Investors' capital allocation into office and residential markets in ...

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of total office and retail portfolio located in Oslo, Helsinki and Stockholm), Norwegian retail company Steen and Ström (owner of 30 shopping centres in Norway, Sweden with nine shopping centres out of 30, and Denmark) was sold at EUR 2.7 billion, acquisition of a part of the Vasakronan portfolio and one additional property by NIAM at approximately EUR 750 million (Newsec Report 2008, see the Table 7.3, Table 7.4 below and full data of transactions made in 2007 in Appendix II). Table 7.3 Table 7.4 (Source: Newsec Report, sited in ISA report, 2007/8) (Source: DTZ, sited in ISA report, 2007/8) 30
Chapter 8 Investments in office and residential markets in Switzerland Since a few years ago Swiss market has been having over supply but in 2007 the volume of transactions increased due to the numerous significant transactions. Recently, the interest from foreign investors in Swiss investment market has increased. Interest rates drive the present Real Estate Market. Pricing pressures on the building industry from China and India caused the increase in construction costs as well as in construction projects. Foreign companies were allowed to buy commercial properties in Switzerland since 1997. However, only a few years ago foreign investors started to enter the Swiss commercial property market. Swiss low interest rates caused low yields, primary waterfront buildings have 4 per cent yield and secondary yields are fluctuating within 5 per cent to 7.5 per cent (Global Market Report, Switzerland, NAI Global, 2008). Moreover, yields depend on tenant mix and the standard of the building. As for the Swiss office rental market, it has increased within the main cities. There is an upward trend in financial sector in Geneva while Zurich is considered to be the largest commercial centre in Switzerland. There are also changes in other cities as Lausanne, Basel, Lugano and Berne. After the period of over supply 2000–2006 in Zurich the market has recovered and the investors got the income growth during 2007. Prime office rents in Geneva are CHF 1,000/sq.m. per annum while in Zurich they are only CHF 850/sq.m. per annum in Zurich’s prime location along Bahnhofstrasse. As for the secondary areas in Zurich the prices went down dramatically to CHF 500–600/sq.m. per annum (Global Market Report, Switzerland, NAI Global, 2008). In Table 8.1 there is a data on main foreign investors and the volume of their investments in Switzerland. Table 8.1 Foreign Direct investment in Switzerland-by country Country 2005 2006 2007 Germany 768 1,074 15,387 Netherlands 9,102 15,780 13,154 Austria 9,826 2,534 5,083 Luxemburg - 3,409 2,911 France 2,158 13,886 2,677 United States - 3,980 3,219 (SNB, September 2008) The performance of Swiss property investment companies such as SWX Immobilienfonds Index (the index of real estate investment funds), SWX Real Estate Index (it contains Switzerland’s real estate investment companies) changed during the last year. Domestic property investment companies and funds used to have an excellent performance until 2007. In 2007, the SWX Immobilienfonds Index had a negative 31
Page 1 and 2: KTH Arkitektur och samhällsbyggnad
Page 3 and 4: The treaty between Switzerland and
Page 5 and 6: Table of Contents CHAPTER 1 .......
Page 7 and 8: 1.2 Aims and objectives The aim of
Page 9 and 10: Chapter 2 Methodology In the paper
Page 11 and 12: expectations rise, making the price
Page 13 and 14: single assets or in a multi/mixed a
Page 15 and 16: In 2007 the transaction volume in t
Page 17 and 18: concluded that the continuation of
Page 19 and 20: Chapter 5 An overview on the proper
Page 21 and 22: Table 5.1.2 Development in Gothenbu
Page 23 and 24: (Global Property Guide, August 2008
Page 25 and 26: in the heart of Geneva CBD area is
Page 27 and 28: However, there has been an increase
Page 29: for the foreign investors in proper
Page 33 and 34: The fall in the prices of Swiss Rea
Page 35 and 36: Total return from the investments i
Page 37 and 38: Credit Suisse The company provides
Page 39 and 40: Fixed income trading revenues were
Page 41 and 42: (Source: FOLKSAM Life Administratio
Page 43 and 44: Foncipars fund invests in residenti
Page 45 and 46: - Separate Accounts: France, Italy,
Page 47 and 48: Chapter 10 Conclusions Real estate
Page 49 and 50: References AMF Pension (2008) http:
Page 51 and 52: Swiss info http://www.swissinfo.org
Page 53 and 54: Real estate in relation to other in
Page 55: Blackstone, office property “Euro

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