Investments 01 Credit Suisse Asset Management / 02 Credit Suisse Fund Hos pitality / 03 greenproperty The Quality Seal That Hits Home / 04 Background Interview on Sustainable Construction / 05 Business Center Andreaspark, Zurich / 06 Foyer Project, Zug / 07 Overview of Investments
Spreitenbach Shoppi Zurich Prime Tower Zurich Sihlcity Basel Messeturm Zurich Jelmoli - House of Brands St. Gallen Businesshouse Köniz Business Park Rorschach Trischli s La Chaux-de-Fonds Tag Heuer Headquarters Burgdorf Residenz Burdlef Berne Genfergasse 14 St. Erhard Silence Davos Stilli Park Hotel Pregny-Chambésy Chemin des Cornillons Zug Foyer Lausanne EPFL Zug Uptown Geneva Geneva Business Center Bellinzona Via dei Gaggini Geneva Confédération Centre Lucerne Lakefront Lucerne Sportarena 01 Top-Quality Asset Managers Real estate investments are crisisresistant and offer a stable direct distribution yield. The more diversified an investment is, the more attractive its yield tends to be in the medium term. Because there are obviously limits to what private clients can achieve in terms of diversification, they appreciate the option of indirect investment via real estate funds. Units in real estate funds are also an integral part of the port folios of professional clients such as pension funds. Ex perience has shown in recent years that on top of a fund s anticipated return, its specific focus plays a key part in any decision to invest. This finding forms the basis for the various investment vehicles of Credit Suisse Asset Management which had total assets under management of CHF 27. 2 billion in December 2010. This means that investors collectively are some of the most important land lords and builder-owners: 1,10 0 properties have a good 70,000 tenancies generating a total net annual rental income of CHF 1.44 billion (2010). The annual invest ment of all real estate funds in renovation and reconstruction amounts to CHF 250 million; the 48 new construction projects currently under way account for total building costs of Photos: Credit Suisse
02 Premiere Fund With Host Qualities The Credit Suisse Asset Management family of real estate investment vehicles has become even more attractive: the Credit Suisse Fund Hospitality saw huge demand from investors at the end of 2010. Portfolio Properties Projects Value of property investments in the individual business regions (in CHF million): Berne 1 883, Lake Geneva 3 719, Central Switzerland 1 473, Northwest Switzerland 5 050, Eastern Switzerland 1 371, Southern Switzerland 494, Western Switzerland 521, Zurich 8 064 around CHF 2.3 billion. For the 110 employees of Credit Suisse Real Estate Asset Management headed by Markus Graf, these high figures impose an obligation to invest prudently and on a sustainable basis. Andreas Schiendorfer More information at www.credit-suisse.com/ch/ realestate Great importance has always been attached to hospitality in Switzerland. It could even be seen as part of our national identity. The hospitality business originally emerged from the hotel sector, but now covers a much broader range of offerings: from campus properties, health care sector real estate, and various forms of hotels to third-age housing and alpine residences, explains Lucas Meier, Fund Manager for Credit Suisse Fund Hospitality (CS REF Hospitality). With the new fund, we are now investing in hospitality properties on a broadly diversified basis and can apply our know-how in a targeted way. According to Meier, a hospitality property is deemed successful if it equally and sustainably meets the requirements of investors, users/guests and operators alike. A property s operator is crucial to its commercial success. Switzerland s first real estate fund with host qualities therefore works exclusively with nationally and internationally recognized brands and top-notch operating companies. Conflicts of interest cannot arise, as investing in operating companies is ruled out by law, stresses Lucas Meier. Real estate investments are diversified in terms of location and type of use. Existing properties can be purchased and if necessary renovated, but new-build projects can also be undertaken. Originally, the assumption was that the size of the fund would be around CHF 500 million. But we soon saw that there was significantly greater demand, explains the fund manager. We finally set the issuing volume at CHF 900 million. The first investments relate to the attractive new construction projects of Stilli Park Hotel in Davos and a conference center and Stilli Park Hotel, Davos residential building on the campus of the Swiss Federal Institute of Technology of Lausanne (EPFL) in Ecublens. The fund is particularly attractive for investors with a medium- to long-term invest ment horizon who are mainly looking for a steady return. So far, investment has been restricted exclusively to qualified investors, but within the next five years we plan to open CS REF Hospitality to the general public and list it on the Swiss stock exchange. schi kooaba EPFL, Lausanne Would you like to read detailed articles on Stilli Park Hotel and the conference center / residence on the campus of the EPFL near Lausanne? Kooaba can deliver them to you! Photograph this page with the free Kooaba app and you ll be given access to a browser with the additional information. The infor mation can also be found at www.credit-suisse.com/bulletin. Asset Management Credit Suisse
