Switzerland Office Market 2022
JLL‘s comprehensive research report on the Swiss office market.
In Switzerland's five largest office markets – Zurich, Geneva, Bern, Basel and Lausanne – the availability rate of office space augmented from 4.3% to 4.7% within twelve months. As a result, a total of 912,000 m2 of office space has been available for prospective tenants at the end of 2021 (+101,400 m2).
Although demand for space recovered after the crisis year of 2020, this increase in supply was to be expected: 313,000 m2 of new office space was completed in the five largest markets last year, after around 573,000 m2 had already been built in 2019 and 2020. By 2024, completions will be 29% lower on average. It can therefore be assumed that the growth of the availability rate will slow down and stabilise.
Across the regions, rent levels in prime locations have held steady or even risen slightly – this is also due to the continuing high demand for offices in central locations. Availability rates in these submarkets are correspondingly low: 2.1% in Zurich's district 1, 3.2% in Geneva's CBD, 0.7% in Berne's city-centre, 1.1% in Lausanne's CBD and 3.5% in Basel's city-centre.
The demand for office space experienced a significant recovery during the last year, although the pre-crisis level hasn't been achieved. Investor appetite for opportunities remained insatiable. We registered a significant increase in sale-and-lease-back transactions. For core properties, we did not only receive many but also very competitive offers. It's not a surprise that prime yields continued to decrease in 2021, for Geneva to 2.3%, in Zurich to 1.7%.
Real estate assets in Switzerland once again didn’t lose any allure in 2021. The transaction market was lively, and core properties were as sought after as ever. Although certain concerns exist about inflation and interest-rate trends, many institutional investors have high equity ratios. There appears to be a certain degree of stress resistance at least among this weighty class of investors, and the parameters indicate that the Swiss real estate market would be able to weather even an unexpected onset of stormier times.