Zurich’s CBD has been hardest hit by cost-cutting and efficiency programmes among the financial and insurance occupiers, with a considerable volume of newly vacated office space in prime locations finding little interest and transaction volume down to an all-time low.
The absence of transactions hides an expected downwards trend in prime rents, with new-build, modern space just outside the CBD, such as Europaallee, attracting tenants looking for central locations away from the traditional buildings of the Bahnhofstrasse and the financial and insurance district.
At the same time, new, good quality office space continues to arrive on the market in outlying areas, with the SBB and the city of Zurich announcing new developments such as the centrally located, mixed-use plans for the Zollstrasse area behind the main rail station, and the newly dubbed ‘Andreasturm’ in Oerlikon which should bring 20,000 sq m of office space onto the market by 2018.
Without a major change in both the wider global economic context impacting overall occupier demand, as well as a more proactive and strategic approach to repositioning older buildings, fears are that occupiers moving into the large volume of new-build developments over the coming years may simply create an equally large volume of empty space in these older properties, as is already seen to some extent in areas such as Altstetten and outlying districts of northern Zurich, where attractive rents are simply not a great enough attraction and vacancy periods have become almost impossible to predict.
Source : DTZ (Groupe UGL)