Switzerland lacks modern warehouses and distribution centers and this situation has been further aggravated by the pandemic. The success of online ordering has increased the need, according to a study published Tuesday by Credit Suisse.
Retail space, hotels, and offices are suffering. However, logistics real estate is going completely against the tide. It is booming and prices are rising.
E-commerce needs very large areas – three times as much as traditional retail. Space is also needed for order picking and returns processing.
Difficulties to grow
However, the offer remains very limited in Switzerland. “There is a certain shortage of land and sites suitable for this kind of use,” notes Sara Carnazzi Weber, an economist at Credit Suisse, in La Matinale on Wednesday. “And many developments, especially large ones, are encountering opposition and difficulties in the communities where they want to develop, and are therefore moving rather slowly.
Until now, investors had been reluctant to invest in logistics real estate in Switzerland. But things are changing, thanks to the good health of online business during the crisis.
Relatively resilient sector
“During this period, these companies continued to pay their rent, which is by far not the case for all companies,” emphasizes Pierre Jacquot, head of real estate activities within the Edmond de Rothschild Group. “There is little supply in relation to demand and this is a relatively resilient asset class, which pays its rent even in difficult times”.
Prices are therefore likely to continue to rise in the future. Demand is not likely to dry up any time soon, while properties will remain scarce on the market.