Further Decrease in Office Availability Despite COVID-19
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MARKETVIEW SNAPSHOT ZURICH OFFICE, Q2 2020 Zurich Office, Q2 2020 Further decrease in office availability despite COVID-19 Figure 1: Availability and median asking rent in the city of Zurich AVAILABILITY MARKET SUMMARY Q2 2020 400 400 Despite the current economic crisis, office CITY OF ZURICH 360 availability continued to decline in the first half of 350 2020. It now equals 194,000 sq m, compared to 320 300 206,000 sq m at the end of 2019. This means that 280 .) the office market has been able to benefit until 194,000 sq m p.a 250 recently from the employment growth seen until the 240 m sq end of 2019. Availability 200 200 160 Good net absorption was observed in particular in 150 Zurich North (-13,000 sq m) and Zurich CBD 120 CHF/(in Rent (-10,000 sq m). The availability rate in the CBD is 2.5% m) sq ,000 (in spaceOiffce 100 80 now at 3.1% but still above the city-wide average of a Availability rate 50 40 low 2.5%. 0 0 Companies mostly have long-term leases and wait to Q2 14 Q4 14 Q2 15 Q4 15 Q2 16 Q4 16 Q2 17 Q4 17 Q2 18 Q4 18 Q2 19 Q4 19 Q2 20 see how business develops, which leads to a certain market lethargy and delayed corona effects. CHF 345/sq m p.a. Availability Median asking rent Median asking rent Quelle: CBRE Research, 2020 CHF 850/sq m p.a. Figure 2: Pipeline in the city of Zurich, Limmattal and airport regions (new builds) PIPELINE 180,000 Slightly rising vacancies can probably only be expected towards the end of the year and especially Prime rent 160,000 in 2021, although the city of Zurich will hardly be hit 140,000 by any major effects thanks to a well diversified 2 120,000 economic structure and a weakening development 222,000 m pipeline. 100,000 Developments by 2024 The situation could be different in the Limmattal 80,000 and the airport regions. Here, vacancy rates have recently risen further to 18.7% (airport area) and Office space (in sq m) sq(in spaceOffice 60,000 12.2% (Limmattal). Many older buildings will 2 40,000 379,000 m continue to struggle with problems, especially in the Developments in the region by 2024* 20,000 current economic situation. However, the declining 0 project pipeline and the lack of space in the city 2020 2021 2022 2023 2024 center are playing a positive role here as well. After Trend compared to previous quarter the completion of The Circle, hardly any further new *Incl. city of Zurich, Limmattal and airport regions Pre-let Not let Quelle: CBRE Research, 2020 builds are planned. Q2 2020, CBRE Research © 2020, CBRE Switzerland MARKETVIEW SNAPSHOT ZURICH OFFICE, Q2 2020 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 %) (in CHF/sq m p.a.) (in CHF/sq m p.a.) CBD 57,000 3.1 390-660 500 Zurich West 10,000 0.9 240-500 320 Altstetten 37,000 3.3 180-310 220 Zurich North 53,000 5.0 200-330 270 Wiedikon, Binz 11,000 1.8 210-320 270 Hard, Sihlfeld 3,000 1.5 230-330 250 Europaallee, Langstrasse, Werd 8,000 1.7 260-600 450 Oberstrass, Unterstrass 4,000 1.3 330-450 350 Further submarkets 11,000 1.2 200-460 310 City of Zurich total 194,000Source: CBRE, Q4 2016 2.5 345 Limmattal (Dietikon, Schlieren, Urdorf) 58,000 12.2 140-230 170 Airport (Kloten, Rümlang, Opfikon/Glattbrugg, Wallisellen) 171,000 17.4 150-310 200 *The range of asking prices excludes the highest and lowest 10% and may have been adapted according to the data quality. Source: CBRE Research, 2020 FOR MORE DETAILED INFORMATION PLEASE CONTACT OUR EXPERTS David Schoch Research & Consulting [email protected] Source: CBRE Research, 2020 Zurich Geneva Lausanne Basel Bärengasse 29 Rue des Bains 33 Rue Saint-Martin 26 Picassoplatz 8 CH-8001 Zürich CH-1211 Genève CH-1005 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. th CBRE Disclaimer 2020 The cutoff date for the availability and rent data was July 17 , 2020. Only rental 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. Q2 2020, CBRE Research © 2020, CBRE Switzerland.