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Annual Report2004/2005
AFIAA Annual Report 2004/2005 3
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AFIAA Annual Report 2004/2005 �
Contents
IntroductionOrganizational Structure and Management 6Introductory Remarks from the President of the Foundation Board 7Investment Office Report 8
Investment PolicyInvestment Policy 12Diversification 12TargetReturnonInvestment 12Selection 12DueDiligence-Process 13Investments 14
IndicesIndices as of 9/30/05 18AssetsandShares 18CapitalCommitmentsandLiabilities 18PortfolioStructure 19
Special AssetsCapital Commitments and State of Shares 22DevelopmentintheStateofShares 22Investments as of 9/30/05 24IndirectInvestments(Funds) 24DirectInvestments 26Income 28OutsideCapital 28Expense 28TotalExpenseRatio 29Consolidated Asset Account 30AssetAccountasof9/30/05 30IncomeStatementfrom8/12/04to9/30/05 31ChangesinNetAssets 32RequestforUseofIncome/Profit 32Administrative Account of the AFIAA Investment Foundation 33Balanceasof9/30/05 33IncomeStatementfrom8/12/04to9/30/05 33RequestforUseofIncome/Profit 33
AppendixInformation concerning the Financial Statements and Annual Report 36Report of the Auditing Firm 43Glossary 44Address and Bank Information 46Professional Memberships 46
Introduction
� AFIAA Annual Report 2004/2005
Organizational Structure and Management
OrganizationFoundation Board
AndreasMarkwalder President
DanielGloor Vice-President
CarloGarlant Member
Dr.ChristophBurckhardt Member
Investment Comittee
HeinrichJezler President
AndreasMarkwalder Vice-President
Dr.ChristophCaviezel Member
Dr.SteffenMetzner Member
HansJuergStucki Secretary1
Auditing Firm
Ernst&YoungAG
ManagementInvestment Office
HansJuergStucki Director
DavidDoering PortfolioManager
GabrieleWolfram PortfolioManager
Administration
PriveraAG
AppraisersDanielConca PresidentoftheSwissChamberofAppraisalExpertsSEK/SVIT
MartinFrei MemberoftheExecutiveBoardoftheSwissAssociationofRealEstateAppraisersSEK/SVIT
1withoutvotingrights
Introduction
AFIAA Annual Report 2004/2005 �
Introductory Remarks from the President of the Foundation Board
Introduction
Today,thenumberofinvestorshasincreasedto
seven,andcapitalcommitmentshaveincreasedto
346millionCHF.WhentheFoundationBoardstarted
tolookforasalespartnerintheFrench-speakingpart
ofSwitzerland,itwasmadeevidentthatwewere
lookingtoexpandourinvestorbase.Wedo,however,
holdfasttoourprincipleofputtingqualitybefore
expansion;therefore,wearenotwillingtopayjust
anypricerequestedforcertainrealestateproperties.
TheBoardisconstantlydealingwiththeargument
thatrealestatehasbecomemoreexpensiveincertain
areasaroundtheworld.Itisalsocriticallyobserving
thedevelopmentofhistoricallylowinterestrates.
Ourgoalinthecurrentfiscalyearistoaddmoredi-
rectinvestmentstotheportfolio,mainlywithinour
currentcorecountries,whichare:theUS,Canada,
France,andGermany.Atthesametime,however,we
willbebuildingthestructuresandtheknow-howfor
investmentsinothercountries.Wewillalsobeat-
temptingtogainafootholdontheAsianmarketand
incertainnewlyindustrializingcountries;however,
atfirst,onlyonthebasisofindirectinvestments.
Furthermore,wewilladaptourstart-upandstandard
procedurestoourplannedgrowth.Nevertheless,our
maingoalremainsobservingtheinterestsofourin-
vestors.
Zurich,October2005
AndreasMarkwalder
PresidentoftheFoundationBoard
“Youcanonlybesuccessfulinlife,ifyoudosome-
thingwhileyou’rewaitingforsuccess.”ThomasAlva
Edison,thegreatAmericaninventor,couldeasily
havebeenalludingtothemotivationdrivingfour
pensioninsurancecompaniesthatbegancollaborat-
ingaboutoneyearagotofindrealestatebusiness
opportunitiesabroad.HighdemandwithintheSwiss
realestatemarketandthepromiseofmorediver-
sificationwiththenewinvestmentsegmentwere
bothreasonsforestablishingthe“Anlagestiftungfür
ImmobilienimAusland(AFIAA)”[Foundationfor
InternationalRealEstateInvestments].
Afterhurdlingafewstart-updifficulties,i.e.obtain-
ingthe“BundesamtfürSozialversicherungen’s”
[SwissSocialSecurityAdministration’s]authoriza-
tion,theAFIAAproceduresandstructuresarenow
verystableandhighlyprofessional.While,inthe
beginning,wewereonlyabletoinvestindirectlyto
secureenoughdiversification,alreadybymid-July
2005,afterextensiveduediligenceprocedures,we
hadsuccessfullyintegratedpropertyinNewYork
intoourprogram.Currently,theFoundationdirectly
ownsfourproperties;oneofthemintheUSand
threeinGermany.Weareclosetosigningcontracts
concerningafewotherpropertiesintheUS,France
andCanada.
Oneofthegreatestchallengesthatwehadtoover-
comewastaxissues.Taxissuesaresocomplexthat
wehadtomakeeveryefforttofindadequatesolu-
tionsandstructuresinalltherespectivecountriesin
ordertoprovideourinvestorswithoptimumoppor-
tunities.Oursuccessfulbeginningsarelargelydueto
thecommitmentandcompetencyofourInvestment
OfficeandoftheAdministration,butalsoduetoall
ofourotherglobalpartners.
� AFIAA Annual Report 2004/2005
Investment Office Report
Structure and ImplementationTheportfolio’sstructurefollowstheinvestment
directivesandthebylaws.AtthistimeAFIAAis
directlyorindirectlyinvestedinthreecountries.
AFIAAmaintainsanetworkoflocalpartnerships
withintheUS,Canada,Germany,FranceandSpain
withthosewhoaremostfamiliarwiththemarket.
AFIAAhasfoundedbranchofficesinNewYork
CityandMunich.Thesebranchesfunctionfirstand
foremostaslocalcontactswithintheforeigncountry.
Furthermore,fromnowonthecompanystructure
oftheinvestmentswillbemonitoredandgoverned.
Allinvestmentswillbedirectedintothosecompany
structureswhicharefiscallyandeconomicallyideal.
