HSC Fund – 14% net income growth in the first half of 2021

• Real estate portfolio as of June 30, 2021 at CHF 745.3 million
• Target rental income (annualized) of CHF 45.7 million, +9% compared to June 30, 2020
• Rental income of CHF 20.7 million, +14% compared to first half of 2020
• Net income of CHF 14.4 million, +14% compared to first half of 2020
• Occupancy rate remains high at 94.8% as of June 30, 2021
• Net asset value per share at CHF 112.99 as of June 30, 2021

Details on the first half year 2021

Income statement
Rental and ground rent for development rights income of the HSC Fund increased by approximately 14% to CHF 20.7 million in the first half of 2021 (H1 2020: CHF 18.2 million). The increase compared to the same period of the previous year is mainly due to acquisitions of attractive properties during the previous year 2020. No further properties were acquired in the first half of 2021. The market value of the existing portfolio as of June 30, 2021 was CHF 745.3 million (December 31, 2020: CHF 743.9 million; June 30, 2020: CHF 678.4 million). This corresponds to an increase of CHF 1.4 million, which is due to capitalized fixed asset costs and investments in the amount of CHF 2.0 million and devaluations of CHF 0.6 million. Thanks to targeted leasing activities, the occupancy rate was improved and, at 94.8% as of June 30, 2021, is once again at a very high level (31.12.2020: 94.6%; 30.06.2020: 94.4%).

Net income increased by 14% year-on-year to CHF 14.4 million (H1 2020: CHF 12.6 million). In the first half of 2021, gains of CHF 0.4 million (H1 2020: TCHF 10) were realized on sales of securities, while unrealized capital gains include portfolio devaluations of CHF 0.6 million and unrealized securities gains of CHF 0.2 million (H1 2020: unrealized capital gains due to portfolio revaluations of CHF 2.8 million). Total comprehensive income in H1 2021 amounted to CHF 12.7 million (H1 2020: CHF 13.3 million).

Balance sheet
Total fund assets as of June 30, 2021 were at CHF 763.4 million (12/31/2020: CHF 770.1 million; 06/30/2020: CHF 703.4 million), with the properties reflecting a value of CHF 745.3 million as mentioned above. After deduction of liabilities of CHF 256.0 million (31.12.2020: CHF 255.0 million) and estimated liquidation taxes of CHF 16.7 million (31.12.2020: CHF 15.0 million), the net fund assets amounted to CHF 490.7 million (31.12.2020: CHF 500.2 million). The change in net assets is due to the distribution of CHF 5.10 per fund share for a total amount of CHF 22.1 million, which was paid out on April 29, 2021 (4.7% distribution yield for 2020), and the total income of CHF 12.7 million for the first half of 2021. The net asset value per fund share reached CHF 112.99 as of June 30, 2021, which, adjusted for the distribution of profits, represents an increase of 2.7% compared to year-end 2020.

The COVID-19 pandemic continues to have only minor impact on fund
The fund's properties continued to prove resilient in the first half of 2021 during the ongoing COVID-19 pandemic. The HSC Fund has virtually no exposure to the hospitality and tourism sectors and in the period under review, as in the previous year, approximately one-third of target rental income was directly affected by COVID-19 measures. In the first half of 2021, the income statement was charged with CHF 0.6 million as a reduction in rental income. This corresponds to approximately 1.3% of the annualized target rental income of the fund. There were no tenant bankruptcies or legal disputes in connection with COVID-19.

Outlook
The fund management company is optimistic about the second half of 2021 and the year 2022. A key focus of activities remains the value creation in asset management in order to further increase the occupancy rate and to continuously enhance the attractiveness of the portfolio through cost-conscious investments. When attractive purchase opportunities arise, the portfolio will be selectively expanded with high-quality properties. Usages such as office and commercial, as well as mixed-use commercial properties are in the foreground. Furthermore, no capital increase is planned in the reporting year 2021.

The semi-annual report 2021 of the HSC Fund is available on the fund management company's website and on Swiss Fund Data.

All press releases can be found under www.helvetica.com.