Discount
Percent discount of stock exchange rate versus the net asset value (NAV) of the security. In case of real estate funds, this is referred to as a point (mortgage).
Premium
Also known as an agio or surcharge. In case of real estate funds, this is the percent surcharge of the stock exchange rate versus the net funds assets per share. in case of real estate companies, we refer to a premium versus the net asset value (NAV).
Payout yield
Amount paid out in percent of the stock exchange rate.
Gross yield
Rental income in percent of the average market value of the properties.
Buy and manage
Swiss Estates AG refers to "buy and manage" as a strategy that is not limited to purely holding real estate, but rather a strategy that reacts to market conditions and possibly also sells properties if this makes sense commercially. In any case, Swiss Estates does not refer to real estate speculation with "buy and mange".
Discounted cash flow rating (DCF)
The basic idea behind Discounted Cash Flow evaluation is that the current market value of real estate is determined by the sum of all net income expected in the future (=net rent income, without auxiliary costs minus operating, upkeep, and repair costs), which is discounted according the current point in time. Discounting rates are adjusted to market conditions based on changes in ownership and capital market developments.
Ecart
Percent deviation of the stock exchange rate from the net asset value (NAV). If this is positive, then we refer to a premium, and if this is negative, then we refer to a discount.
Earning rate
The value of a property calculated from the rental earnings capitalisation rate. The rental interest must appear to be suitably and sustainably achievable in order to influence the calculation completely. The earning rate is weighted more than the real value for calculation of the market value of a real estate fund.
Latent taxes
Latent taxes refer to tax obligations or tax credits that are nevertheless not exactly known in terms of the amount and time they are due. For real estate companies, appreciating and depreciating value of real estate results in changes to latent taxes, since the sale of a property may result in a profit from the property and taxes for a change of hands may become due or omitted. Property taxes are different in every canton and normally lower the longer the property was owned. Most real estate companies apply a latent tax rate of around 30% and therefore make flat-rate considerations for the various rates per canton and the ownership duration of the individual properties.
Liquidity
The volume of securities traded on the exchange in pieces or CHF, for example per day or month.
Net asset value (NAV) - net funds assets - net inventory value
The assets calculated at market values less liabilities and latent taxes. The NAV corresponds with the equity capital after liquidation taxes and is comparable with the net fund assets or the net inventory value for a real estate fund. Several real estate companies also indicate the NAV prior to liquidation taxes, which is accordingly higher. However, from the point of view of investors, NAV after liquidation taxes is more important and also better for comparison with the net fund assets of the real estate.
Net income
Net rental income (gross rental income less direct property expenses) in percent of the market value of the property.
Revaluation effects
Revalution of the real estate result in changes to latent taxes. For this reason, adjustment of company profit by the revaluation and the connected appreciation or depreciation of latent taxes must also be considered.
Real value
Recalculation of the current substance value of a property, i.e. property redevelopment costs to a standard of equal value including the land value and possible depreciation due to age.
Redemption price
The price at which the real estate fund shares must be redeemed by the fund management according to the legal notice period. Corresponds with the net fund assets less a redemption commission according the regulations of the real estate fund.
Target rental income
That rental income that should be reached at a rental level of 100%.
Profit retention
Taken from (thesauros = treasure). Companies pursue a profit retention policy if they do not issue dividends but rather add surpluses to the company's assets. The appreciated value is expressed via the increased intrinsic value (net asset value = NAV) in the prices of the respective shares (stocks, participation certificates). Profit retention by SE Swiss Estates AG usually offers investors tax advantages.
Market value
The market value is the price that would normally be achieved after diligent sale of a property at the time of the appraisal.
Interest coverage ratio
The interest coverage ratio indicates how often the operative profit (usually EBITDA or EBIT) is required to cover debt interest. We define the interest coverage ratio as EBITDA prior to revaluation/net interest costs.