Industry overview

The Swiss real estate market is of primary relevance for the Swiss Prime Site Group and the core real estate business. The most significant influencing factors for the Company include the rental, transactions and capital markets. Other important drivers emanate from the retail trade as well as the demand for real estate asset and property management services.

Rental market

Due to short commuter times, the mobility of the Swiss population recovered extremely quickly after the 2021 spring lockdown compared to Europe. Over the course of the year, office floor space enjoyed brisk use. Increasing space requirements for each employee and more common areas will offset the higher proportion of home workers in the future. This is why the Swiss office market should remain stable. Swiss Prime Site holds retail properties in well-frequented central locations that will continue to enjoy high frequencies and strong demand. Due to the pandemic and low numbers of tourists, however, the situation for gastronomy spaces and Swiss Prime Site’s six city hotels is challenging. Solutions are being sought in close consultation with the tenants. The demand for the urban micro-distribution of goods is likely to increase, creating additional opportunities for Swiss Prime Site. The Company sees great opportunities in urban logistics and is already investing in promising projects.

Transactions market

In recent years, the strong demand for investment properties has resulted in significant increases in the value of existing properties, accompanied by compression of yields on the transactions market. In 2021, yields for prime office properties fell further, while remaining stable for retail properties. The main reason for the continuing high level of transaction readiness lies in national and international monetary policy, which reacted to COVID-19 with a range of measures and base rate reductions. Swiss Prime Site took advantage of the considerable interest in investment properties, achieving profitable sales. The Company also invested in its own real estate development projects that, unlike the embattled transactions market, generate above-average net yields of around 5%.

Real estate asset management

The sale of real estate asset management services remains a structural growth market. The already low interest rate environment should remain at this level for some time due to the central banks continuing their expansive monetary policy. This should further boost demand for innovative, high-yield investment solutions in the real estate sector. Swiss Prime Investment Foundation, whose assets are managed by Swiss Prime Site Solutions, completed a range of capital increases for national and international investments over the past financial year. This enabled the real estate asset manager to significantly expand not only the assets under management, but also the product range and the investor base.

Property management

Successful integrated real estate services providers offer solutions throughout the entire real estate life cycle. Opportunities present themselves for agile property managers who demonstrate a high level of automation and digitalisation. Owner portals and tenant or site apps are part of a modern, attractive product range. Wincasa is working with streamnow to drive these developments forward. At the same time, experiences from the current pandemic show that direct contact, both with property owners and tenants, is crucial to finding individual solutions. This calls for an optimum balance between standardisation and individual solutions, to strengthen trust and ensure sustainable profitability.

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