2012 Global Market report - NAI Global

Geneva, Switzerland
Contact
NAI Commercial CRE
+ 41 22 707 44 44
Country Data
Area (Sq Mi)
GDP Growth
GDP 2011 (US$ B)
GDP/Capita (US$)
Inflation Rate
Unemployment Rate
Interest Rate
Population (Millions)
Due to the financial sector, demand for office premises
remained resilient throughout 2011. In general, the economy
is strong with 2.8% unemployment and Q3 2011 inflation at
0.5%. Despite uncertainties within the Eurozone, combined
with the pegging of the Swiss Franc to the Euro by the
SNB, the appreciation of the Swiss Franc may have a
negative impact on the economy during 2012. Nonetheless,
in uncertain times, Switzerland remains a stability refuge
within Europe.
The prime office market has performed well, with strong
take-up within the CBD, notably for waterfront premises.
New-comer hedge funds such as Brevan Howard and
BlueCrest and banks such as Morgan Stanley and Barclays
have relocated to new offices. HSBC and Crédit Agricole are
presently renovating their respective new and existing
waterfront premises. Prime rents have remained buoyant,
with waterfront properties renting for around CHF 1,000 to
1,300/SM per year and higher if exceptional properties. The
lake Geneva area around Nyon and Rolle has continued to
grow, however with 30 major developments, supply is on the
increase and this is likely to have a negative impact in 2012.
Despite this Lloyds bank has announced plans to move their
back offices to Nyon and will join Shire and Craft Foods.
The take-up in the light industrial and warehousing market
has been subdued. Rents remain at CHF120 to 150/SM per
year for production areas and CHF 200 to 375/SM per year
for high tech-office space, depending on the level of build out.
The investment market for landmark buildings has remained
strong with a slightly decreased volume of sales mainly due
to the lack of supply. Net prime yields are currently between
3.75% and 4.0%, and lower for exceptional product.
The retail market has remained stable during 2011. Bally
has relocated from the Rue du Marché to Rue du Rhône and
Moncler has found a niche waterfront location. A large
number of retail units will come on stream in 2012 and
2013 due to important renovations along Rue du Rhône.
Although rents have technically fallen, this was due to
excessive rents being paid by well-known companies
seeking landmark locations at “any price”.
The Geneva office market continues to outpace Zürich at
present and although the future trend for Geneva and the
Lake Geneva region appears good, due to the heavy reliance
on the financial community, there is currently a sense of
uncertainty in the market, pending the more stable settling
of Switzerland’s European neighbors.
Geneva At A Glance
conversion 0.91 cHf = 1 us$ RENT/M 2 /YR US$ RENT/SF/YR
low High low High Vacancy
cItY center offIce
New Construction (AAA)
Class A (Prime)
CHF 900.00
CHF 850.00
CHF 1,300.00
CHF 1,200.00
$
$
91.88
86.78
$
$
132.72
122.51
0.50%
1.30%
Class B (Secondary)
suburban offIce
New Construction (AAA)
Class A (Prime)
Class B (Secondary)
IndustrIal
CHF 600.00
CHF 450.00
CHF 450.00
CHF 300.00
CHF
CHF
CHF
CHF
750.00
600.00
550.00
450.00
$
$
$
$
61.25
45.94
45.94
30.63
$
$
$
$
76.57
61.25
56.15
45.94
5.00%
3.00%
4.00%
6.00%
Bulk Warehouse
Manufacturing
CHF
CHF
70.00
90.00
CHF
CHF
90.00
150.00
$
$
7.15
9.19
$
$
9.19
15.31
0.80%
1.00%
High Tech/R&D
retaIl
CHF 250.00 CHF 360.00 $ 25.52 $ 36.75 3.50%
City Center
CHF 3,250.00 CHF 4,500.00 $ 331.79 $ 459.41 0.30%
Neighborhood Service Centers
Community Power Center (Big Box)
Regional Shopping Centers/Malls
Solus Food Stores
CHF 450.00
N/A
CHF 350.00
N/A
CHF
CHF
500.00
N/A
600.00
N/A
$
$
45.94
N/A
35.73
N/A
$
$
51.05
N/A
61.25
N/A
5.00%
N/A
1.00%
N/A
deVeloPment land low/m 2 High/m 2 low/acre High/acre
Office in CBD
Land in Office Parks
Land in Industrial Parks
Office/Industrial Land - Non-park
Retail/Commercial Land
Residential
15,937
1.8%
$544.07
$69,435.00
0.5%
2.8%
N/A
7.836
CHF 30,000.00 CHF 50,000.00 $ 133,413,055.05 $ 222,355,091.74
CHF 700.00 CHF 1,200.00 $ 3,112,971.28 $ 5,336,522.20
CHF 200.00 CHF 300.00 $ 889,420.37 $ 1,334,130.55
CHF 250.00 CHF 400.00 $ 1,111,775.46 $ 1,778,840.73
CHF 1,000.00 CHF 1,500.00 $ 4,447,101.83 $ 6,670,652.75
N/A N/A N/A N/A
Zürich, Switzerland
Contact
NAI Commercial CRE
+41 44 221 04 04
Country Data
Area (Sq Mi)
GDP Growth
GDP 2011 (US$ B)
GDP/Capita (US$)
Inflation Rate
Unemployment Rate
Interest Rate
Population (Millions)
The Greater Zürich Area (GZA) has seen slow but stable
progress during 2011. Strengthened by unemployment at
2.8% (national) and Q3 2011 inflation at 0.5%, the economic
factors are good despite the strong Swiss Franc. Financial
users are the principle movers, with several large premium
office buildings coming on stream, notably in the west of
Zurich. Zug has continued to see strong demand with
numerous head offices relocating to new developments.
