Real estate investments Switzerland

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1 Real estate investments * Update due to the publication of the ImmobilienAlmanach Schweiz 217 (in German) (22th December 216) by FPRE. SWX IAZI real estate price index: the growth rate for apartment buildings increased slightly compared to the previous quarter and is now (previous quarter:,). Out of an annual perspective, there is a stagnation with,1% (previous quarter,1%). The performance of apartment buildings was at,9% in the 3nd quarter of 216 (previous quarter:,), while annually, it is stagnant at 3, (previous quarter: 3,). After two quarters of negative growth, the employment growth in the Swiss office market increased in the 2nd quarter 216 again (+,) compared to the previous quarter. In particular, the sector of the corporate services employed more people. The latest survey shows that there was hardly any change in consumer sentiment in between July and October 216. The index currently stands at 13 points and has consistently come in at a value below its longterm average for over a year now. However, consumers believe that the outlook for the economy over the coming months is considerably better than in July. The assessment of price trends also underwent an upward adjustment. Apartment buildings (1) Lake Geneva Jura Swiss plateau (Mittelland) Basel Zurich Eastern Alpine area Southern Demand Supply Cashflow Initial yields Market values Helptext to the valuations: All valuations are done from a owner/seller perspective. The circles describe the actual situation: green: unproblematic situation; yellow: some problems; red: problematic situation. Arrows describe the forecast for the following 12 months. : expected improvement; : stable; : expected aggravation. Source: Fahrländer Partner. Office buildings (new construction) (2) Demand Supply Cashflow Initial yields Market values Lake Geneva Jura Swiss plateau (Mittelland) Basel Zurich Eastern Alpine area Southern All valuations are done from a owner/seller perspective. The circles describe the actual situation: green: unproblematic situation; yellow: some problems; red: problematic situation. Arrows describe the forecast for the following 12 months. : expected improvement; : stable; : expected aggravation. Helptext to the valuations: Source: Fahrländer Partner. For all sources please check the glossary and impressum on the last page. Real Estate Investment Solutions AG StOswaldsGasse 1 63 Zug

2 Performance of direct and indirect real estate markets SWX IAZI Investment Real Estate Performance Index (3) Net cashflow return Price return Total return Source: IAZI, cf. meta analysis real estate FPRE. SWIIT (Closing Prices), REAL (Closing Prices), KGAST (4) SWIIT REAL KGAST Source: SIX Swiss Exchange, KGAST. SFA yield on investm. indicator for real estate funds SFA ARI (5) 8% 7% 3% Source: SFA. The goal of Immofunds.ch is to connect information and experts in the field of real estate investments in. All stakeholders in the market, such as promoters, trustees or investors, are welcome.

3 Macroeconomic environment (1) In October 216, the KOF Economic Barometer rose by 3,1 points (from revised 11,6 in September) to 14,7. It thus recovered from its recent summer trough of below the points. The UBS consumption indicator rose from 1,53 to 1,59 points in September. The positive trend continues and points to further growth in private consumption for the fourth quarter 216. The procure.ch Purchasing Manager's Index (PMI) by procure.ch/credit Suisse rose by 1,6 points (rounded) in October 216 and at 54,7 points closed at its highest level since May 216 and above the growth threshold of 5 points for the eleventh month in succession. Economic forecasts Swiss economy (6) GDP, real Private consumption Public consumption Equipment investments Investments in construction Exports Imports Unemployment rate Consumer prices SECO Changes to previous year as a %. Consecutively, the date of the current forcast will be listed directly, the date of the previous forecast in parentheses: SECO: ( ), KOF: ( ), Créa: ( ), CS: ( ), UBS: ( ), BAKBASEL: ( ). Arrows: (previous forecast was adjusted upwards), (previous forecast was adjusted downwards), (previous forecast kept). The first forecast of the year will not be listed with an arrow. The arrows with the arithmetic means (columns on the right) show the changes of the means to the previous meta analysis economy. KOF Créa CS UBS BAK Arithmetic means Real GDP and unemployment rate (7) 3% 1% 1% 3% GDP real unemployment rate growth potential Note: The values for 216 and 217 are forecasts. Since June 216, the unemployment rate is based on occupation numbers according to the pooling (revised from January 214). Source: cf. fig. 6, Fahrländer partner (growth potential). Private consumption, consumer sentiment and UBS consumption indicator (8) In October, the UBS consumption indicator rose from 1,47 to 1,49 points. Positive developments in the automobile market and robust domestic tourism continue to support private consumption private consumption (in %) UBS consumption indicator Consumer sentiment, EUcompatible (right scale) 5 Source: WMR UBS, Seco, cf. meta analysis economy FPRE.

4 Macroeconomic environment (2) Real wages and rate of price increase (9) Inflation forecast SNB Forecast December %. Libor.7 Forecast September Libor.7 Compared to September, the new conditional inflation forecast of the SNB has been revised slightly downwards in the short term. The SNB anticipates an unchanged inflation rate of, for 216, for 217 +,1% (September: +,). Real wages Nominal wages inflation 3 month libor Source: FSO, cf. meta analysis economy FPRE. Yields on Confederation bonds (1) normal band Duration four weeks ago 1 year 5 years 1 years one year ago.63% % %.47% Laufzeit in Jahren four weeks ago one year ago Source: SNB, Fahrländer Partner (normal band), cf. meta analysis real estate FPRE. Mortgage rates (11) Mortgage September 216 3% variable fixed (3 years) fixed (5 years) fixed (1 years) % % variable fixed (3 years) fixed (5 years) fixed (1 years) Source: SNB, cf. meta analysis real estate FPRE. Mortgage volume inland (in bn CHF) (12) 1 8% 8 September 216 Volume in billion CHF Mortgage claims % Volume (right scale) Source: SNB, cf. meta analysis real estate FPRE.

5 Demand indicators Net immigration permanent resident population (in 1') (13) 8 3rd quarter 216 Net immigration permanent resident population (in 1') st quarter 2nd quarter 3rd quarter 4th quarter Source: FSO (2129), SEM (21214), cf. meta analysis real estate FPRE. Net immigration monthly (in 1') (14) Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec October 216 Net immigration permanent resident population (in 1') Arithmetic mean 214 Arithmetic mean 215 Arithmetic mean 216 Source: SEM, cf. meta analysis real estate FPRE. Population growth by MS regions (212215) (15) Note: circle radius in relation to population 215. Maps: FSO Geostat/Swisstopo. Source: FSO, cf. ImmobilienAlmanach Schweiz 217.

6 Supply indicators Forecast construction activity (16) in m CHF Building construction 53'886 54'812 55'523 Building construction. 1.7% 1.3% Residential building Industrial buildings 33'154 11'981 33'84 12'53 34'286 12'11 Residential building Industrial buildings.7% Infrastructure 8'751 8'955 9'126 Infrastructure 1.1% 2.3% 1.9% Source: BAK, cf. meta analysis real estate FPRE. