Capital Increases of Swiss Real Estate Funds: Inside the Share-Creation Machine

Key Takeaways

• Definition: in a capital increase, a listed real estate fund issues new shares to finance its growth. The new shares are offered first to existing holders, through subscription rights that trade on the exchange.
• A record wave: listed Swiss real estate funds raised about CHF 4 billion in 2025, through 35 capital increases. By early June 2026, roughly CHF 3.7 billion of increases had already been announced or completed for the year across the broader universe of indirect real estate investments – a record at that point.
• The issue price is set near NAV, not near the share price: in Switzerland, new shares are generally issued at net asset value, plus accrued income and an issuance commission. With a 30% agio, subscribing means buying well below the market price – which is exactly what gives subscription rights their value.
• Issuance follows the agio: in our universe, only 4 funds grew their shares outstanding across the 2023 reports, at the bottom of the market; 15 did across the 2024 reports, then 23 since the 2025 reports. The issuance window opens when shares trade above the value of the buildings – and closes when they don't.
• Dilution, measured: between their last 2023 report and their latest available report, 27 of the 43 funds in our perimeter increased their share count – by +14.3% at the median for the issuers, with a maximum close to +80%. The median fund of the universe grew its share count by 10%.
• Unused rights expire without compensation: holders who prefer not to subscribe can generally sell their rights on the exchange during the set period; rights neither exercised nor sold expire afterward, and whatever value they carried is lost.
• Key reflex: a capital increase is neither good nor bad news in itself. It finances the fund's growth; what remains to be checked is whether that growth benefits the holder – the yield on the buildings acquired, the manager's discipline, and the path of the distribution per share.

Introduction

In the spring of 2026, the announcements came thick and fast: several tens of millions of francs raised here, CHF 85 million there, about CHF 90 million elsewhere. After a record 2025 – roughly CHF 4 billion raised by listed funds alone – the Swiss real estate fund market is stringing together capital increases at a record pace.

In our article on the agio, we examined what investors pay when they buy a listed fund share; in the one on the distribution yield, what they receive. This article looks at the mechanism connecting the two: the share-creation machine. Why do funds raise capital? How does an increase actually unfold for the holder? Why does the current wave coincide with historically high agios? And what does our data say about actual dilution, fund by fund?

Why Do Real Estate Funds Need to Raise Capital?

Unlike an ordinary real estate company, a Swiss real estate fund cannot grow on credit indefinitely: the Collective Investment Schemes Ordinance caps borrowing at one third of the market value of the buildings on average. Once that headroom is used, any additional project – an acquisition, a construction, an energy retrofit – must be financed with equity.

Three uses dominate in issuance prospectuses:

• Acquiring and building: seizing purchase opportunities or funding a project pipeline, in a market where quality assets remain contested.
• Renovating: energy-retrofit programs for existing portfolios absorb growing amounts.
• Deleveraging: repaying mortgage debt to restore borrowing headroom – and reduce interest costs.

The capital increase is therefore the obligatory path to growth for a real estate fund. The question for investors is not whether funds should raise capital – they must, if they want to grow – but on what terms and with what discipline.

The Mechanics: Subscription Rights and an Issue Price Built on NAV

A Swiss capital increase follows a well-codified script. The fund announces an issue volume, a subscription ratio (say, one new share for five existing shares), and a subscription period of one to two weeks. Each existing share receives one subscription right; during the issuance period these rights generally trade on the SIX, and the placement is most often done on a "best effort" basis: the amount ultimately raised depends on demand.

The most important point – and the most specific to the Swiss market – is the issue price. It is not set against the market price but built from the net asset value: the NAV at the last closing, plus income accrued since, plus an issuance commission paid to the fund. When the share trades at a substantial agio, the issue price therefore comes out well below the market price.

A worked example makes the mechanics concrete. Take a fund whose share trades at CHF 130 against a NAV of CHF 100 (a 30% agio), issuing one new share for five existing ones at an issue price of CHF 102:

• A holder of five shares receives five rights, allowing them to subscribe to one new share at CHF 102 – while the theoretical price after the issuance settles around CHF 125.33 ((5 × 130 + 102) / 6).
• The theoretical value of the right thus comes to about CHF 4.67 per existing share (130 − 125.33).
• If the holder subscribes, they invest a further CHF 102 and their stake in the fund is preserved. If they prefer not to subscribe, they sell their five rights on the exchange and collect about CHF 23 – compensation for the slight dilution of their position.
• If the rights are neither exercised nor sold before the deadline, they expire: in this example, the dilution then goes uncompensated.

One important clarification: issued at NAV plus a commission, the new shares do not dilute the net asset value of existing shares – the operation is neutral, even slightly accretive, to NAV per share. What gets diluted is the agio: the theoretical price moves closer to NAV as "at-NAV" shares are added to "at-market-price" shares. The effect on income depends on how the proceeds are deployed – we come back to that below.

Why Issuance Follows the Agio

This pricing mechanism explains a striking regularity of the Swiss market: capital increases cluster in periods of high agios.

The reason is arithmetic. When the share trades 30% above NAV, subscribing near NAV is economically attractive – issues meet their demand. When the share trades below NAV, as was the case for more than half of the listed funds in 2023, nobody subscribes at a price above the market price: the window closes, and funds that absolutely need financing have no choice but to wait – or to sell buildings.

