Alphaprop Insights Webinar: Market update on indirect real estate investments

The Swiss market for indirect real estate investments is currently going through a phase of remarkable dynamism. In our last Alphaprop Insights webinar, industry experts analyzed current developments in the sector and showed how the market is repositioning itself after the interest rate turnaround.

General market update: Swiss real estate still in high demand

Kerstin Hansen (Head Investment Strategy & Research at UBS) introduced the event with an analysis of the macroeconomic framework. The Swiss economy is essentially resilient, but is facing noticeable global headwinds.

• Economic growth in retrospect: After the Swiss economy closed 2025 with below-average but positive GDP growth of 1.4%, the preliminary figures for the first quarter of 2026 signal a plus of 0.5%.
• Gloomy forecasts: The growth forecasts for 2026 as a whole have been revised significantly downwards to 0.7%, adjusted for the sporting event. The main drivers are the geopolitical tensions in the Middle East and the closure of the Strait of Hormuz, which is fueling global fears of stagflation.
• Commodity and inflation trends: Prices for oil (+54% since February) and gas (+65%) have risen massively. In Switzerland, this is reflected with a time lag in inflation, which rose from 0.1% in January/February to 0.6% in April 2026. The Swiss National Bank (SNB) adjusted its conditional inflation forecast upwards in March, but remains comfortably within the target range.
• Interest rate and index volatility: Experts primarily expect the key interest rate to move sideways (currently 0.0%), although an interest rate hike by the end of the year is being priced in on the futures markets due to the volatility. This uncertainty led to a correction in the real estate fund index (SWIIT) of over 5% in March 2026, with the average premium falling from 38.6% to just under 30%. Nevertheless, the real estate market corrected much more mildly than the Swiss share index (-8.8%), underlining investors’ confidence in the stable domestic earnings power.

Despite the fluctuations, activity on the capital market remains high: CHF 1.4 billion has already been successfully raised in the current year 2026 and a further CHF 1.8 billion has been announced. The gap between residential and commercial vehicles is widening, as residential remains the “investor’s darling”. At the same time, the regulatory risk for residential properties is high. In addition to the economic downturn, structural shifts remain on the agenda for commercial properties. The quality of the location and the property as well as active asset management therefore remain at the forefront.

Update on financial statements for indirect investments

Thomas Spycher (Partner at Alphaprop) underpinned the market sentiment with data from the Alphaprop data portal. The “current weather situation” shows a continued strong inflow of capital despite political risks. By May 2026 alone, capital inflows of around 3% of the total volume (approx. CHF 165 billion) have already been announced. At the same time, the yield on 10-year Swiss Confederation bonds has risen by 30 basis points to 59 basis points since February, while the adjusted SWIIT premium settled at 31.1% as at mid-May.

For a detailed analysis, Thomas Spycher analyzed the financial statements for the fourth quarter of 2025 with net assets of CHF 62 billion (market value CHF 76 billion):

• Extremely positive investment returns: On average, an investment return of 5.10% (median 5.31%) was achieved at net asset value (NAV) level across all the vehicles analyzed.
• Success factors: This return is made up of a median of 3.13% from net operating income and 1.85% from capital gains. This means that for the first time since 2022, the market experienced a phase in which revaluations were positive almost across the board.
• Comparison of types of use: The median investment yield in the residential segment was 5.40%, followed by mixed vessels (5.22%) and commercial products (4.98%).

The composition of these yields is interesting if one differentiates between the types of use: While commercial vessels draw their strength entirely from their operating earnings power (operating yield above 4%, residential below 3%), residential portfolios live primarily from capital gains (above 2%, commercial almost zero). On the valuation side, this is driven by real discount rates, which are falling again slightly after a brief peak in 2023. On the rental side, growth in the residential portfolio is gradually leveling off following the pronounced reference interest rate adjustments, while commercial contracts were able to increase income robustly thanks to inflation indexation.

The transaction market: selective partner search and regulatory storm clouds

Ramona Lindenmann (CEO of smeyers) shifted the focus to the direct transaction market. As an independent family-owned SME with 18 employees at three locations, smeyers handles an annual transaction volume of around CHF 250 million.

In contrast to the hot “speed dating phase” of 2021, transaction management today is more like a “partner search over 40”: Investors are acting much more risk-averse, examining portfolios extremely selectively and avoiding potential write-down risks. A transaction volume of CHF 6 to 7 billion is expected for 2026, while net initial yields before capex have settled at a stable 3.2% at pre-Covid levels.

At the same time, various regulatory measures are likely to have a major impact on market activity over the next six months:

• Tightening of the Lex Koller: The bill currently undergoing consultation provides for a ban on the acquisition of commercial real estate purely for investment purposes for foreign players. In addition, shares in listed real estate funds and companies are to be subject to the licensing regime.
• Zurich housing protection initiative: The vote on a cap on rents based on the Basel model harbors the risk of a decline in renovation and new construction activity as well as a shortage of housing supply.
• Revised Anti-Money Laundering Act (AMLA): From probably autumn 2026, real estate consultants and brokers will also be subject to the strict AMLA due diligence obligations for transactions of CHF 5 million or more and must join a self-regulatory organization.
• Sustainability Initiative (“10 Million Switzerland”): Although limiting immigration would have no short-term consequences, it could lead to increased vacancy rates in peripheral locations in the long term.

These tougher conditions are reflected in a pronounced polarization of the market. While modern, ESG-compliant office space at central public transport hubs are among the clear winners, older properties in need of refurbishment in the periphery are disproportionately penalized, as buyers immediately factor upcoming ESG investments into the purchase price.

Conclusion

In summary, the market update shows that the Swiss real estate landscape remains an extremely attractive safe haven despite supply-side inflation risks and macroeconomic dampeners. While the residential segment is supported by a fundamental demand overhang and solid rental growth, commercial core properties are increasingly coming back into the focus of forward-looking asset managers. If you want to position yourself successfully in the current environment, you need to anticipate regulatory developments precisely and make use of strategic options.