Despite the activity in the new Züriwest area, where there
has been take-up by Deutsche Bank, Citibank, Zürich
Kantonalbank in addition to Ernst and Young and a new
Marriott Hotel, the traditional Bahnhofstrasse prime area has
seen a slight dip in rents and stagnation in vacant premises.
Nonetheless, prime rents remain around CHF 850/SM per
year for well located air-conditioned premises. A number of
on-going office developments in the Zürich area will come
on stream during 2012 and may potentially have a negative
impact on supply and demand. Zug area developments have
seen excellent take up during 2011, with a large number of
already fully pre-let buildings set to come on stream in 2012
and 2013.
Due to continued pressure on the Swiss Franc, despite efforts
by the Swiss National Bank to subdue the situation by forcing
a maintained level, manufacturing, production and warehousing
have been impacted negatively by the Eurozone problems
and the strong Swiss Franc. The situation is currently stable,
however uncertainty persists as to whether this will continue.
Demand has been low in this sector, with an increasing level
of separation or companies seeking alternative solutions.
Investment remains strong due to the short supply of available
investment properties, though an increasing number of sale
and lease backs have been noted. Prime yields are transacting
at rates between 4% and 4.5% for prime properties,
depending on the quality of building and tenant mix.
In the main retail High Street market, there has been little
movement since early 2011. Bahnhofstrasse retailers have
profited and carried out renovations. Shopping centers have
continued their development notably with Zürich airport
attracting an even wider range of high class retailer.
Currently, rental levels for retail are higher than Geneva with
rents in excess of CHF 5,000/SM per year.
Zürich is poised to stay ahead in the market for the first six
months of 2012 despite the economic situation and the
impending issues which will result from the next series of
Eurozone problems.
Zürich At A Glance
conversion 0.91 cHf = 1 us$ RENT/M 2 /YR US$ RENT/SF/YR
low High low High Vacancy
cItY center offIce
New Construction (AAA)
Class A (Prime)
Class B (Secondary)
suburban offIce
New Construction (AAA)
Class A (Prime)
Class B (Secondary)
IndustrIal
CHF
CHF
CHF
CHF
CHF
CHF
750.00 CHF
700.00 CHF
400.00 CHF
350.00 CHF
300.00 CHF
280.00 CHF
900.00
800.00
575.00
480.00
420.00
375.00
$ 76.57
$ 71.46
$ 40.84
$ 35.73
$ 30.63
$ 28.59
$ 91.88
$ 81.67
$ 58.70
$ 49.00
$ 42.88
$ 38.28
N/A
2.00%
4.00%
4.00%
4.00%
5.00%
Bulk Warehouse
CHF 70.00 CHF 90.00 $ 7.15 $ 9.19 1.00%
Manufacturing
CHF 80.00 CHF 150.00 $ 8.17 $ 15.31 1.00%
High Tech/R&D
retaIl
CHF 200.00 CHF 350.00 $ 20.42 $ 35.73 5.00%
City Center
CHF 3,500.00 CHF 5,500.00 $ 357.32 $ 561.50 0.30%
Neighborhood Service Centers
Community Power Center (Big Box)
Regional Shopping Centers/Malls
Solus Food Stores
CHF
CHF
450.00 CHF
N/A
450.00 CHF
N/A
500.00
N/A
800.00
N/A
$ 45.94
N/A
$ 45.94
N/A
$ 51.05
N/A
$ 81.67
N/A
2.00%
N/A
3.00%
N/A
deVeloPment land low/m 2 High/m 2 low/acre High/acre
Office in CBD
Land in Office Parks
Land in Industrial Parks
Office/Industrial Land - Non-park
Retail/Commercial Land
Residential
15,937
1.8%
$544.07
$69,435.00
0.5%
2.8%
N/A
7.836
CHF 30,000.00 CHF 50,000.00 $133,413,055.05 $ 222,355,091.74
CHF 700.00 CHF 1,000.00 $ 3,112,971.28 $ 4,447,101.83
CHF 250.00 CHF 350.00 $ 1,111,775.46 $ 1,556,485.64
CHF 300.00 CHF 500.00 $ 1,334,130.55 $ 2,223,550.92
CHF 1,000.00 CHF 2,000.00 $ 4,447,101.83 $ 8,894,203.67
N/A N/A N/A N/A
2012 Global Market Report n www.naiglobal.com 61