Further Decrease in Availability Expected in the Entire City

MARKETVIEW SNAPSHOT ZURICH OFFICE, Q2 2019

Zurich Office, Q2 2019 Further decrease in availability expected in the entire city

Figure 1: Availability and median asking rent in the city of Zurich AVAILABILITY MARKET SUMMARY Q4 2018 400 400 While the supply so far has mainly decreased in CITY OF ZURICH 360 specific submarkets such as the Central Business 350 District (CBD) and Zurich West, Q2 2019 showed a 320 300 decline across the entire city area (new 3.2% or 280 .) 242,000 m²). The recovery of the market demand is

242,000 sq m p.a m) 250 not only continuing in the CBD, but has also hit

240 m sq

Availability sq other Zurich market areas with exception of the (in (in 200 200 «Europaallee, Langstrasse & Werd» submarket,

150 160 where after a full renovation new office space is Supply

120 CHF/ (in Rent being offered in the «Wengihof» building. 3.2% 100 80 In the more peripheral locations outside the city Availability rate 50 40 limits, the offer has increased: The «Limmattal» 0 0 shows an availability rate of 9.1%. The airport region Q1 14 Q3 14 Q1 15 Q3 15 Q1 16 Q3 16 Q1 17 Q3 17 Q1 18 Q3 18 Q2 19 has gone up to 16.2% and, with 148,000 m², offers CHF 350/sq m p.a. more than half as much office space than the entire Availability Median asking rent City of Zurich. Median asking rent Source: CBRE Research, 2019 CHF 775/sq m p.a. Figure 2: Pipeline in city of Zurich, Limmattal and Airport regions PIPELINE 250,000 In the second half of 2019, the offer in the Zurich Prime rent region should continue to decline or at least remain stable. Although almost 80,000 m² of office space 200,000 will be ready for occupancy in the current year, over 90% have already been pre-let.

370,000 sq m m) 150,000 The situation will be different in the coming year sq

New developments by 2022 (in though, in which the offer will be greatly expanded: 100,000 Around 190,000 m² of office space will come onto space the market. This is happening in some of the central

Office submarkets where absorption should not face any 59,000 sq m 50,000 difficulties, such as Zurich CBD (+13,500 m² or Refurbishments by 2022 0.7%), but especially in areas that are already 0 characterized by high availability and low pre-letting 2019 2020 2021 2022 rates, such as the airport area. As a result, we expect Trend compared to previous quarter the current recovery of the market to continue to New developments and refurbishments incl. Limmattal and Airport regions Pre-Let Available focus on the city ground. Source: CBRE Research, 2019

Figure 3: Zurich submarkets Figure 4: Office market key data

Submarkets Availability Availability rate Range of asking rents* Median asking rent (in sq m) (in %) (CHF/sq m p.a.) (CHF/sq m p.a.) CBD 69’000 3,8 390-660 515 Zurich West 11’000 1,0 240-500 335 Altstetten 50’000 4,5 180-310 210 Zurich North 74’000 6,9 200-330 250 Wiedikon & Binz 5’000 0,8 210-320 250 Hard & Sihlfeld 5’000 2,5 230-330 260 Europaallee, Langstrasse & Werd 10’000 2,1 260-600 460 Oberstrass & Unterstrass 6’000 1,9 330-450 350 Further submarkets 12’000 1,3 200-460 320

City of Zurich Total Source:242’000 CBRE, Q4 2016 3,2 350 Limmattal (Dietikon, Schlieren, Urdorf) 43’000 9,1 140-230 170 Airport (Kloten, Rümlang, Opfikon/Glattbrugg, Wallisellen) 148’000 16,2 150-310 200

*The range of asking prices excludes the highest and lowest 10% and may have been adapted according to the data quality. Source: CBRE Research, 2019

FOR MORE DETAILED INFORMATION PLEASE CONTACT OUR EXPERTS David Schoch Head of Research & Consulting [email protected]

Source: CBRE Research, 2019 Zurich Geneva Lausanne Basel Bärengasse 29 33, Rue des Bains 16-18, Avenue Louis-Ruchonnet Picassoplatz 8 CH-8001 Zürich CH-1211 Geneva CH-1003 Lausanne CH-4052 Basel www.cbre.ch

Methodology To learn more about CBRE Research, or to access additional research reports, please visit the Global Research Gateway at www.cbre.com/researchgateway.

The cutoff date for the availability and rent data was June 3rd, 2019. Only rental CBRE Disclaimer 2019 CBRE Limited confirms that information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt their accuracy, we space offering more than 50 sq m and available within three months were have not verified them and make no guarantee, warranty or representation about them. It is your responsibility to confirm independently their accuracy and completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written included in our statistics. permission of CBRE.