Office rents drop, apartment rents climb during pandemic

"Office for rent" in Geneva (photo from 2010; don't call the number). Keystone / Salvatore Di Nolfi

Office rents in Switzerland went down by 3.3% in the second quarter of the year, according to an index published on Friday. Residential rents, however, have not been affected by Covid-19.

The biggest change in office space rates were in the most expensive areas: around Lake Geneva, rents went down by 4.7% in April, May and June, while in Zurich, the drop was 3.9%.

The statistics were published on Friday by the Fahrländer research and consultancy group, who write that “although the office space market is robust, uncertainty about how the pandemic and its impact are likely to develop is causing businesses to act cautiously.”

In the first quarter of the year, prices had already dropped for the first time in three years.

On the housing market, however, the situation looks quite different, Fahrländer reports. Here, prices were “unaffected” by the pandemic, and even rose.

Nationwide, the price of rents on newly built apartments went up by 1.4%, while the rent hike on existing flats was 3%. The situation looked similar across all regions of Switzerland.

As a result of the pandemic, which saw many businesses and retailers hit hard, a wide-ranging government aid package was announced which also plans rent relief for struggling commercial tenants. The bill would make such business owners liable for just 40% of the rent amount, with the rest absorbed by the landlord. The bill has been put out to consultation until August 4.