CREDIT SUISSE GROUP AG 29.06.2022
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The SwissTech Convention Center (STCC) has been used and operated by the Ecole Polytechnique Fédérale de Lausanne (EPFL) at its Ecublens campus since 2014. Credit Suisse Funds AG and the Board of the Swiss Federal Institute of Technology (ETH Board) have agreed to transfer ownership of the SwissTech Convention Center as part of an early reversion to the Swiss Confederation. Both sides view the agreement as beneficial. The transfer requires the approval of the Federal Council and the Federal Assembly.
Credit Suisse Funds AG built the SwissTech Convention Center (STCC), along with the neighboring Centre de Logement, in Ecublens in 2010 on behalf of the Credit Suisse Real Estate Fund LivingPlus and the Credit Suisse Real Estate Fund Hospitality, which each hold a 50% stake in the properties. The EPFL is the sole tenant and its lease for both buildings originally ran until 2044. The STCC proved to be a key strategic element for effective instruction and research at the EPFL. Since it has not been possible to run the convention center profitably so far - a situation further exacerbated by the pandemic - the parties have been in talks for some time about the early reversion of the property.
Transfer of ownership between 2024 and 2026
The agreement now reached will split the existing ground-lease property into two plots, one for the STCC and one for the Centre de Logement. This allows the possibility of reverting the plot on which the STCC is located to the Confederation ahead of time. The transaction amount is CHF 139.5 million, which is based on the market value as of the end of 2021. Subject to the approval of the Federal Council and the Federal Assembly, the transfer of ownership of the convention center is planned from 2024 until 2026 at the latest. This window will allow the two real estate funds to make suitable replacement investments. The STCC makes up 2.3% of the total assets of the Credit Suisse Real Estate Fund LivingPlus and 9.0% of the total assets of the Credit Suisse Real Estate Fund Hospitality (as of December 31, 2021).
The two Credit Suisse Funds AG funds will continue to own the ground-lease property on which the Centre de Logement is located - which includes student housing, shops, a hotel, and a parking garage. The lease agreement with the EPFL was extended for a further ten years as part of the new arrangement, and will now run until 2054.
Approval from the Federal Council and the Federal Parliament
The reversion of the STCC plot to the Confederation needs the approval of the Federal Council, which must also submit it for approval to the Federal Assembly.
Filippo Rima, CEO of Credit Suisse Asset Management (Switzerland) Ltd., notes: "We welcome this solution, which allows the participating real estate funds to receive attractive compensation for the SwissTech Convention Center and, in addition, extends the lease term for the Centre de Logement by a further ten years. We intend to invest the proceeds from the STCC into other properties. We will carefully select these by drawing on our strong roots and considerable experience in the Swiss real estate sector so that we can continue to provide investors with opportunities to invest in residential and commercial properties."
EPFL Vice President for Operations, Matthias Gäumann, adds: "This solution has many benefits. It will significantly reduce the operating costs for the convention center, which is currently running at a loss. This improves EPFL's framework to fully exploit the potential of this strategic infrastructure, whether for scientific conferences or for other academic purposes."
Credit Suisse Asset Management (Switzerland) Ltd.
Credit Suisse Asset Management (Switzerland) Ltd. forms part of the Asset Management division of Credit Suisse Group and manages the investment vehicles of Credit Suisse Funds AG. The Asset Management division manages assets of over CHF 462 billion worldwide (as of March 31, 2022). Based on the global market presence of Credit Suisse Group, Asset Management offers active and passive solutions for traditional and alternative investments as well as dedicated product expertise in Switzerland, EMEA, APAC, and the Americas. Sustainability is a high priority. We offer a wide selection of active and passive investment funds that are aligned with the Credit Suisse Sustainable Investment Framework or replicate a sustainable index. With that in mind, we have different approaches where environmental, social, and governance criteria (ESG criteria) are used at various points in the investment process.
Disclaimer
This document was produced by and the opinions expressed are those of Credit Suisse as of the date of writing and are subject to change. It has been prepared solely for information purposes and for the use of the recipient. It does not constitute an offer or an invitation by or on behalf of Credit Suisse to any person to buy or sell any security. Any reference to past performance is not necessarily a guide to the future. The information and analysis contained in this publication have been compiled or arrived at from sources believed to be reliable but Credit Suisse does not make any representation as to their accuracy or completeness and does not accept liability for any loss arising from the use hereof.
If nothing is indicated to the contrary, all figures are unaudited. The information provided herein is for the exclusive use of the recipient. Neither this information nor any copy thereof may be sent, taken into or distributed in the United States or to any U. S. person (within the meaning of Regulation S under the US Securities Act of 1933, as amended).
The tax treatment depends on the individual circumstances of each client and may vary over time. Credit Suisse does not provide tax advice, and tax implications have not been taken into consideration when calculating the returns.
Credit Suisse Real Estate Fund Hospitality and Credit Suisse Real Estate Fund LivingPlus: These are investment funds established under Swiss law in the category of "real estate funds," in accordance with the Swiss Federal Act of June 23, 2006, on Collective Investment Schemes (CISA). The fund management company is Credit Suisse Funds AG, Zurich. Credit Suisse (Switzerland) Ltd., Zurich, is the custodian bank. Subscriptions are only valid on the basis of the current sales prospectus with integrated fund contract, simplified prospectus, and most recent annual report (or semi-annual report if more recent). The sales prospectus with integrated fund contract, the simplified prospectus, and the annual and semiannual reports may be obtained free of charge from the fund management company or from any branch of Credit Suisse (Switzerland) Ltd. in Switzerland.
The key risks of real estate investments include limited liquidity in the real estate market, changing mortgage interest rates, subjective valuation of real estate, inherent risks with respect to the construction of buildings, and environmental risks (e.g. land contamination).
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Credit Suisse Group AG published this content on 29 June 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 June 2022 05:26:03 UTC.
