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Edmond de Rothschild Real Estate SICAV
March 2012www.edr-realestatesicav.ch
History
» November 2010: Authorization given by FINMA to Edmond de Rothschild Real Estate SICAV (ERRES)
» December 2010: SICAV structure set up
» March 2011: Launch of the 1st sub-fund, ERRES-Swiss,
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» March 2011: Launch of the 1st sub-fund, ERRES-Swiss, with CHF 300m in AUM
» February 2012: Authorization given by FINMA for a new sub-fund
» March 2012: Capital increase for the existing ERRES-Swiss sub-fund
» April 2012: Launch of the 2nd sub-fund: ERRES-Helvetia
2BANQUE PRIVEE EDMOND DE ROTHSCHILD S.A. INVESTMENT FUND DEPARTMENT
OrganisationO ga sat o
Structure (1)
Edmond
Banque Privée Edmond de Rothschild
Investment Manager
CACEIS (Switzerland)
Management Company
l
Edmond de Rothschild
Real Estate SICAV
Board of DirectorsKPMGAuditor
Banque Cantonale Vaudoise
Custodian Bank
4BANQUE PRIVEE EDMOND DE ROTHSCHILD S.A. INVESTMENT FUND DEPARTMENT
Structure (2)
Edmond de RothschildReal Estate SICAV
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Entrepreneur sub-fund
Swisssub-fund
Helvetia sub-fund
5BANQUE PRIVEE EDMOND DE ROTHSCHILD S.A. INVESTMENT FUND DEPARTMENT
Swiss sub-fundSw ss sub u d
Market price since launch
110
115
120
125
l
Source: SIX, BPER, Credit Suisse
95
100
105
03.11 04.11 05.11 06.11 07.11 08.11 09.11 10.11 11.11 12.11 01.12 02.12
EdR Real Estate SICAV Swiss SXI Real Estate Funds Price Index
» ERRES – Swiss premium (08.03.2012): 14.8%
» Index average premium (31.01.2012): 21.9%
» Index weighted average premium (31.01.2012): 25.2%
7BANQUE PRIVEE EDMOND DE ROTHSCHILD S.A. INVESTMENT FUND DEPARTMENT
Trading volume
12.8%
3.9%
7.8%
4.1%
6%
8%
10%
12%
14%
n %
du
nb
de
par
ts
l
3.9%
1.9%
3.3%2.6% 2.5%
1.7%2.2%
2.8% 2.6%
4.1%
0%
2%
4%
mar
s.11
avr.1
1m
ai.11
juin.
11
juil.1
1ao
ût.11
sept
.11
oct.1
1
nov.1
1dé
c.11
janv.
12
févr
.12
en
Data as at 29.02.2012 for ERRES – Swiss and 31.01.2012 for the Sxi Real Estate IndexSource: BPER, Credit Suisse, SIX
» ERRES – Swiss Monthly average volume (12 months): 4.1%
» Index average monthly volume: 1.5%
8BANQUE PRIVEE EDMOND DE ROTHSCHILD S.A. INVESTMENT FUND DEPARTMENT
Summary of tax advantages
» Fiscal value at 31.12.2011: CHF 13.91/share
» Real estate returns and assets are tax exempt for shareholders if these are held directly by the SICAV.
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if these are held directly by the SICAV.
» Only returns from cash or investment vehicles will be subject to taxation for the shareholders.
This information is provided for informational purposes only. We recommend that the existing or potential investors consult their fiscal advisors for any implication related to any investment in the SICAV sub-funds.
9BANQUE PRIVEE EDMOND DE ROTHSCHILD S.A. INVESTMENT FUND DEPARTMENT
Current situation (at 29.02.2012)
» Net asset value: CHF 300m
» Gross real estate asset value: CHF 370m
» Target leverage: 30% (max. 50%)
» Number of properties: 22
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» Number of properties: 22
» Total rental surface: 97,682 m2 (including building projects)
» Reversionary rental income: CHF 22m
» Share price: (08.03.2012): CHF 118 per share
10BANQUE PRIVEE EDMOND DE ROTHSCHILD S.A. INVESTMENT FUND DEPARTMENT
Allocations
Répartition géographique (en% des loyers bruts)
Genève26%
Fribourg20%
Neuchatel3%
Valais1%
Répartition sectorielle (en% des loyers bruts)
Parkings3%Autres
4%Industriel
9%
Dépôts/archives3%
Résidentiel18%
Répartition géographique (en % des loyers bruts) Répartition sectorielle (en % des loyers bruts)
Neuchâtel 3%
Valais1%
Genève26%Fribourg
20%
Résidentiel18%Industriel
9%
Dépôts/archives3%
Autres4%
Parkings3%
l 11BANQUE PRIVEE EDMOND DE ROTHSCHILD S.A. INVESTMENT FUND DEPARTMENT
Vaud25%
Zürich15%
Bâle7%
Soleure3%
Commerces9%
Bureaux54%
Vaud25%
Zürich15%
Bâle7%
Soleure3%
Bureaux54%
Commerces9%
Swiss real estate market situation (1)
» Stable market dominated by local and institutional investors
» Strong demand for high-quality real estate assets due to lack of performance from other asset classes and market environment
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from other asset classes and market environment
» Most investors concentrate on the residential sector for which there is strong demand due to a continuous flow of immigrants and very low vacancy rates. Residential properties will continue to be an important asset class with a lot of market demand
Source: CBRE
12BANQUE PRIVEE EDMOND DE ROTHSCHILD S.A. INVESTMENT FUND DEPARTMENT
Swiss real estate market situation (Geneva)
OFFICE REAL ESTATE MARKET
Rents in CHF/m2 /year STABLE
