CITY OF ZURICH OFFICE MARKET

DEVELOPMENT OF RENTS CITY OF ZURICH

RENTS BY MARKET AREA

Rental price band
CHF/m² p.a.
Median
CHF/m² p.a.
Available space
Market changes
%
Altstetten 165 - 320 240 33 600 15 %
Enge 280 - 745 450 30 060 36 %
City Centre 400 - 770 550 25 865 -21 %
Industrial quarter 200 - 495 335 3 815 50 %
Oberstrass / Unterstrass 275 - 520 345 8 515 -12 %
Oerlikon 190 - 360 280 45 905 42 %
Seefeld 240 - 680 430 7 995 -51 %
Stauffacher 225 - 565 360 11 230 30 %
Wiedikon / Binz 215 - 390 290 6 275 1 %
Wiedikon / Sihlfeld 150 - 280 260 8 165 9 %
Zurich South 210 - 420 290 13 565 137 %
Zurich West 280 - 480 370 10 245 -41 %
Rest of the city 200 - 605 335 8 905 -40 %
CBD 300 - 745 500 67 915 -14 %
City of Zurich 210 - 630 375 214 140 4 %
Office tenants who can afford it increasingly prefer an attractive city location. If rental budgets remain constant, the amount of space sought will decline in favour of a better location. Although owners of office space in agglomerations struggle with high amounts of excess supply, demand pressure has continued to rise in central locations. This has also resulted in spill-over effects in neighbouring districts, with potential tenants mainly moving to such districts for economic reasons. As a result, prices have climbed and tenants have been pushed to other locations, such as the axis from the city centre towards Altstetten in Zurich West. High demand in the city of Zurich has also manifested itself in the form of rising rents in sought-after locations. These are locations with an urban environment that offer numerous dining, shopping and leisure options. The supply of available office space remained nearly unchanged in the city of Zurich in 2020 compared with the previous year. Following the initial shock-induced paralysis, the pandemic did not affect the long-term attractiveness and appeal of central locations. Furthermore, due to the need for data security and discretion and the importance of personal contact, the financial institutions, law firms, etc. that make up a large share of the sectors in Zurich were only able to reduce their space minimally. Some have even purposely added space – with an eye to future growth, among other reasons.

Although the pandemic caused a lot of uncertainty on the office market in 2020, landlords of office space in the City of Zurich continue to have a number of advantages on their side. The local sector structure has provided a certain amount of stability for the office market. Those who sought the most space in 2020 include the winners of the crisis: IT companies, the healthcare, medical and pharmaceutical sectors, consulting companies and educational institutions. Shared office providers also benefited from a specific Zurich phenomenon: high apartment prices and rent make it difficult for employees to rent or purchase a larger apartment that allows them to work from home. Shared office spaces offer an alternative, meaning they are likely to profit more in future from the new way of working and reduction of office space. As soon as the COVID-19 restrictions are lifted in 2021, greater fluctuation and a lot of movement on the Zurich office market can be expected. On the whole, rental levels should remain largely stable, although there is potential for rent increases in top locations, while districts with excess supply, such as Zurich North, will remain under pressure.