In Berne and Zurich
Some prime office rents have risen
The market for Swiss office properties is still intact and liquid. This is the conclusion reached by the experts at real estate consultants JLL. Top rents have risen particularly in Zurich and Bern.
The market for Swiss office properties is still intact and liquid. Top rents have risen particularly in Zurich and Bern. (icon picture)
According to a study published on Wednesday, many actors are currently familiarizing themselves with the new framework conditions. With the foreseeable end of interest rate increases, the orientation phase of many investors could also end and more capital could return to the real estate asset class. However, without demonstrable investments, rent increases or cost reductions, increases in value as in the past can hardly be justified in the future.
Despite the rise in interest rates, real interest rates are still negative due to current inflation. Therefore, according to JLL, real values such as real estate remain attractive. Properties with long-term, fully indexed leases and renewable energy sources are currently among the most sought-after investments.
The market in the various regions shows some significant differences in terms of scarcity, construction activity, vacancies and prime rents. In the Zurich region, for example, top rents climbed by 6 percent to CHF 925 per square meter last year. At the same time, the available space fell by 13 percent.
In the current year, a below-average 71,000 square meters of new office space will be completed, and in the coming years 2024 and 2025 the volume of new construction should be even lower. Therefore, according to the experts, a persistently low vacancy rate and constant top rents can be expected.
In Bern, too, top rents increased in 2022, by an even more significant 15 percent to CHF 450 per square meter – despite a 13 percent increase in available space. Little change is to be expected for the market before the end of 2024, after which various completions could lead to higher vacancies.
Meanwhile, the supply of space in Geneva fell slightly by 2 percent, while top rents remained stable at CHF 850 per square meter. Vacancies increased, particularly in the airport region.
In Basel, the vacancy rate in the city center has meanwhile doubled, the supply of available office space has increased noticeably with constant top rents. However, since significantly less new space would be completed in 2024 and 2025, the office vacancy rate should gradually decrease.