Capitalisation rates 4.25% - 5.25%
Stock Available Restricted
Office stock in the
RESIDENTIAL REAL ESTATE MARKET
Rents in CHF/m2 /year HIGH
Capitalisation rates 4.00% - 5.00%
Stock Available Very low
Number of assets (in 221
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Source: CBRE
13BANQUE PRIVEE EDMOND DE ROTHSCHILD S.A. INVESTMENT FUND DEPARTMENT
Office stock in the canton per m²
4.64 millions
Vacancy Rate LOw
Demand
Outlook
Lowering demand and increase of stock
Key criteria:
» Quality of the tenants
» Situation
Number of assets (in thousands)
221
Vacancy rate Very low
Demand
Outlook
Economic context should put pressure on the highest rents
Key criteria:
» Level of rents
» Quality of the buildings
Swiss real estate market situation (Zurich)
OFFICE REAL ESTATE MARKET
Rents in CHF/m2 /year STABLE
Capitalisation rates 3.5% - 5.25%
Stock Available Restricted
Office stock in the
RESIDENTIAL REAL ESTATE MARKET
Rents in CHF/m2 /year HIGH
Capitalisation rates 4.00% - 5.00%
Stock Available Low
Number of assets (in 697
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Source: CBRE
14BANQUE PRIVEE EDMOND DE ROTHSCHILD S.A. INVESTMENT FUND DEPARTMENT
Office stock in the canton per m²
6 million
Vacancy Rate Low
Demand
Outlook
The number fo available surfaces should increase in the forthcoming months; a large number of tenants start to move out from cdb to the new developing areas in the north and west of zurich.
Number of assets (in thousands)
697
Vacancy rate Low
Demand
Outlook
The building activity in the zurich canton has always been important. 9’000 flats are supposed to be built in 2012
Stable commercial strategy - EPALINGES (VD) – Biopole III
Offices and laboratories
» Value: 32 Mn CHF
» Allocation: 9%
» Rental surface: 4’894 m2
» Net yield: 4.9 %
» No vacancy
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» No vacancy
Comments
» 20 year lease indexed to CPI
» Minergie Label®
» Direct access to the subway
15BANQUE PRIVEE EDMOND DE ROTHSCHILD S.A. INVESTMENT FUND DEPARTMENT
Stable residential strategyDietikon (ZH) – Kreuzstrasse/Überlandstrasse/Gjuchstrasse
Residential: 70 flats + 33 parking places
» Value: 22 Mn CHF
» Allocation: 6%
» Rental surface: 4’208 m2
» Net yield: 4.3 %
» No vacancy
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» No vacancy
Comments
» General good condition
» Close to public transports
» Dietikon Railway station at 5 mn
16BANQUE PRIVEE EDMOND DE ROTHSCHILD S.A. INVESTMENT FUND DEPARTMENT
“Added value” Strategy - FRIBOURG (FR) - Agora
Offices / Residential / Shops
» Value: 68 M. CHF *
» Allocation: 17%
» Rental surface: 15’071 m2
» Gross yield: 5.6%*
» Net yield: 5.1%*
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» Net yield: 5.1%*
Comments:
» Direct access to SBB Railway station
» Minergie Label®
» Last commercial leases being negotiated
» Marketing of 15 duplexes: March 2012
17BANQUE PRIVEE EDMOND DE ROTHSCHILD S.A. INVESTMENT FUND DEPARTMENT
* Projection end of construction / fit outs
How the capital increase will be used
» Acquisition of reserved assets:
CHF 45m
» Renovations and transformation of the existing portfolio:
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of the existing portfolio:
CHF 18m
» Assets under exclusive negotiations:
CHF 40m
18BANQUE PRIVEE EDMOND DE ROTHSCHILD S.A. INVESTMENT FUND DEPARTMENT
Capital increase
» 1,000,000 new shares: three existing shares entitle holder to one new one
» Listing of preferential rights: From 12 March to 22 March 2012
» Trading in new shares: 2 April
» Issue price: CHF104.34 / part
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» Issue price: CHF104.34 / part (Projected NAV at 31.03.12 + 1.5% Issue commission)
» Subscription period: From 12 March to 23 March 2012
» Situation after the capital increase:
- Net Asset Value: Circa CHF 405m
- Gross real estate value: Target CHF 600m
19BANQUE PRIVEE EDMOND DE ROTHSCHILD S.A. INVESTMENT FUND DEPARTMENT
Capital increase
» During their first day of listing, subscription rights are detached from the shares and made available to the shareholders, who can then decide to exercise them or trade them on the stock exchange
- Listing codes of the rights : 14879066 (Code ISIN CH0148790667)
» Example de preferential rights calculation
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» Example de preferential rights calculation
» Share price: CHF 118
» Issue price: CHF 104.34
» Theoretical price of the rights: (118-104.34)/(3 existing shares + 1 new one)= CHF 3.42
» For new investors: 3 rights at 3.42 + issue price at 104.34 = CHF 114.6
20BANQUE PRIVEE EDMOND DE ROTHSCHILD S.A. INVESTMENT FUND DEPARTMENT
Helvetia sub-funde vet a sub u d
Why a new sub-fund?
