Increase in vacancy rates on the Swiss office market
The Swiss office market recorded a decline in demand last year, particularly in the peripheral locations of the major cities. The vacancy rate has risen to a record high, according to the latest data from property service provider CBRE.
The latest surveys by CBRE show that the available office space in Switzerland grew to 1.82 million square metres in the third quarter of 2023, which corresponds to 3.8 percent of the total stock. The peripheral office markets, which are located away from the five largest office locations – Zurich, Geneva, Basel, Bern and Lausanne – are particularly affected. There has been a significant increase in available space here, with the region around Zurich Airport and the Limmat Valley, for example, achieving an availability rate of 13.3 per cent.
Meanwhile, demand for office space in central locations remains high. Tenants are increasingly focussing on aspects such as good accessibility, sustainability and high-quality fit-out by the landlord. The availability of office space in Zurich’s city centre fell to 2.7 percent in the same quarter, and even to 2.0 percent in Zurich’s CBD.
The decline in overall demand is influenced by various factors. On the one hand, the increased supply of office space has outstripped construction activity and thus the completion of new projects. On the other hand, the cooling economic situation has led to a fall in demand. This trend has so far been masked by strong economic growth and high take-up of space, which has offset the increase in home office activity. However, the subdued demand is now making itself felt in the form of higher vacancy rates, which represents a challenge for property management.