More offices stand empty in Switzerland

Vacant office space in Switzerland's five largest office markets - Zurich, Geneva, Bern, Basel and Lausanne - increased by 9% in 2024 compared to the previous year, Keystone-SDA

More and more offices are standing empty in Switzerland's major cities. Yet the number of new office constructions is likely to increase in the future, a study shows.

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The supply of vacant office space in Switzerland’s five largest office markets – Zurich, Geneva, Bern, Basel and Lausanne – increased by 9% in 2024 compared to the previous year, a study published on Tuesday by real estate consultants Jones Lang LaSalle AG (JLL) shows.

The average supply ratio has risen continuously since 2019, when offices created at home were only just starting to develop.

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%.

The supply of vacant office space in Switzerland has increased by 231,000 square metres since 2020. At the same time, 1.16 million square metres of new office space were created in Switzerland between 2020 and 2024.

New construction activity

Construction activity in the Swiss office market peaked in 2020 and has been declining since then. Yet the JLL experts expect more office space to be built in Swiss cities between 2025 and 2027 than in 2024. Office stock is expected to grow by an average of 1% per year until 2027.

There are major regional differences. Significantly more office space is to be created in Geneva and Bern, while less will probably be built in Zurich and Basel by 2027.

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Modern, flexible and sustainable 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.

Confident market

Overall, the authors of the study say demand for office space remains “intact”. Investors are still cautious because more flexible workplace concepts bring uncertainties with regard to future space requirements. However, the robust economic and employment growth in Switzerland continues to support demand.

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According to Jan Eckert, head of Switzerland and capital markets at JLL, many market actors 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 favourable than they have been for three years,” he said.

Adapted from German by DeepL/sb

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