03 greenproperty The Quality Seal That Hits Home Launched in the spring of 2009, Credit Suisse Fund Green Property is on track for success: seven promising projects are under way, and one of them Business Center Andreaspark in Zurich is already open. The greenproperty quality seal developed in the context of this real estate fund is thus proving itself very well in practice. Evaluation of model real estate project Life Cycle Materials In the context of sustainable construction, recommendations such as the Minergie Standard or the Building Energy Passport are widely recognized. However, the greenproperty quality seal should gradually loom larger in the public mind now that the first greenproperty project Business Center Andreaspark (BCA) in Zurich Leutschenbach has been completed and rented out to tenants as of mid-2010. But what exactly is behind this quality seal? Our declared aim was to introduce Switzerland s first comprehensive seal of approval for sustainable real estate and provide a means of formulating overall Utilization Energy Infrastructure Each of the five greenproperty dimensions is based on between five and nine criteria. The red evaluation line indicates not only whether the criteria have been met, but also what area still has the most potential for improvement. assessments and ratings for real estate, explains Markus Graf, head of Asset Management Switzerland. To this end, we joined forces with the engineering and design practice Amstein + Walthert and set about analyzing existing sustainability labels and developing our own assessment procedure. A greenproperty assessment involves examining no less than 86 indicators, which are evaluated on the basis of benchmarks and applicable standards. These indicators are combined into 35 criteria, which are in turn assigned to five sustainability dimensions: utilization, infrastructure, energy, materials, and life time cycle (see left above). The greenproperty quality seal confirms that a property meets the consolidated assessment of the strict requirements of the quality seal in all five dimensions (see box below). This system has proven itself very well in practice. The main point to emerge is that a building designed from the outset to comply with the greenproperty requirements need not be any more expensive than a conventional project, says Jean-Claude Maissen, Fund Manager for Credit Suisse Fund Green Property (CS REF Green Property). We ve received inquiries from all over the world from people wanting to know both how the criteria are defined and what our experience has been, and also how to set up a fund like this. CS REF Green Property has already invested in the following projects: Uptown (Zug), Business Center Andreaspark BCA (Zurich), Lindenhof and Westhöfe (Dietikon), Foyer (Zug), Trischli s (Rorschach), and plots A2 and B of the amrietpark site in Schlieren. Markus Graf emphasizes that Credit Suisse Asset Management has invested in sustainable projects only since 2010. We are proud to be playing a pioneering role in the field of sustainable construction in Switzerland, he tells us. schi Selected Criteria for the Five Dimensions Utilization Infrastructure Energy Materials Life Cycle Social contacts Public transportation/ non-motorized traffic Protection against heat in summer Availability of raw materials Daylight Basic supplies Heat for hot water Pollutants Renovation Building structure/fittings Spatial identity Personal mobility Electricity Environmental impact Operation/maintenance Accessibility Location Coverage of energy requirements Dismantling Security and safety Indoor climate Structural elements Appraisal Chart: Credit Suisse Asset Management Credit Suisse
Roger Baumann (left), head of Business Development at Credit Suisse Asset Management, and Jean-Claude Maissen, Fund Manager for Credit Suisse Fund Green Property, tell us about sustainable construction and the greenproperty quality seal. 04 Credit Suisse Redefines Sustainable Credit Suisse Fund Green Property is the only fund to invest exclusively in sustainable construction projects. With this fund, Credit Suisse is backing its own sustainable values. Its greenproperty quality seal is helping to lead a paradigm shift. Photo: Katharina Lütscher bulletin: How large is Credit Suisse Fund Green Property (CS REF Green Property)? Jean-Claude Maissen: Since its launch in April 2009, we have acquired seven construction projects with a total value of CHF 425 million. One-third are residential projects, while the rest are commercial properties. One project was already completed in mid-2010 and the building is now occupied; three more projects will be completed in 2011. The environmental issue is important to you. But even CS REF Green Property is building on valuable reserves of land. Maissen: Most of our construction projects are on brownfield sites. The Limmatfeld site in Dietikon, for example, is a redevelopment of existing industrial wasteland into a mixed-use area, as is the amrietpark development in Schlieren. Inward consolidation was also the aim with the Foyer development plan on the former Landis + Gyr site in Zug. Sustainable construction need not entail the destruction of greenfield land. On the contrary, it usually involves consolidation within an urban environment. We add use to existing infrastructure and increase its effectiveness. Roger Baumann: greenproperty projects connected to existing infrastructure score more highly in our sustainability assessment than greenfield projects. Location and infrastructure are key criteria in a holistic assessment of sustainability. By taking these factors into account, we aim to counter urban sprawl and reduce energy consumed in the process of commuting between home and work ( induced mobility ). Let s touch on the quality seal buzzword: why does Switzerland need a sustainability label? Baumann: The University of Zurich s Center for Corporate Responsibility and Sustainability (CCRS) took up this issue on behalf of Minergie. There is a consensus that the real estate industry needs an indicator for decision-making amid this plethora of labels. > Asset Management Credit Suisse