» ERRES is an umbrella SICAV
» New strategy based on portfolio acquisition
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» Guarantees coherence between the different sub-funds
» Protects current investors by preventing a large dilution
» Diversifies the shareholder base
22BANQUE PRIVEE EDMOND DE ROTHSCHILD S.A. INVESTMENT FUND DEPARTMENT
Portfolio construction
» Portfolio acquisition
» Restructuring of corporate portfolios leadingto added value opportunities
Target
70%
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» Multi-product developments(max. 30% of the assets)
» Majority stakes in investment vehicles
20%
10%
23BANQUE PRIVEE EDMOND DE ROTHSCHILD S.A. INVESTMENT FUND DEPARTMENT
Preliminary calendar
» Subscription period from 16 April to 25 April 2012
» Trading in new shares 2nd of May
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» Trading in new shares 2nd of May
» Listing scheduled for launch 8th of May
24BANQUE PRIVEE EDMOND DE ROTHSCHILD S.A. INVESTMENT FUND DEPARTMENT
Disclaimer
Edmond de Rothschild Real Estate SICAV (the "SICAV"), Geneva is an externally managed société d’investissement à capital variable incorporated in Switzerland in the"real estate" category, as defined in the Swiss Collective Investment Schemes Act (CISA). The SICAV has delegated administration, management and distribution to itsFund Management Company, CACEIS (Switzerland) SA, Nyon, which has in turn delegated the SICAV's investment management and the exclusive distribution of its sharesto Banque Privée Edmond de Rothschild SA, Geneva, which also has sub-distribution authority. Banque Cantonale Vaudoise, Lausanne is the SICAV's custodian.Subscriptions shall be valid only of the basis of the current prospectus including the investment regulations and articles of association, together with the simplifiedprospectus and the latest annual report (or semi-annual report if it is more recent). These documents may be obtained free of charge from the headquarters of the SICAV,Banque Privée Edmond de Rothschild SA, rue de Hesse 18, 1204 Geneva, from CACEIS (Switzerland) SA, chemin de Précossy 7-9, 1260 Nyon and from any sub-distributors.
This document is provided for informational purposes only and does not constitute investment advice or a recommendation to make or liquidate an investment or to effectany other type of transaction in relation to the SICAV. Nor does it constitute a public tender or an offer or solicitation to subscribe shares in the SICAV. The SICAV, CACEIS(Switzerland) SA and Banque Privée Edmond de Rothschild SA do not warrant the accuracy or exhaustiveness of this document, and disclaim all liability for losses thatcould arise from using the information herein. This document reflects the opinions of the SICAV. Investors are advised to examine the content hereof with a financial adviserto ascertain whether an investment in the SICAV is appropriate in view of each investor's circumstances, taking account of his investment objectives, risk profile and
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to ascertain whether an investment in the SICAV is appropriate in view of each investor's circumstances, taking account of his investment objectives, risk profile andpersonal, financial, regulatory and tax situation. All investments entail risks, particularly the risk of fluctuations in values and returns. Historical performances and financialmarket scenarios are no guarantee of present or future returns. Any data on performances mentioned herein do not include fees and other charges levied upon the issueand redemption of the SICAV's shares. Any reproduction of this document, in whole or in part, is prohibited without the SICAV's prior consent in writing.
The main investment objective of each sub-fund shall be to preserve the substance of capital invested long term and to distribute appropriate income. To the extent possiblethe SICAV's Board of Directors and Investment Manager shall strive to pursue the specific investment strategy drawn up for each sub-fund as set out in the SICAV's TermSheets relating to the investment regulations. The implementation of said strategies may nevertheless be subject to constraints and to regulatory and legal procedures suchas the Swiss rules on purchasing property for residential purposes. No assurance can be given by the SICAV, the Board of Directors, the Fund Management Company orthe Investment Manager that residential property contemplated for purchase by the SICAV will be confirmed by the relevant federal and/or cantonal authorities as not beingsubject to said constraints and procedures.
This document is not intended for persons subject to legislation prohibiting their access to such information by virtue of their nationality, status or domicile. In particular, theSICAV has not filed and will not file an application with the US Securities and Exchange Commission for authorisation to offer or sell its shares to the public under theSecurities Act of 1933. The SICAV is not and will not be registered under the Investment Company Act of 1940 as amended. This document may not be distributed, andshares in the SICAV may not be offered, in the United States of America or in any territory, possession or region that is subject to its jurisdiction.
25BANQUE PRIVEE EDMOND DE ROTHSCHILD S.A. INVESTMENT FUND DEPARTMENT