Inthefirsthalfoftheyear,weheldonlyindirect
investments,specificallythosewithinfourdifferent
funds.Ourpurposewastoachievegooddiversifica-
tionwithlittleinvestment.Currently,throughthese
fourinvestments,AFIAAhasaninterestin29office
andresidentialrealestatepropertieswithinEurope
andtheUS.
Duringthecourseofthesecondhalf,directinvest-
mentswereaddedtotheportfolio.Fourdirectinvest-
mentswereplaced;withoneinNewYork,onein
MunichandtwoinDüsseldorf.
OutlookTheInvestmentOfficewillconcentrateonacquiring
directinvestmentsincountrieswhereanetworkhas
beendeveloped.In2006theseactivitiescouldbeex-
pandedtooneortwoadditionalcountries.Therefore,
officepropertycontinuestobeintheforeground;
however,wearealsosearchingforsuitableretail
property.Atthepresenttime,wehavesolidnegotia-
tionsconcerningacquisitionswithintheUS,France,
Germany,andCanada,totheextent,thatfurther
acquisitionsareexpectedwithinthelastquarterof
2005.Weareplanningtoinvestlessinfundsandif
wedo,thenonlyinmarketsandinusesinwhichthe
directinvestmentsarenotefficient.
HansJuergStucki
Director
Introduction
Investment Policy
12 AFIAA Annual Report 2004/2005
Investment Policy
AFIAAinvestsonlyinhighqualityrealestateabroad
thatisnotlistedonthestockexchange.Thisallows
ustotakeadvantageoffavorablemarketsworldwide
andthevariousdegreesofvalue-addedpotentialof-
feredbyrealestateinvestments.Ourfocusisonthe
long-termfinancialgoalsofourinvestors.
Wearesystematicallyestablishingandmanagingour
portfoliobyweightingmarkets,segments,invest-
mentstrategiesandpurposesontheonehandand
bycarefullyselectingpropertiesandpartnersonthe
otherhand.
Duringthestart-upphase,investmentsinfundshave
prioritybecausethismeansacquiringsharesinport-
foliosthatarealreadydiversified.Lateron,wewill
acquireindividualinvestmentpropertiesaswell,in
ordertosupplementAFIAA’sportfolioinaccordance
withourgoals.
DiversificationOptimaldiversificationisthekeytominimizingrisk
whilemaintainingaconstantrateofreturn.
AFIAA’sportfoliodiversificationincludesthefol-
lowingelements:
• Markets:Mainlythecore15EuropeanUnion
countriesandNorthAmerica(approx.90%);
DevelopingmarketsinEasternEurope,Central
andSouthAmerica,andAsia(approx.10%).
• Investment Categories:Directinvestments
50%to70%;Indirectinvestments(funds)
30%to50%.
• Investment Strategies:Core/CorePlus,Value
Added,Opportunity.
• Sectors:Office,residential,retailandmixed-use:
80%to90%;Hotels,logistics,industrialproper-
ties,parksandleisurefacilities,seniorresidences,
hospitals:10%to20%.
• Property Value:Targetvaluebetween10and70
millionSwissfrancs.
Investment Policy
Target Return on InvestmentSinceourtargetportfolioincludesacombinationof
investmentstrategies,AFIAAreportsboththeannual
distributionofprofitsandtheInternalRateofReturn
(IRR)askeymeasurements.
Duringthestart-upphaseweexpectalowannual
rateofreturn,butinthemid-termweexpect4%to
6%.Inthelong-termweexpectanIRRof6%to
7%.
SelectionAllinvestmentsgothroughaselectionprocessthat
includesseveralstages.Theinvestmentstrategyand
targetportfoliodetermineourchoiceofinvestments.
Inallcases,weassesscriteriathatisespeciallyrele-
vanttorealestatevalues(location,market,construc-
tionquality,tenant(s),leaseagreements,coststruc-
tures,futuredevelopments,management),aswellas
taxandlegalaspects.
Inthecaseofinvestmentsinfunds,wefurtherexam-
ineothercriteriarelevanttosuccess(transparency,
investmentstrategy,managementqualityandmotiva-
tion,feestructures,leverage,liquidityandassess-
mentstandards).
AFIAA Annual Report 2004/2005 1�Investment Policy
Due Diligence-ProcessTheassessmentiscarriedoutbyapplyingaproven
methodthatinvolvesseveralsteps,andtheprocess
ismonitoredbyastrong,internationallyactiveDue
DiligenceTeam.
I. Research und Analysis (Sourcing)
Weanalyzethemarketandtherespectiveproperties
andidentifygeneralriskfactors,primarilybyapply-
ingthebottom-upprocess,whichtakespropertyand
managementqualitiesintoaccount;andsecondlyby
applyingthetop-downprocess:
Global➞Regional➞Local(MarketandOECD-
Reports,historicaldata,regional/localinformation).
II. Due Diligence/Structuring
FirstAssessmentStep:DueDiligenceiscarriedout
byastrong,internationallyexperiencedteamwith
localcompetence.Theyassesstheinvestmentvalue,
propertystructure,taxandlegalaspects,financing,
choiceofpartners,etc.
III. Approval
SecondAssessmentStep:Approvalmustbegranted
byinternalexpertsandmembersoftheInvestment
Committee.TheInvestmentCommitteemustap-
proveoftheproposal.
IV. Active Management
Participationinfundadvisoryboardsandon-site
visits.Monitoringofthefundsandtheindividual
properties.Ongoingsensitivityanalysis,return/risk
calculations(worst/mostrealistic/bestcase).
V. Exit
Modulationundformulationoftheexitstrategy.
14 AFIAA Annual Report 2004/2005
InvestmentsAFIAAinvestmentsincludedirectandindirectreal
estateinvestments.Theinvestmentsinvolvingin-
directrealestateinvestmentsareconcentratedin
thefundwhichisnotlistedonthestockexchange.
Investmentsinrealestatefunds,whicharelisted
onthestockexchange,werediscontinuedbythe
FoundationBoarduntilfurthernotice.
Investment Policy
Indices
1� AFIAA Annual Report 2004/2005
Indices as of 9/�0/05
Assets and Shares 9/30/05 9/30/05 8/12/04 Change
Collective per Share Thousand CHF CHF CHFCapitalValue 103,975 119.29 100.00 +19.29%NetAssets 100,093 114.84 100.00 +14.84%FiscalYear’sNetIncome (3,882) (4.45) 0.00
Units UnitsSharesinCirculation 871,552 0 +100.00%RecalledShares 0 0
Capital Commitments and LiabilitiesInvestors
Thousand CHF Thousand CHFCapitalCommitments 346,000 CapitalCallsIncluded 94,040 OpenCapitalCalls 30,900Balance - Capital Commitments 346,000 Balance - Capital Calls 124,940CapitalCalls (124,940)Balance 221,060Liabilities (135,437)Balance - Capital Commitments 85,623
Investments
Thousand CHFCapitalCommitments 331,765ContributionofOutsideCapital (76,512)Balance 255,253CapitalPayments (119,816)Balance - Liabilities 135,437
Indices
Thecapitalcommitmentsoftherespectiveinvest-
mentsinforeigncurrencywerecalculatedaccording
totheexchangerateonthekeydate.
