REAL ESTATE – Publica, a pension fund for federal employees that is one of Switzerland’s largest, has invested CHF110m (€70m) in the creation of 240 new flats in the city of Basle.
Publica, which allocates 4.5% of its CHF32.8bn in assets to real estate, said the investment supported the efforts of Basle’s government “to create more attractive housing for families and the middle class”.
Under the project, called Erlenmatt, the first of the 240 flats are to be completed in the winter of 2008 and the rest by 2010. Ultimately, between 700 and 800 new flats are to be constructed under Erlenmatt.
“As an investor, Publica sees a chance to act as a co-developer of a new city quarter and to positively influence that quarter’s future. Publica feels that social factors are just as important as the architecture, the size of flats and the spaces of green,” said Danilo Menegotto, head of real estate at Publica.
According to Publica’s latest annual report, the fund’s CHF1.5bn in real estate assets had a return of 5% for 2005.
The scheme invests directly in property throughout Switzerland. It said that during 2005, it had invested in eight new construction projects that were worth CHF405m.
This new investment is in addition to 19 current projects which Publica has funded to the tune of CHF850m. These projects are to be completed between 2006 and 2009.
All told, Publica owns 41 objects, 17 of which are commercial and 15 residential. The other nine are both residential and commercial.
In the report, Menegetto said that despite several challenges such as falling rents for commercial property, Publica’s real estate assets would have a return in 2006 that is on par with that of 2005.