Office market: vacancies on the rise
Office vacancies in major Swiss cities rose last year, according to JLL's new office market study. The supply of available office space in Zurich, Geneva, Bern, Lausanne and Basel grew by around four percent to 706,000 sqm - the highest vacancy rates in over ten years.
Vacancies rose most sharply in the Bern region: In and around the capital, the supply of office space increased by a good quarter to around 63,000 sqm. Nevertheless, at 2.2 percent, supply is still low in relation to the estimated total stock. However, JLL expects vacancy rates to rise in the coming years due to new construction and relocations.
In Zurich, by far the largest office market, the space on offer rose slightly by two percent to 398,000 sqm. The supply ratio amounted to 5.2 percent of the total stock of office space. In the city center, vacancies had passed their peak with a decline of 7.3 percent, according to JLL.
According to JLL, the Geneva office market is in a cyclical cooling phase. Offered space rose by 7.2 percent last year to 170,000 sqm, corresponding to a supply ratio of 5.1 percent. At the same time, prime rents fell by 5.4 percent to CHF 875/sqm/year.
Basel is the only city in which the office vacancy rate declined last year. The supply of available office space shrank by almost 13 percent to 41,000 sqm. The supply ratio fell to below two percent. In particular, modern space of more than 1,000 sqm in central locations is currently hardly on offer.
Offered office space in the city of Lausanne and the adjacent central business district increased by around 1.9 percent to 35,100 sqm in the first ten months of 2015. Nevertheless, the Lausanne office market remains a tight market with a supply ratio of less than two percent.
According to JLL, the increase in office vacancies observed in Switzerland in recent years is not a cyclical phenomenon. Office vacancies are likely to remain elevated in the medium term, particularly in Zurich and Geneva. JLL therefore sees a sustained paradigm shift from a tight and constricted office market to an open and expansive office market. (ah)
