Pandemic accelerates real estate trends
Rents outside the city centers will continue to fall, private homes will continue to become more expensive and commercial vacancies will rise significantly. According to the CSL Real Estate Market Report 2021, the pandemic is acting as a catalyst in many areas.
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Yonas Mulugeta, CEO of CSL Immobilien , sums up the findings from the current CSL Real Estate Market Report 2021 . According to a corresponding press release, this applies in particular to the office market. The vacancy rate for offices has reached a high: the available supply of commercial space has increased by 23 percent to 2.26 million square meters in the course of the past year. That is the highest value since 2014.
At the same time, however, the demand for central locations in major centers such as Zurich increased. The authors of the report deduce from this that the home office is not the end of the office. Instead, office space would be used more as social meeting and collaboration places. Because "Location factors such as an urban environment with attractive lunch or leisure options or proximity to customers and industry meeting points have become more important as a result of the pandemic".
The vacancy rate in the residential market has also reached a high. In the previous year, the Swiss average rose from 1.66 to 1.72 percent – a value that was last reached in 1988. Outside the major centers, high vacancy rates of over 2 or 3 percent are not uncommon in all of Switzerland. CSL expects vacancies to continue to rise and rents to fall in 2021. Residential property has benefited from the increased value of a beautiful home during the pandemic. Because of the increasing number of homeworkers, real estate in more peripheral locations would have found buyers more easily.
For multi-asset investors in particular, real estate investments have become a replacement for bonds with negative interest rates. Returns in all real estate asset classes continued to decline.