05 06 Zurich The Largest Project Our main reasons for moving into the Andreaspark were the high environmental standards and the central location, explains Christine Gebhard, head of corporate communication at Aduno Group, a company involved in payment processing. Aduno Group, along with Karl Steiner AG, is the main tenant of the Business Center Andreaspark (BCA) in Leutschenbach. It was a milestone in our corporate history, says Christine Gebhard. The design and architecture of the BCA are the shape of things to come. And of course the fact that the striking glass facade with aluminum louvers does not come at the expense of sustainability. The first property to be completed with the greenproperty certificate is ideally suited to the new dynamism of Zurich North. More at www.credit-suisse.com/bulletin Zug Two Funds in Unison On the one hand, for Johnson & Johnson this newbuild office project is the biggest of its kind within the group, while on the other hand it s also a pilot project in many areas such as flexible workplaces or sustainable construction, says Heinz Schmid, general manager of Cilag GmbH International. The pharmaceutical company very nearly became a victim of its own success: Having moved into the Siemens site near the railway station with 110 staff in 1999, the company now employs a workforce of 600 at six locations in Zug. However, by 2012 two new buildings, constructed by CS REF Green Property and CS REF PropertyPlus, will remedy the situation and even provide room for two more Johnson & Johnson subsidiaries. More at www.credit-suisse.com/bulletin A sustainability label needs to be based on standards that apply locally. greenproperty is a quality feature when taking rental or investment decisions. However, it is understandable that international companies wishing to rent green sites in Switzerland will wish to use their country-specific standards such as LEED, BREEAM or DGNB as rental criteria. This means that in the future we will increasingly be seeing multiple certifications in the market. This certainly makes sense. How objective is greenproperty? Maissen: The point of this quality seal is to enable us to measure the sustainability of a property on an objective basis. This means we can place our investment decisions on a sound footing and assess where there is still room for improvement in a construction project or a property. The degree of objectivity is high, as the quality seal has been developed in close cooperation with recognized specialists. What exactly lies behind this label? Can you adapt the 35 criteria to your needs? Baumann: The indicators and their assessment are fixed. The assessment system is periodically reviewed and, where necessary, brought into line with new standards. For example, Minergie and Minergie-Eco are central components of our quality seal. If these labels continue to develop and adapt to the new legal requirements, greenproperty will also become stricter. Maissen: We have developed the quality seal in conjunction with recognized specialists and, in doing so, have paved the way for a sustainable real estate market. In my view, with our comprehensive catalog of criteria we have gained a competitive edge for the next three to five years. On what grounds could a property be downgraded or lose its quality seal? Baumann: During the management phase of a property, certain indicators are indeed no longer amenable to influence or can only be influenced to a limited extent. One example here is the prescribed percentage of recycled Photos: Credit Suisse Asset Management Credit Suisse
concrete. However, the planning and project data for energy consumption certainly can change during the utilization phase. If consumption is higher than expected because of unforeseeable user behavior or technical deficiencies, the property may be downgraded unless countermeasures are taken to cut consumption. Annual certification gives us an incentive to continuously optimize our buildings. Maissen: Changes can go both ways there is always a chance that a property s rating can be upgraded after a while. For example, a property is enhanced by infrastructure improvements. This could be an improvement in public transportation links or more shopping opportunities close by. Critical reappraisal also aims to provide an incentive for more sustainable mana gement. So infrastructure is an important component of the quality seal. Does this mean that people living in rural locations cannot qualify for greenproperty approval? Maissen: Adopting a comprehensive view of sustainability means taking account of all aspects: infrastructure, life cycle, materials, utilization and energy. In the future, we will be grading our quality seal into gold, silver and bronze ratings. This way, a sustainable property with connections to public transportation could be awarded a silver or bronze certificate even if it is in a rural