy tradability. This means that they can be traded promptly and to any extent as needed. In the case of unlisted vehicles, liquidity depends heavily on the current market situation. An additional effect arises when an unlisted security is newly listed on the stock exchange - the shares are then not only much more liquid, but often also show a significant increase in value. This scenario is imminent for our HSL fund, a listing of this vehicle is planned for the end of 2024.

Depending on the contributor, the contribution vessel and the structure of the transaction, asset swaps can be tax neutral. In concrete terms, this means that real estate gains taxes can be deferred, and real estate transfer taxes can be completely waived. This applies to asset swaps by pension funds to investment foundations. In contrast, asset swaps to contractual real estate funds are treated in the same way as other forms of transaction for tax purposes.

In Switzerland, there is considerable performance potential for many pension funds, companies, and private investors in shifting from direct to indirect real estate investments by means of an asset swap instead of a sale.

In the case of an asset swap, we offer you flexible, fast, and well-founded solutions thanks to our many years of experience. The result will be a tailor-made proposal for you. In principle, all real estate can be suitable for an asset swap. Important parameters are the use, size, and location of the property.

Are you currently considering selling your apartment buildings?
If so, consider an asset swap to our Helvetica Swiss Living Fund, one of the largest unlisted residential funds in Switzerland, even before the planned listing. This way, you will benefit on the one hand from the excellent distribution yield as well as the additional profit potential in view of the planned listing on the SIX Swiss Exchange at the end of 2024. This is particularly attractive because asset swaps are made at net asset value and not at the trading price. This offers exciting investment advantages for both pension funds and private property owners.

The depositor can regularly see this for himself, as regulated vessels are subject to comprehensive and transparent reporting standards. Deposit vehicles are typically subject to strict FINMA or OAK regulations. This gives the depositing party the necessary assurance that the fund is managed according to the highest standards.

With no obligations and no cost implications, you will receive an offer from us that takes into account the legal and tax aspects. First, however, it is important to get to know your needs and then to work out concrete and customer-oriented proposals for solutions.