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View of the Europaalle urban development in Zurich on April 12, 2019. © Keystone / Christian Beutler

The share of foreign investment in Swiss commercial real estate fell from 15% before 2011 to 5% between 2017 and 2019, according to new research. The issue of foreigners buying cheap Swiss property during the Covid-19 pandemic is being discussed in Bern.

Foreign investment in commercial buildings in Switzerland reached CHF750 million ($841 million) a year, or an average of 11% of the total investment (CHF6.8 billion) between 2011 and 2020, according to research by CBRE Switzerland, a commercial real estate services company.

Before 2011, the proportion of foreign investment was higher (15%), especially between 2005 and 2008 when many international investors entered the Swiss market before partly withdrawing after the financial crisis.

The exit of foreign investors from the Swiss market has been more pronounced in recent years (2017 to 2019), CBRE said. This is especially due to the inflation of real estate prices and the high cost of the Swiss franc. Foreign investment represented only 5% of total investment during this period.

2020 stood out as an exceptional year due to “a few very large transactions”, CBRE added.

Many of the foreign buyers who invested in Switzerland over the past decade came from Britain, Germany, France and Israel. Asian investors played a minor role, with the exception of the hotel sector, it said.

In Bern, some politicians are fearful that the coronavirus pandemic may push Swiss companies to sell their properties, and that foreign investors could snap them up at low prices.

A legal affairs commission of the House of Representatives proposed in January to temporarily tighten the “Lex Koller”, a federal law restricting foreign purchases of Swiss property. The commission agreed to extend the restrictions to buildings intended for a commercial or professional activity. The parliamentary initiative must still be approved by the Senate legal affairs commission.

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