location. However, in consultation with specialists in this field we have come to the conclusion that a property cannot in our view be rated as sustainable if it is a quarter of an hour s drive away from shops, schools, the occupant s workplace or the like if it is, even the most energy-efficient construction methods won t make any difference. Will you be extending greenproperty to other areas? Baumann: That is one of the questions we will be focusing on this year. The project is called Green Hospitality. So far we ve been using the quality seal for residential, office and retail properties. The question now is how to assess the sustainability of operator properties. In the hotel sector, there are around 340 labels worldwide. But here the focus is not on the structural elements of At the Limmatfeld site in Dietikon, CS REF Green Property and CS REF LivingPlus are implementing the Westhöfe and Lindenhof projects. Both are certified with the greenproperty quality seal. Additional information is available at www.credit-suisse.com/bulletin. the building and its use, but mainly on the operational management of the business. This covers locally sourced food, energy-saving appliances, recycling and laundry services. With a comprehensive quality seal focusing on hotel buildings (say, on the use of air-conditioning systems in the rooms), sustainable corporate management would become more significant. Maissen: Projects along these lines are already under way with our management company Wincasa. Plans include a manual on real estate management. We envisage extensive instructions for the action to be taken. These could well go as far as specifying what cleaning product the janitor should use. The whole issue of sustainability forms an integral part of our contracts: our tenants are also required to comply with specifications in this area, for example when equipping the premises with their own fixtures and fittings. Why can t small-scale investors invest in the CS REF Green Property? Maissen: CS REF Green Property is not a run-of-the-mill product. The financial market supervisory authority (FINMA) has authorized significant exemptions, such as a 100% allocation to construction projects. To protect smallscale investors, FINMA has imposed a condition restricting the investor base to qualified investors. This applies for the first five years, i. e. for the establishment phase of the fund. Within the next three years, we will be listing the fund on the stock exchange, thereby granting access to all investors. The exemption authorizations will also be lifted at that point. There are already numerous projects in the pipeline for the current year Baumann: 2011 is the year of further development and communication. In addition to the Green Hospitality project, there are plans to extend the quality seal to the other investment vehicles of Credit Suisse Asset Management. Moreover, we will be awarding definitive certification to the first property (after completion). And we are also working on a solution for the assessment of portfolio properties that have undergone renovation. We ve achieved a lot since 2009 and now it s time to deliver some concrete results. Franziska Vonaesch kooaba Here you can find articles on the various construction projects of CS REF Green Property and more detailed information on greenproperty. Asset Management Credit Suisse
07 Credit Suisse Asset Management The Investment Vehicles of Asset Management (including third-party vehicles) Credit Suisse REF Siat Credit Suisse REF Interswiss Credit Suisse REF PropertyPlus Credit Suisse REF LivingPlus Focus Residential property Commercial property Commercial property Serviced accommodation Switzerland x x x x International Investors All exchange-listed All exchange-listed All exchange-listed All exchange-listed Credit Suisse REF Green Property Credit Suisse REF Hospitality Credit Suisse REF International Credit Suisse 1a Immo PK Focus Sustainable real estate Hospitality real estate Commercial property Balanced Switzerland x x x International x Investors Qualified investors* Qualified investors* Institutional investors Pension funds, social insurance funds / compensation funds CSA Switzerland CSA RES Commercial CSA RES Dynamic Swiss Prime Site Focus Balanced Commercial property Residential property Commercial property Switzerland x x x x International Investors Tax-exempt second-pillar pension funds * in accordance with Article 10(3) CISA in conjunction with Article 6(1) CISO Tax-exempt second-pillar pension funds Tax-exempt second-pillar pension funds All exchange-listed Additional information is available at www.credit-suisse.com/ch/realestate Credit Suisse AG, Asset Management, Sihlcity Kalandergasse 4, CH-8070 Zurich, phone +41 (0)44 334 43 48, fax +41 (0)44 332 10 82 E-mail: info.realestate@credit-suisse.com This publication is for information purposes only. It does not constitute an offer and is not a recommendation by Credit Suisse to buy or sell securities. Indications of past performance are no guarantee of a positive performance in the future. The analysis and conclusions contained in this publication were established by Credit Suisse and may already have been used for transactions by Credit Suisse Group companies prior to being made known to clients of Credit Suisse. The opinions expressed in this document are those of Credit Suisse at the time of going to press. (We reserve the right to make amendments.) Credit Suisse is a Swiss bank. Photos: Credit Suisse