Thecapitalcallswerecalculatedretroactively.
Theliabilitiescorrespondtothoseopenliabilitiesset
forthinnumber5oftheExplanatoryNotes.
AFIAA Annual Report 2004/2005 19Indices
Regions
(Directandindirectinvestments.)
USA52%
EU-1548%
Direct and Indirect Investments
IndirectInvestments
29%
Direct Investments71%
Investment-Strategies
(Directandindirectinvestments.)
Core/Core Plus94%
Opportunity5%
Value Added1%
Portfolio StructureTheeffectiveinvestedfunds–withoutadditional
capitalcommitment–arediversifiedasfollows:
Special AssetsAFIAA Immobilien CHF Swiss Securities No. 1.95�.4�2
22 AFIAA Annual Report 2004/2005
Capital Commitments and State of Shares
Development in the State of Shares Shares Net Assets Units CHFBalanceasof8/12/04 0 0.00NewSubscriptions 871,552 97,022,781.52Retractions 0 0.00Balance as of 9/30/05 871,552 102,929,637.31OpenCapitalCallsasof9/30/051 30,900,164.43
1Capitalcallsnotyetconverted.SeeexplanatorynoteIV.
Special Assets
166,000
346,000
Capital Commitments as of 8/12/2004
Capital Commitments as of 9/30/2005
Capital Calls as of 9/30/2005 124,940
Capital Commitments and CallsinThousandCHF
On8/12/2004,atthebeginningofthefirstfiscalyear,
AFIAA’sinvestorshadpledgedtocommitinvest-
mentstoAFIAAintheamountof166,000,000CHF.
Duringthesecondhalfoftheyear,wewereableto
obtainhighercapitalcommitmentsandattractnew
investors.Ourthreenewinvestors,whocommittedto
makingacontributionof40,000,000CHFtoAFIAA,
havealreadysubscribedforsharesduringthisreport-
ingperiod.Bythetimeofthisreport,investorshave
nowcommittedtocontributingatotalamountof
346,000,000CHFtothecompany.Ofthat,theinves-
torshavealreadyallocatedatotalof124,940,000CHF
insixcapitalcalls.Wearecurrentlyholding871,552
unitsofshares.CapitalcallsNo.5and6havenotyet
beencompletelyallocated.Attheendofthisfiscal
year,noneoftheseshareshavebeenrecalled.
24 AFIAA Annual Report 2004/2005
Thestateoftheinvestmentsatthetimeofreporting
correspondstothepurchasesmadeinthefirstfiscal
year.Whilebuildinguptheportfolio,theInvestment
Foundationinvestedindirectrealestateandalsoin
indirectrealestateproducts.Norealestatewassold
duringthisreportingperiod.
Indirect Investments (Funds)Theindirectinvestmentspertaintoholdingsin
fundswhicharenotlistedonthestockmarket.The
fourfundsweregivencapitalcommitmentstotaling
133,443,000CHF.Theindividualfundshavecalled
andinvestedthefollowingsharesinthefollowing
capitalcommitments:HinesEuropeanValueAdded
Fundapprox.6%;HinesU.SCoreOfficeFund
100%;AIGU.S.ResidentialRealEstatePartners
62.5%;BroadwayPartnersRealEstateFund40%.
Capitalcallsandinvestmentsinthefundsamountto
atotalcapitalof57,041,307CHF.
Hines Eur
opea
n Value
Added
Fund (H
EVAF)
EUR40
,000
Broad
wayPart
ners
Real
Estate
Fund
USD5,0
00Hine
s USCor
e Office
Fund (H
USCOF)
USD30
,000
AIGU.S
. Res
identi
al
Real E
state
Partne
rs
USD20
,000
USD2,0
00
USD30
,000
USD12
,492
EUR2,3
68
Capital Commitments as of 9/30/2005 CHF 133,443
CHF 57,041Capital Calls as of 9/30/2005
Indirect Investments - Capital Commitments and Calls(respectivecurrencyinthousands)
Investments as of 9/�0/05
Special Assets
AFIAA Annual Report 2004/2005 25
F-001: Hines U.S. Core Office Fund (HUSCOF)
Thisopenfund,whichhasanunlimitedduration,
heavilyinvestsinofficerealestatepropertieswithin
theUS.Indoingso,acorestrategyisfollowed
inwhichthefundsinvestinveryvaluable,exist-
ingbuildings,whichareexpectedtomaintaintheir
value.Thegoalistogeneratestable,regularrevenue.
AFIAAisparticipatinginalimitedpartnership
thathasitsheadquartersintheUS(U.S.L.P).Asof
9/30/05,thefundhasaninterestinnineproperties.
Anotheracquisitionisbeingnegotiatedatthistime.
F-002: AIG U.S. Residential Real Estate Partners
Thisclosedfundinvestsinresidentialproperties
intheUS.Anopportunisticstrategyisfollowed,
inwhichthefundacquiresthoseexistinghous-
ingpropertiesthatexhibitthepotentialtoappreci-
ateinvalueandthosewhichtakepartindevelop-
mentprojects.Thegoalistorealizeanappreciation
invalue.AFIAAisintheprocessofinvestingina
limitedpartnershipthatisheadquarteredintheUK
(UKL.P).Asof9/30/05,thefundhasaninterestin
16properties.Numerousotherprojectsareunder
way.Thefirstprojectisalmostcompletedandprofit
resultingfromthefirstsaleisexpectedtobedistrib-
utedtoAFIAA.
F-00�: Hines European Value Added Fund (HEVAF)
ThisclosedfundinvestsinEurope,mainlyinof-
ficerealestateproperties.Avalueaddedstrategyis
followed,inwhichthefundsacquirepropertiesthat
exhibitdevelopmentpotentialinordertoresellthem
afterashortholdingperiod.Thegoalismainlyrev-
enueresultingfromappreciationinvalue;however
thegoalisalsotoreceivesteadyrevenue.AFIAA
investsthroughparticipationwithaFondscom-
mundePlacement(FCP),whichisheadquarteredin
Luxemburg.Asof9/30/05,thefundisholding
apropertyinSpain.AnotheracquisitioninFranceis
beingnegotiatedatthistime.
