 Zürich vacancy June 2003 |
The Office Letting Market in Zurich • Vacancy rose from c. 300,000 m2 in June 2002 to 417,000 m2 by the end of June 2003 in the City (Stadt) • City vacancy represents c. 7.25% of stock • Vacancy in the agglomeration end June 2003 reached 680,000 m2 • Vacancy expected to reach 8-10% over the next two years if demand does not improve |
| source: KREC 2003 | |
 Prime rents June 2003 |
Rental values • Prime rents are now falling as a result of significant increases in vacancy. • Prime rent is now c. CHF 950/ m2 p.a. • Significant development pipeline cast shadow over future rental growth |
| source: KREC 2003 |
Significant buildings available to let
| Address | District | Area available | Asking rent |
| Balsberg | Airport | 20,000 m2 | 300 – 350 m2 p.a. |
| Juchstrasse | Altstetten | 19,100 m2 | 255 – 315 m2 p.a. |
| Obstgartenstrasse | Kloten | 17,700 m2 | 260 – 390 m2 p.a. |
| Glessereistrasse | West End | 15,000 m2 | 300 – 330 m2 p.a. |
| Baslerstrasse | Altstetten | 13,500 m2 | 330 m2 p.a. |
Comment
The urban area of Zürich is suffering high and increasing levels of vacancy as companies reorganise their space requirement to match reduced future expected business volumes. Current vacancy has risen over the last six months from an estimated 300,000 m2 in Zurich Stadt (City administrative area) to 417,000 m2 (approximately 5%) at the end of June. Over the whole agglomeration the vacancy is now at 680,000 m2 . With over half of Switzerland’s office development activity concentrated in the Zurich area over the last 2 years, large amounts of new accommodation has and will continue to flood the market. If take-up continues to slow the vacancy rate could reach between 8 and 10% within the next two years, significantly impacting upon rental growth prospects and investment returns.
© Copyright KREC Limited 2003
It should be noted that the KEY INDICATORS SERIES of briefing notes have been prepared to give clients an indication of market values and activities. They are based on a variety of sources of information, which are believed to be correct and reliable. However, no liability will be accepted by KREC for errors or inaccuracies.