Real Estate Demand in the Swiss office market continues to fall
More and more offices are standing empty in Switzerland's major cities. Despite this, more offices are likely to be built in the future than in 2024.
07.01.2025, 17:19
SDA
The supply of available office space in Switzerland's five largest office markets - Zurich, Geneva, Bern, Basel and Lausanne - will have increased by 9 percent in 2024 compared to the previous year. This is according to a study published on Tuesday by real estate consultants Jones Lang LaSalle AG (JLL).
This means that the average supply ratio has risen continuously since 2019, when home offices were only just emerging. From 4.1 percent to 5 percent by the end of 2024.
From an international perspective, however, the increase in available office space in Switzerland is comparatively low. In the same period, the average vacancy rate in 24 European cities rose by 3.3 percentage points to 8.5 percent.
The supply of vacant office space in Switzerland has therefore increased by 231,000 square meters since 2020. At the same time, 1.16 million square meters of new office space were created in Switzerland between 2020 and 2024.
New construction activity on the rise
Construction activity in the Swiss office market peaked in 2020 and has been declining since then. The JLL experts expect more office space to be built in Swiss cities again between 2025 and 2027 than in 2024. The office stock is expected to grow by an average of 1.0 percent per year until 2027.
There are major regional differences. Significantly more office space is to be created in Geneva and Bern in particular. In contrast, less will probably be built in Zurich and Basel by 2027 than in previous years.
Modern, flexible and sustainability-compliant offices with good connections remain popular. According to the experts, this does not reflect the limited supply in these locations. Older buildings without a train station within walking distance are difficult to let.
Favorable prospects
Overall, the authors of the study rate the demand for space as "intact". Investors are still cautious because more flexible workplace concepts bring with them uncertainties with regard to future space requirements. However, the robust economic and employment growth in Switzerland continues to support demand.
According to Jan Eckert, Head of Switzerland and Capital Markets Lead DACH by JLL, many market players are confident about the coming months, partly due to the low interest rate environment. "We are noticing this trend in both the quantity and quality of incoming bids. The short-term prospects are more favorable than they have been for three years."