F-004: Broadway Partners Real Estate Fund
ThisclosedfundinvestsintheUS,mainlyinoffice
realestateproperties.Acoreplusstrategyisfol-
lowed,inwhichthefundacquirespropertiesthat
exhibitpotentialfordevelopment,inordertoallow
themtoappreciatewhiletheyareheldfora“me-
dium”term.Thegoalistoreceivegainsresulting
fromappreciationinvalueandalsotoreceivesteady
revenue.AFIAAinvestsinaRealEstateInvestment
Trust(REIT)throughparticipationinalimitedpart-
nershipthatisheadquarteredintheUS(U.S.L.P).
Asof9/30/05,thefundhasthreeinvestments.The
committedcapitalfromalloftheinvestorswillsoon
becompletelyinvested.Thefund’smanagementhas
alreadyofferedthesubsequentfund.
Special Assets
2� AFIAA Annual Report 2004/2005
Direct InvestmentsAtotalof60,485,000CHFofequitycapitalisin-
vestedinfourdirectinvestments.
DA-001: Munich, Georg-Brauchle-Ring 52-54 - Core Investment
Thisbuilding,locatedinMunich,isapartofthe
ensembleentitled“UptownMunich”.Itislocatedin
theneighborhoodofthespectacularOlympicPark
andisanewaddressfortop-qualitybusinessesand
residences.Thetransportationconnectionstothecity
centerandtotheairportareideal.AFIAAacquired
oneofthefour“CampusBuildings”:“CampusB”is
rentedlong-termtothetelecommunicationcompany,
O2.Thebuildingistopqualityandoffersgreatflex-
ibilityconcerninglayout.Thepropertywasacquired
asofAugust24,2005.
YearofConstruction 2005RentableSpace 9,050m²Use 8,532m² Office 518m² Storage 88 ParkingSpaces
DA-002: Düsseldorf, Speditionsstr. 1� - Core Investment
Thisbuilding,named“Speicher”[silo],isapartof
theensemblenamed“Dock13”intheMediaHarbor
ofDüsseldorf.Thisofficeandrecreationalarea,
formerlyharborterritory,hasbeendevelopedsince
about1980.Thefacadeoftheformersilothatwas
builtin1938hasbeendeclaredahistoricalmonu-
ment;however,theinsideofthestructurewascom-
pletelystrippedontheinsideandconvertedinto
modernoffices.Therenovationwascompletedin
December2001.Becauseofitsstructure,wewere
abletodividethebuildingintoanimpressive18
units.Thebuildingalsohasaspectacularviewofthe
harborandthe“architecturalskyline”.Thisbuilding,
5,600m²,is100%rentedtosevendifferenttenants.
Therentableunitonthegroundfloorisusedasares-
taurant.ThisbuildingwasacquiredonSeptember1,
2005asapackagealongwiththepropertynamed
“Villa”.
YearofConstruction 1938/2001 Totally RenovatedRentableSpace 5,785m²Use 5,074m² Office 550m² Restaurant 140m² Storage 66 ParkingSpaces
Special Assets
AFIAA Annual Report 2004/2005 2�
DA-00�: Düsseldorf, Speditionsstr. 1�a - Core Investment
Thisbuilding,named“Villa”,isapartofthe“Dock
13”Ensemble.TheWilhelminianstylevilla,built
duringthe1900’s,hasbeencompletelystrippedon
theinsideandconvertedintomodernoffices.The
renovationwascompletedinNovember2001.This
building,1,100m²,is100%rentedtothemedia
firmQ1.ThisbuildingwasacquiredonSeptember1,
2005asapackagealongwiththepropertynamed
“Speicher”.
YearofConstruction 1900/2001 Totally RenovatedRentableSpace 1,211m²Use 1,107m² Office 104m² Storage 10 ParkingSpaces
DA-004: New York, 15� William Street - Core Plus Investment
ThisbuildingislocatedintheWallStreetDistrictof
DowntownManhattan.Thereisthepotentialthatthe
rentcouldberaisedonthispropertywhichis92%
rented.ThemaintenantistheCityofNewYork.We
areplanningmaintenanceprojectsforthecoming
yearandareintheprocessofnegotiatingwiththe
CityofNewYorkconcerningtheleasingofaddi-
tionalspace.Thisbuildingwasacquiredinmid-July
2005.
YearofConstruction 1955RentableSpace 20,220m²Use 19,780m² Office 440m² Storage 0 ParkingSpaces
Special Assets
2� AFIAA Annual Report 2004/2005
IncomeTheconceptualdesignofSpecialAssetsplacesthe
capitalgainsoftheinvestmentintheforeground.The
profitisparticularlymeasuredbytheInternalRateof
Return(IRR).Alreadyinthisfiscalyear,theindirect
investmentshavedistributedaprofit.Thisprofitto-
tals1,045,290CHF.
Thedirectinvestmentsthatwereacquiredduringthe
secondhalfofthefiscalyearhavearentalincomeof
1,542,009CHF.Theytoohavecontributedapositive
result.Inthisreportingperiod,thedirectrealestate
expensetotals1,258,555CHF.Respectively,the
availableliquidityfromthecapitalcallsisactively
managedandplacedinshort-termmoneymarket
investments.Theresultinginterestearnedamountsto
105,945CHF.
Outside CapitalTheamountofoutsidecapitalisindividuallydeter-
minedforeachdirectinvestmentandisrecordedin
thecorrespondingcountry’scurrency.Wetookona
totalof76,511,800CHFinoutsidecapital.Thiscapi-
talisheldinEurosandUSDollars.Atthetimeof
thisreportingperiod,theaveragepercentageofout-
sidecapitalforalldirectinvestmentsisabout56%.
Thepercentageofoutsidecapitalisunder40%
whenitismeasuredaccordingtothetotalportfolio.
Theindirectinvestmentscannotdirectlyinfluence
thedebttoequityratio.Thefund’smaximumper-
centageofoutsidecapitalallowedisdisclosedinthe
respectiveprospectusofthefund.Inaccordancewith
theparticularannualreportandfundinformation,the
fund’spercentageofoutsidecapitalcouldmoveto
aroundanaverageof60%.
ExpenseThepositiveoperatingincomeofthefirstfiscal
yearhasstillbeeninfluencedbytheinitialinvest-
mentexpense,whichexistsinconnectionwiththe
developmentandestablishmentoftheInvestment
Foundation.