Our data illustrates this cycle unambiguously:

Source: Apollo 8 – shares outstanding extracted automatically from each fund's official annual and semi-annual reports; market figures: Immoday, Alphaprop.

This cycle has a direct consequence for investors: issuance arrives en masse when the market is expensive – precisely when fresh capital gets deployed into buildings with compressed yields. The manager's investment discipline therefore matters more at the top of the cycle than at the bottom.

What Our Data Shows: Dilution Measured Fund by Fund

At Apollo 8, our proprietary database tracks listed Swiss real estate funds through their official reports – balance sheets, NAV per share, distributions, and shares outstanding, extracted automatically from more than 340 reports since 2020. Of the 46 funds tracked, 43 have a usable shares-outstanding series from the end of 2023 to the latest available report (December 2025 or March 2026, depending on each fund's calendar); two funds lack sufficient history and one is set aside for want of reliable attribution between compartments.

Here is the snapshot for the period running from the last 2023 report to the last published report:

Source: Apollo 8 – shares outstanding at each fund's last 2023 report and last published report, extracted from official reports; extraction as of July 17, 2026.

Three observations stand out:

• Share creation is massive and broad-based. Nearly two thirds of the funds issued in a little over two years, and the median fund of the universe grew its share count by 10%. Valued at the NAV of their latest report, the new shares of the 27 issuing funds represent on the order of CHF 5 to 6 billion – an order of magnitude consistent with the amounts recorded by the specialized press over the same period.
• The dispersion is considerable. Fifteen funds grew their share count by 14% or more; one of them increased it by close to 80%, literally changing size. At the other end, seven funds show a slightly declining share count – redemptions and share cancellations, the exit mechanism provided by law, remain marginal in volume.
• Fund growth does not mean growth in income per share. As our article on the distribution yield showed, no fund in our database cut its distribution between 2024 and 2025 – but 26 of 42 simply held it to the exact centime, even as many were raising substantial capital. Size is growing faster than the payout.

Holding Shares Through a Capital Increase: The Reflexes

• Know the calendar. Whatever value the rights carry does not survive the subscription period. Following the operation from the day it is announced leaves time to choose, with full information, between subscribing, selling the rights, or accepting the dilutive effect.
• Compare the issue price with the market price – and with NAV. The wider the gap between market price and issue price, the more the rights are worth and the likelier the issue is to be subscribed. An issue price close to the market price signals a low agio – and a less obvious operation.
• Read the use of proceeds. Identified acquisitions, a project pipeline, deleveraging: the issuance prospectus details the allocation. A fund raising "to seize opportunities" without a specific pipeline deserves more scrutiny than one financing projects already under way.
• Check the manager's track record. A fund that has issued several times in recent years has a history: did NAV per share, the distribution per share, and the vacancy rate hold up after the previous raises?
• Follow the distribution per share, not the fund's total assets. That is the indicator that says whether growth benefited the holder. A flat distribution while the fund doubles in size is a mixed signal; a rising distribution once the capital is deployed indicates the growth has benefited holders.

Points of Vigilance

Three risks deserve naming. First, yield dilution: capital raised at the top of the cycle gets deployed into expensive buildings – managers interviewed by the specialized press cite gross yields fallen below 3% for city-center residential property. Fresh capital invested at those levels mechanically pulls the portfolio's average yield down, and with it, over time, the distribution capacity per share.

Second, pressure on agios: every issue adds paper supply. As long as inflows keep pace – and they were record-breaking in 2025 – the market absorbs it; if appetite turns, a heavy issuance calendar can weigh on prices, as the 2022–2023 correction described in our article on the agio showed.

Third, execution risk: most issues are done on a "best effort" basis – the amount raised can fall short of the target if demand is lacking, leaving the fund with a partially funded pipeline. The subscription rate of past issues, published by the funds, is an indicator of the depth of demand for a given vehicle.

Conclusion

The capital increase is both the growth engine of Swiss real estate funds and one of the mechanisms individual holders understand least. The mechanics – tradable subscription rights, an issue price built on NAV – are designed to preserve existing holders: most of the dilutive effect can be offset by exercising or selling the rights. The record wave of 2025–2026, concentrated – as in previous cycles – in a phase of high agios, shifts the question to what comes after: the capital raised – several billion francs, and a share count up 10% for the median fund of our universe in a little over two years – will have to turn into income per share, in a real estate market with compressed yields.

To place an issuance in its valuation context, we refer the reader to our article on the agio; to measure what the holder ultimately receives, to the one on the distribution yield.

Sources

1. Immoday – « Comment se passera 2026 pour l’immobilier titrisé ? La réponse des gérants de fonds » (January 26, 2026)
2. Alphaprop – « Les placements immobiliers indirects suisses en juin 2026 » (June 2, 2026)
3. Immoday – « UBS “Sima” : augmentation de capital avec droit de souscription » (2024)
4. Immoday – « Dominicé Swiss Property Fund : augmentation de capital prévue d’environ CHF 90 millions » (2026)
5. Immoday – « SF Sustainable Property Fund : conditions de l’augmentation de capital » (2026)
6. Federal Act on Collective Investment Schemes (CISA), SR 951.31
7. La Fonciere – Fund strategy (statutory borrowing limit of one third of market value)
8. SIX – SXI Real Estate Funds Broad index (SWIIT), composition and methodology