Posts for topic Real Estate Investments Indirect Switzerland

In June, the voters of Zurich will vote on the residential protection initiative. A first-time analysis by Swiss Finance & Property Ltd shows that the well-intentioned proposal may affect real estate investment foundations more than traditional real estate companies – and thus indirectly impact the population’s retirement provision. Why the second pillar is particularly exposed, and what financial consequences could arise, is outlined in the detailed analysis.

The trade conflict initiated by the US and unpredictable tariff announcements are creating considerable uncertainty. This is further exacerbated by countermeasures taken by the countries affected.

Compared to the global or US equity markets (MSCI World Index- 1.4%, S&P 500 -5.1% as at the end of April), Switzerland's property stocks were able to confirm their "safe haven" status.

Swiss indirect real estate investments experienced a strong momentum in 2024, with record fundraisings and market indices reaching all-time highs, driven by SNB rate cuts and investor confidence. Looking ahead to 2025, capital increases, a sector consolidation, and demand for prime residential and logistics assets are expected to shape market dynamics.

8 November 2024 was a day of high volatility in the Swiss indirect real estate market, triggered by UBS's strategic announcement the day before. Following the acquisition of Credit Suisse Funds AG in April 2024, UBS Fund Management (Switzerland) AG, which now manages 14 Swiss real estate funds, presented its plan to merge certain funds for the period from 2025 to 2027.

Launching new investment vehicles is difficult in the current environment. However, good ideas with an attractive business case and an interesting risk/return structure still have good chances.

After many years of constantly falling interest rates and the option to sometimes borrow capital at negative interest rates, rising borrowing costs are now confronting real estate funds with new challenges – and investors with new risks.

The TER has become a much more relevant factor in investment decisions, and it has become much easier to compare the figures for different peers thanks to efforts undertaken by the self-regulating industry associations to bring about standardised definitions and harmonisation. Improvements in efficiency, as reflected by lower TERs, can be largely attributed to the degression of fixed costs such as accounting, marketing, foundation board fees and bank charges.

The Corporate Finance & Banking team of Swiss Finance & Property Ltd ("SFP"), which has been a licensed securities firm for about a year now, assisted EPIC Suisse AG ("EPIC") with its IPO. Despite challenging market conditions, the biggest real estate IPO on the Swiss stock market for eight years was a success thanks to painstaking preparation.

This article looks at figures relating to Zurich's market for office space based on an analysis and evaluation of data from the City of Zurich's Statistics Office.

The transaction market for direct property investment has undergone a surprisingly dynamic recovery in recent months, boosted by a sustained period of low interest rates. What is less surprising is that the compression of initial yields was strongest in the residential sector, followed by the office sector (prime), while the retail sector stagnated year-on-year.