Special Assets
AFIAA Annual Report 2004/2005 29
Costs CHF Percentage of Capital CommitmentsManagementCosts 1,277,964.00 0.37%OrganizationalCosts(FoundationBoard,etc.) 57,433.77 0.02%StructuralCosts(legalandtaxconsultancycosts,etc.) 757,842.89 0.22%GeneralAdministrationCosts 130,220.88 0.04%AuditingExpenses 177,970.63 0.05%Total Costs 2,401,432.17
Capital Commitments 346,000,000.00
Total Expense Ratio 0.69 %
Total Expense RatioTheTotalExpenseRatio,alsocalledTERorTotal
CostPercentage,placesallcostsinrelationshipto
theaverageamountofthefund’sassets.Theratio
containsallexpensesfortheInvestmentFoundation’s
organizationalbody.Thisincludesallofthecosts
relatingtothefollowingactivities:establishmentof
thenecessaryorganizationalstructures,preparation
oftheinvestments,acquisition,aswellasotherinci-
dentalexpenses.Inthefirstfiscalyear,thecostswere
presentedinrelationshiptothefollowingcapital
commitmentsoftheinvestor.
Special Assets
�0 AFIAA Annual Report 2004/2005
Consolidated Asset Account
Asset Account as of 9/�0/05Assets
in CHF Note Market Value 9/30/05Real Estate 197,329,166.96IndirectInvestments I 57,041,306.85DirectInvestments II 136,996,800.00DirectInvestmentPrepayments 3,291,060.11Other Assets 2,592,445.64ReceivablesfromThirdParties 530,763.97ReceivablesfromGoodsandServices 317,181.03AssetAccrued/DeferredItems 959,655.86PrepaidFinancingCosts 784,844.78Liquid Funds 14,881,053.24BankBalance 5,291,853.24Fixed-TermDeposits/CallableDeposits 9,589,200.00Total Assets 214,802,665.84
Liabilities
in CHF Note Market Value 9/30/05Mortgages III 76,511,800.00PayablesfromGoodsandServices 2,334,570.76ObligationstoThirdParties 11,786.04LiabilityAccrued/DeferredItems 885,951.50ObligationstoInvestors IV 30,900,164.43Total Liabilities 110,644,272.73
Net Assets
in CHF Note Market Value 9/30/05Net Assets before Liquidation Taxes 104,158,393.11EstimatedLiquidationTaxes V (4,065,219.27)Net Assets 100,093,173.84
Shares
SharesIssuedperKeyDate(Units) 871,552RecalledShares(Units) 0
CapitalValueperShare(CHF) 119.29NetProfitoftheFiscalYearperShare(CHF) (4.45)InventoryValue(NetAsset)perShare(CHF) 114.84
I-VSeeAppendixforexplanatorynotes.
Special Assets
AFIAA Annual Report 2004/2005 �1
Income Statement from �/12/04 to 9/�0/05Operating Income
Direct Investments CHFRentalRevenue 1,542,009.12OperatingCostsandRealEstateExpenses (1,213,511.61)Management/EconomicControl (45,043.57)Total Direct Investments 283,453.94
Indirect InvestmentsInvestmentIncome-CapitalGains 1,045,290.47Total Indirect Investments 1,045,290.47
Total Operating Income 1,328,744.41
Other Income and Expenses
Misc. Income CHFInterestRevenue 294,221.19IncomefromFinancialInvestments 105,945.16Total Misc. Income 400,166.35
Finance CostsMortgageInterest (460,835.96)OtherInterestPayable (76,297.14)Total Finance Costs (537,133.10)
Misc. Expenses and CostsLegalandConsultancyCosts (757,842.89)AuditingCosts (172,970.63)Total Misc. Expenses and Costs (930,813.52)
Administrative CostsPaymentstoAdministrativeAssets (200,000.00)PaymentstoDepositaryBank (10,425.21)PaymentstoAdministrativeBodies (1,280,280.67)AcquisitionExpenses (262,454.60)OtherAdministrativeCosts (43,040.00)Total Administrative Costs (1,796,200.48)
Income and Expenses from Share TransactionsCommissionforUnderwritingShares 636,500.00PurchaseintheCurrentIncome (2,982,945.95)PaymentforShareBuybacks 0.00Total Income and Expenses from Share Transactions (2,346,445.95)
Fiscal Year’s Net Income (3,881,682.29)
RealizedCapitalandCurrencyProfit 215,364.79RealizedNetIncome/Loss (3,666,317.50)Non-RealizedCapitalandCurrencyProfit 10,401,405.76ChangesintheCurrencyDifferencefromConsolidation 400,523.33
Overall Performance this Fiscal Year 7,135,611.59
Shares
FiscalYear’sNetIncome (3,881,682.29)SharesIssuedperKeyDate(Units) 871,552NetProfitoftheFiscalYearperShare (4.45)
Special Assets
�2 AFIAA Annual Report 2004/2005
Changes in Net Assetsin CHFAssets at the Beginning of the Fiscal Year 0.00
UnderwrittenShares 97,022,781.52RecalledShares 0.00FiscalYear’sOverallPerformance 7,135,611.59NetIncome/Loss (3,881,682.29)RealizedCapitalandCurrencyProfit 215,364.79UnrealizedCapitalandCurrencyProfit 10,401,405.76ChangesintheCurrencyDifferencefromConsolidation 400,523.33
ChangesinEstimatedLiquidationTax (4,065,219.27)EstimatedLiquidationTax(Assets) 1,886,985.24EstimatedLiquidationTax(Liabilities) (5,952,204.51)PaidLiquidationTax 0.00
Net Assets as of 9/30/05 100,093,173.84
Request for Use of Income/ProfitRequest to the General Assembly
in CHFFiscalYear’sNetIncome (3,881,682.29)TobeDistributedtoSpecifiedCapitalGains 0.00PriorYear’sRetainedEarnings 0.00
Amount Available for Distribution (3,881,682.29)Amount to be Distributed 0.00
BalanceCarriedForwardtoNewAccount (3,881,682.29)
Special Assets
AFIAA Annual Report 2004/2005 ��
Administrative Account of the AFIAA Investment Foundation
Balance as of 9/�0/05Assets
in CHFSharesfromSpecialAssets 11,750.25FormationandOrganizationalCosts 165,690.91Total Assets 177,441.16
Liabilities
in CHFLiability-Prepaid/DeferredItems 55,736.67CoreAssets 100,000.00FiscalYear’sNetProfit 21,704.49Total Liabilities 177,441.16
Income Statement from �/12/04 to 9/�0/05Income
in CHFContributionsfromSpecialAssets 200,000.00Total Income 200,000.00
Expense
in CHFOrganizationalStructures,GeneralAssembly 57,433.77Auditing 5,000.00OperatingExpenses 74,439.00Amortization/Depreciation 41,422.74Total Expense 178,295.51
Fiscal Year’s Net Profit 21,704.49
Request to the General Assembly
in CHFPrior Year’s Retained Earnings 0.00NetIncome-FiscalYear2004/2005 21,704.49AllocationtoReserveFunds (20,000.00)
Profit Carried Forward to New Account 1,704.49
TheFoundationBoardrecommendstothe
InvestmentCommitteethat20,000.00CHFofthe
2004/2005FiscalYear’sNetProfitof21,704.49CHF,
shouldbeallocatedtotheGeneralReserve.Theyrec-
ommendthattheremaining1,704.49CHFbecarried
forwardtothenewaccount.
