Switzerland’s commercial property market continued to cool off in 2014 as total returns fell for the third consecutive year.
Switzerland’s commercial property market continued to cool off in 2014 as total returns fell for the third consecutive year.
Latest figures from MSCI showed the total index figure was down from 6.0% in 2013 to 5.3% last year, mainly due to diminishing capital value growth of 1.0%.
Office returns fell to 4.2%, their lowest level since MSCI began compiling the IPD Annual Property Index in 1995, with negative rental value growth of minus 0.6%. Office, industrial and other properties all saw capital values fall.
One bright spot was the residential sector, which showed a total return of 6.1% and capital growth of 1.8%, above the 10-year average.
Justus Vollrath, executive director of MSCI, said: ‘We continued to see high levels of demand for residential property from institutional investors and as a result, the sector continued to outperform the index as it has done over recent years.
‘However, these figures show that the index has fallen for the third consecutive year, which illustrates that appetite for investment in other sectors is not as strong.’
The IPD/Wüest & Partner Switzerland Annual Property Index tracks the performance of 4,417 property investments with a total capital value of CHF 90.3 bn (€85.7 bn).
