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Properties on a good ground

Portrait

Warteck Invest thrives on a strategy of buying and managing property. The real estate is purchased to be kept in the company’s portfolio and rented out. While the real estate specialist does occasionally sell property, that is not the core business. The company’s focus is on renting. “About 44% of our earnings come from apartment rentals,” says Managing Director and Chief Financial Officer Daniel Petitjean. He has held this position for the past ten years. “The rest is from the rental of stores, offices and commercial premises. We do not offer any industrial property, though.”

Sustainability is a big topic with Warteck Invest, but it is not only used to refer to the environment. “We want a sustainable investment strategy, and that is an important focus for us,” Mr. Petitjean explains the company’s success. Because a solid strategy is not enough, the real estate experts back it up with a top-notch portfolio currently made up of 43 well-diversified properties that the company manages itself. Warteck Invest’s property is mostly concentrated in the regions surrounding Basel and Zurich. The remainder is distributed throughout nine other cantons of German-speaking Switzerland.

Warteck Invest concentrates on safe investments, and the company avoids unnecessary risks. “That means that we have somewhat lower yields, but we make up for that with much more sustainable realization of profits,” the managing director describes the tactic. The company’s properties tend to be filled, though, which balances out any potentially low yields with guaranteed income. “The remarkably low rate of vacancy is, if nothing else, contingent upon the maintenance of the properties on our own,” Mr. Petitjean points out. “Another positive result of that is close customer relations.” Moreover, Warteck Invest has a relatively high percentage of residential property and good diversification in terms of both geography and types of tenants.

These are just a few points that distinguish the real estate company from the competition. The list does not stop there, though. “We are one of the smaller firms among the stock-listed companies in the sector,” Mr. Petitjean points out. “Our company stands out, however, thanks to our high profitability and the lowest rate of vacancy. Plus, what has helped us with these two characteristics is that we prefer to emphasize quality over quantity.”

Warteck Invest AG is a stock-listed real estate company that was first founded in 1856 as a brewery. In 1989, the brewery turned into a real estate company. It was a fate shared by many breweries in Switzerland at that time. Today, the majority of the company is in the hands of shareholders, owning nearly 72% in free float. The single biggest shareholder is Dr. Christoph M. Müller and his family. They own more than 28%. He is not a member of the founding family, however. Dr. Müller acquired larger stock positions several years ago and has held them ever since.

Warteck Invest has 14 employees and earned 26.2 million CHF in rental revenues in 2012. Through the purchase of three additional properties, turnover is expected to have increased for 2013. Apart from Mr. Petitjean, Warteck Invest is headed by Philipp Moulin, responsible for real estate management, and Daniel Breton, in charge of facility management and construction.

The primary medium for customer contact is the company’s website, in addition to two business reports a year. “Otherwise, we do not have any major campaigns,” the managing director highlights. “Every property is unique and is therefore marketed individually.” Warteck Invest targets tenants for apartments and commercial property.

The real estate market is currently experiencing a positive trend. Over the past few years, prices have been increasing again in the property sector. At the same time, there is a scarcity of investment opportunities in Switzerland. “There are a lot investors looking for investment options, which is why so many of them have entered this market,” Mr. Petitjean describes the situation. “As a result prices have been driven upwards, making investments highly profitable.” However, that is only one side of Warteck Invest’s business.

On the other side, there is a shortage of housing in Switzerland due to constant immigration. Modern real estate is in high demand while less attractive properties are losing their value. The company maintains its residential real estate well, keeping it in high demand and guaranteeing little vacancy.

Warteck Invest aims to build on its current successes and continue operating in its field. In addition, the company wants to expand its area of activity. “In the future, we do not want to restrict ourselves to the purchase of existing real estate anymore,” Mr. Petitjean says. “Instead we also want to carry out real estate projects on a limited scale.”

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