Special Assets
Request for Use of Income/Profit
Appendix
�� AFIAA Annual Report 2004/2005
Information concerning the Financial Statements and Annual Report
Country Company Headquarters InvestmentSwitzerland AFIAAEuropeHoldingAG Zurich 100% AFIAASchweizGmbH Zurich 100%Germany AFIAADeutschlandGmbH Munich 100% AFIAADeutscheHoldingGmbH Munich 100% AFIAACampusGmbH Munich 100% AFIAADock13-SpeicherGmbH Munich 100% AFIAADock13-VillaGmbH Munich 100%France AFIAA46LauristonSAS Gagny(Paris) 100%USA AFIAAU.S.RealEstate,Inc. NewYork 100% AFIAA156WilliamStreet,LLC NewYork 100% AFIAA156WilliamStreetSPE,LLC NewYork 100%
Appendix
2. Consolidated Principles 2.1 Consolidation Method
Theearningsofthecompaniesareconsolidatedac-
cordingtotheprinciplesofthepurchasemethod.
2.2 Consolidated Entity
Thefollowingcompaniesareapartofthe
ConsolidatedEntityoftheAFIAAInvestment
Foundation:
1.� Principles and Organization of Asset Investments
Asheadoftheorganizationalstructure,the
FoundationBoardestablishesthestrategicdirection
oftheFoundationandmonitorscompliancewiththe
investmentprinciples.Theindividualinvestmentde-
cisionsaremadebytheInvestmentCommitteeatthe
requestoftheInvestmentOffice.Themanagingof-
ficerthatwasappointedbytheFoundationBoardis
responsibleforimplementingguidelinesandinvest-
mentdecisions.Thegoalofthechoseninvestment
strategyistodevelophighlydiversifiedportfolios
accordingtouseandgeographyinsuchawaythat
steadyrevenueandcapitalgainsaregenerated.
1. Fundamentals1.1 Business Structure
Duringthecourseofstart-upactivities,theAFIAA
InvestmentFoundationalsohasestablishedlocal
branchofficesinNewYorkandMunich,inaddi-
tiontohavingtheirheadquarterslocatedinZurich.
AFIAA’sincreasedlocalpresenceintheinvestment
marketsoftheUSandGermanythatareimportantto
ushasproventobeverysuccessful.AFIAA’scom-
panyinvestmentsareopenlydiscussedinNo.2.2.
1.2 Financial Statements
Financialstatementsarepreparedaccordingtole-
galregulationsaswellasaccordingtotherequire-
mentsoftheSwissFederalOfficeforSocialSecurity
[BundesamtfürSozialversicherung(BSV)].Incon-
nectionwiththeconsolidatedannualreport,wemake
referencetothefollowingremarks.
AFIAAInvestmentFoundationispresentinga
2004/2005FiscalYearthatislongerthan12months.
ThisfiscalyearbeganonAugust12,2004,withthe
foundationoftheFoundationforInternationalReal
EstateInvestments.
AFIAA Annual Report 2004/2005 ��
2.� Foreign Currency Transactions
InadditiontobeingactiveinSwitzerland,the
AFIAAInvestmentFoundationisalsocurrentlyac-
tiveinGermanyandtheUS.Exchangeratefluc-
tuationsagainsttheSwissfrancinfluencedthose
assetinvestmentsandotherfinancialholdingsofthe
AFIAAInvestmentFoundationwhichwererepre-
sentedinSwissfrancs.
Transactions with Subsidiaries
FortheConsolidatedAssetAccounts,theassetsand
liabilitiesoftheforeignsubsidiarieswereconverted
intoSwissfrancsaccordingtotheaverageexchange
rateonthekeydateofthebalancesheet.TheIncome
StatementItemsareconvertedaccordingtotheaver-
ageexchangerateofthereportingperiod.
Other Foreign Currency Transactions
Monetarybalancesheetitemsinforeigncurrencyare
convertedaccordingtotheaverageexchangerateon
thekeydateofthebalancesheet.Conversiondiffer-
encesthatresultfromtheforeigncurrencytransac-
tionsarenotposted;however,theyareeffectively
enteredviatherealized/unrealizedcapitalgain/loss.
Hedging the Exchange Rate Risk
Exchangerateriskisnothedgedwithrespecttothe
SpecialAssets.
Currency Exchange Rates
Weconsiderthedepositarybank’sexchangerates
onthekeydatetobethestandardforourcurrency
conversions.
Currency ISO Code Amount Key Date Exchange Rate Average Exchange Rate 30.09.2005 10/1/04 - 9/30/05 CHF CHFUSDollar USD 1 1.2946 1.21604Euro EUR 1 1.5560 1.54483
�. Essential Valuation and Accounting Principles �.1 Valuation of Direct and Indirect Investments (Method of Estimation)
Theinvestmentsarevaluedatfairmarketvalue.The
valuationisdonewiththemethodofestimationthat
bestsuitsthepropertyaccordingtotheprinciplesof
IAS40.Thevaluationisperformedbylocal,impar-
tialexpertsandauditedbytheaccreditedAFIAA-
Appraisers.
�.2 Accounting for Indirect Investments
Accountingforindirectinvestmentsisdoneonthe
basisofquarterlyandannualreportsaccordingto
informationreceivedfromtheFund’sAdministration.
Therespective(lastascertained)NetAssetValue
istakenintoaccountwhenfiguringthefairmarket
value.
Appendix
�.� Accounting for Mortgages
Thevalueoftheborrower’snotesthathavebeen
pledgedtosecureourownliabilitiesamountsto
76,511,800CHF.Theaccountingformortgagesis
donebasedontheequivalentvalueoftheheldre-
source.Themortgagesareallheldintherespective
investmentcurrencyasrealsecuredloans.Theyare
long-termandmatchedwiththecorrespondingin-
vestmentproperty;however,theydodifferininterest
ratestructure.
�� AFIAA Annual Report 2004/2005
�.4. Liquidation Taxes
Thecurrentincomeandcapitaltaxesaredetermined
bywayoftheindividualsubsidiary’slocallydeclared
businessreportsforthatreportingyear.Theprovision
forcurrenttaxesiscalculatedaccordingtotheeffec-
tivetaxrateonthebalancesheet’skeydate.
Thosesubsidiarieswhichholdpropertiesneedto
makeallowanceforwhenthereisapositivediffer-
encebetweenthetaxvalueandgroupvalueasare-
sultofdeferredtaxliabilitiesonthebalancesheet’s
keydate(Liability-Method).Thedeferredtaxesfor
propertiesarestrictlycalculatedbasedontheeffec-
tivetaxrateonthekeydateofthebalancesheetand
inaccordancewiththerespectivetaxsystemforthe
property.Thecompaniesholdingthepropertieswill
beevaluatedwithrespecttothedeferredtaxliabili-
tiesonthebasisofthetaxramificationsthatresult
III - Mortgages
Country City Address Currency Book Value Book Value Maturity FX CHF USA NewYork 156WilliamStreet USD 21,000,000 27,186,600 4/8/2015D Munich Georg-Brauchle-Ring52-54 EUR 19,200,000 29,875,200 6/30/2012 Düsseldorf Speditionsstrasse13 EUR 9,930,000 15,451,080 9/30/2010 Roll-Over Düsseldorf Speditionsstrasse13a EUR 2,570,000 3,998,920 9/30/2010 Roll-OverTotal 76,511,800
FX:AbbreviationforForeignExchange,(Exchangeofforeigncurrency).
4. RemarksThefollowingremarksrefertothecorrespondingly
labeledSpecialAssetaccountitems.
I - Indirect Investments
Theindirectrealestateinvestmentsinvolvepar-
ticipationinnon-listedrealestatefunds.AFIAA’s
capitalcommitmenttoafundreflectstheamount
alreadyinvestedandtheamountstilltobeinvested.
Dependingonthefund’sprovisions,thetermmight
beextendedbyaspecifiedperiodoftime.
Appendix
II - Direct Investments
AFIAAhas100%ownershipofthelocalproperty
managementcompanieswhichholdthedirectinvest-
ments.Thesestructuralmeasuresservethepurpose
ofminimizingtheriskintermsofnon-recourse
structures.
fromthesaleoftheproperty(evenwhenitwouldbe
possibletosellthecompany’sshare).Negativevalu-
ationdifferencesareenteredasdeferredtaxcredits,
solongastheycanbetaxablyoffsetagainstassets.
Deferredtaxcreditsfromthebalanceoftaxlosscar-
riedforwardonthekeydateofthebalancesheetare
enteredsolongastheycanbeoffsetwithexpected
earningsthatappeartobesecure.
Transfertaxesareonlyincludedintheliquidation
taxeswhenthesellerincursthesecostshimself(ei-
therwholeorinpart)whenthepropertyissold.
AFIAA Annual Report 2004/2005 �9
IV - Obligations to Investors
AFIAAobligationstotheinvestorsincludethefunds
alreadycalledwhichhavenotyetbeenconverted
intosharesaswellasthebalanceoftherespective
investmentaccountsbecausethecapitalwillberetro-
spectivelyconvertedintoshares.
Liabilities: Direct InvestmentsCountry City Address Strategy Use Currency CHFF Paris 46RueLauriston Core Office EURCA Calgary 110CountryHills Core Office CADUSA Philadelphia 1401ArchStreet Core Office USDTotal Liabilities: Direct Investments 60,894,000
Liabilities: Indirect InvestmentsCountry Fund Strategy Use Currency CHFUSA BroadwayPartners CorePlus Office USD AIGU.S.Residential Opportunity Office/Residential USDEU HinesHEVAF ValueAdded Office EURTotal Liabilities: Indirect Investments 74,543,000
CHFEstimatedLiquidationTaxes-BeginningofFiscalYear 0.00AssetLiquidationTaxes-EndofFiscalYear 1,886,985.24LiabilityLiquidationTaxes-EndofFiscalYear (5,952,204.51)ChangeinEstimatedLiquidationTax (4,065,219.27)
CHFCapitalCallNo.5from7/28/05 21,420,000.00CapitalCallNo.6from9/1/05 9,480,000.00InvestorCreditBalancefromConversions 164.43Total Obligations 30,900,164.43
V - Deferred Taxes
Theprovisionsofdeferredliquidationtaxesarecal-
culatedaccordingthedescriptiongiveninNo.3.4
andaredeterminedyearlyonthepropertylevelby
thelocaltaxexperts.
5. Open LiabilitiesAsof9/30/05,thefollowingopenliabilitiessuch
asthosefromnewly-begunconstructionorother
projectsaswellascapitalcommitmentsforindirect
investmentshavenotbeenenteredinthebalance
sheet:
Appendix
40 AFIAA Annual Report 2004/2005
�. Determination of the share’s market valueTheshare’smarketvaluewillbedeterminedonthe
basisofannualvaluationsfordirectinvestmentsand
onthebasisofquarterlyfinancialreportsforindirect
investments.Thesefinancialreportsarepreparedand
deliveredbythemanagersoftherelevantindirectin-
vestmentswithin90daysaftertheendofeachquar-
ter.Therefore,thedefinitiveshare’smarketvalueis
actuallydeterminedretroactively.
�. Deviation from Requirements of the Swiss Regulatory AuthoritySinceitsestablishmentonAugust12,2004,the
AFIAAInvestmentFoundationhasbeengradu-
allybuildingtheinvestmentportfolio.Duringthis
start-upphase,wearetemporarilyunabletomeetthe
requirementsforinvestmentfoundationsissuedby
theSwissregulatoryauthorityBSV[SwissSocial
SecurityAgency]concerningthenumberofinvest-
mentsandtheinvestmentamountperproperty.
Atthetimeofthisreport,theaverageindebtedness
ofalldirectinvestmentsisabout55%,whichismore
thanthe50%thatisallowedbytheBSVforafive
yeartransitionalperiod.
WehavesubmittedAFIAA’sinvestmentguidelines
totheBSV.TheFoundationBoardwillformallygive
theirauthorizationafterwehavereceivedtheBSV’s
finalstatement.
�. Translations of the Business Report Thisbusinessreportwasoriginallywrittenin
GermanandlaterwastranslatedintoFrenchand
English.TheoriginalGermanversionistheonlyle-
gallybindingversion.Thisoriginalversionhasbeen
verifiedbytheauditingfirm.
Appendix
AFIAA Annual Report 2004/2005 4�
AstheauditingfirmoftheAFIAAFoundationfor
InternationalRealEstateInvestments,weverify
thatthefollowinginformationislegallyvalidand
correctforthetimeperiodfromAugust12,2004to
September30,2005,whichwasAFIAA’sfirstfis-
calyear:AFIAAannualreport(CapitalAccount
andProfit/LossAccountoftheSpecialAssets,
AdministrativeAccountandExplanatoryNotes,see
pages30-40),managementandassetinvestments.
TheFoundationBoardisresponsiblefortheannual
report,managementresponsibilities,andinvest-
ments,whileweareresponsibleforverifyingand
assessingthem.Weconfirmthatwefulfillalllegal
requirementsconcerningabilityandimpartiality.
Ourauditwasperformedinaccordancewiththe
Swissprofessionalguidelineswhichstatethatan
auditshouldbeplannedandperformedinsucha
mannerthatsignificantmistakesintheannualreport
canbeeasilyidentifiedwithduediligence.Wehave
examinedtheannualreport’sitemsandentriesby
analyzingandevaluatingbasedonrandomsampling.
Furthermore,weassessedhowtherelevantaccount-
ing,financialstatement,andassetinvestmentguide-
lineswereapplied,aswellastheoverallpresentation
oftheannualreport.Whenweexaminethemanage-
ment,wedeterminewhethertheyperformtheirdu-
tiespursuanttothelegalrequirementsoftheorgani-
zation,administration,andtheacquisitionandreturn
ofshares.Webelievethatourexaminationoffersus
anappropriatebasisforourassessmentresults.
Appendix
AswasalsomentionedinNo.7intheexplanatory
notessectionoftheannualreport,theFoundation
Boardhasnotyetofficiallyauthorizedinvest-
mentregulationsfortheAFIAAFoundationfor
InternationalRealEstateInvestments.Atthesame
time,thecompanydoesnotcomplywiththeregula-
toryauthority’srequirementsconcerningthediversi-
ficationofinvestmentsandborrowing.
Accordingtoourassessment,AFIAA’sannualreport,
managementpractices,andassetinvestmentsarein
accordancewithSwisslawandregulatoryauthority
requirements,exceptinthoseinstancesmentionedin
thepreviousparagraph.
Werecommendthattheinvestorsauthorizethisan-
nualreportdespitethereservationsindicated,since
thoseviolationsareonlytemporaryinnature
(resultingfromthestart-upperiod)andbecausethe
FoundationBoardhasalreadyinitiatedtheappropri-
atemeasures.
Zurich,December12,2005
Ernst&YoungAG
ThomasHuwyler DanielZaugg
dipl.Independent dipl.Independent
Auditor Auditor
(ChiefAuditor)
Report of the Auditing Firm
44 AFIAA Annual Report 2004/2005
Glossary
Non-listed real estate investments
Thesearedirectlyorindirectlyheldinvestmentsthat
arenottradedonastockexchange.Thevalueof
theseinvestmentsisdeterminedbyexpertsapply-
ingrealestateassessmentmethodsorbytheactual
transactions.
Listed real estate investments
Theseareindirectlyheldinvestmentsthataretraded
onastockexchange.Theirvaluecanbedetermined
onadailybasis.Marketcapitalizationisveryun-
stablehereandsubjecttoinfluencesthatarenotrel-
evanttorealestate.
Direct Investments
Asasourceofincome,therealestateislegallycon-
sideredtobethepropertyoftheinvestor.Theinves-
torhasunlimitedaccesstohisrealestateandits
yields.Therefore,theinvestorisresponsibleforits
management.Inajointventure,twoormoreco-in-
vestorscanshareindirectinvestments.1
Investment Strategy: Core/Core Plus
Core
Here,existingbuildingsareacquiredwiththegoal
ofholdingthemonalong-termbasisandgenerating
astablecurrentincome.Theappreciationinvalueis
usuallysmall.
Features:Propertiesingoodlocationsandofgood
quality,tenantswithgoodcredithistories,lowmain-
tenancecosts,stableincome,investmentqualityav-
eragetoveryhigh,rateofreturnandrisk:moderate
tolow.Holdingperiodover5years.
Core Plus
SimilartoCore,buthigherpotentialfor
appreciation(e.g.needrenovation).
Features:SimilartoCore,exceptriskandrateof
returnalittleaboveCore.
Investment Strategy: Value Added
Existingbuildingswithanaveragepotentialtoap-
preciateinvalueareacquired,upgradedviaactive
management,andthensoldtorealizeaprofit.After
anappreciationinvaluehasbeenachieved,these
buildingscanremainpartoftheportfolioasCore
Investments.Theholdingperiodisusuallyseveral
years.Revenueistheresultofongoingprofitdistri-
butionandappreciationinvalue.
Features:Locationswithdevelopmentpotential,
valueappreciationbymeansofprojectdevelopment
andchangeinmanagement,certainriskofvacancy,
andvariableincome.Investmentqualityaverageto
high,rateofreturnandrisk:averagetohigher,hold-
ingperiodunder10years.
Investment Strategy: Opportunity
ComparabletoValueAdded,exceptwithhigher
riskandhigherexpectedprofit.Theholdingperiod
isusuallyshort.Thegoalistosellthepropertyaf-
terconstructionorafteranappreciationinvalue.
Revenueismainlytheresultofvalueappreciation.
Features:Newmarketareas,difficultneighbor-
hoods,e.g.dilapidatedbuildings,largeapprecia-
tioninvalue(location/building),higherrevenue.
Investmentqualityaverage,riskandrateofreturn:
high/higher,variableholdingperiod.
1Inthisinstance,“Investor”referstotheInvestmentFoundationandnottotheindividualinvestorswhoinvestbywayoftheInvestmentFoundation.
Appendix
4� AFIAA Annual Report 2004/2005
Credits
Photos: ElianeRutishauser,Zurich
Design: sapparidesign/development
OliverWalkhoff,Zurich
Translation: transculturasprachenservice
ElkeTrautwein,Nürnberg
Production: DruckereiOdermattAG,Dallenwil
January2006
Address and Bank Information
Appendix
Investment Foundation Headquarters
AFIAA
Stockerstrasse60
CH-8002Zurich-Switzerland
Tel +41442454944
Fax +41442454949
www.afiaa.com
Bank Information
BankSarasin&CieAG,Zürich
Professional MembershipsTheAFIAAInvestmentFoundationisamemberof
thefollowingprofessionalassociations:
• INREV(Investorsinnon-listedRealEstate
Vehicles)
• INREV IP(InvestorsPlatform)
Amsterdam,NL
www.inrev.org
46 AFIAA Annual Report 2004/2005
AFIAAStockerstrasse 60CH - 8002 Zurich - Switzerland
Tel +41 44 245 4944Fax +41 44 245 4949
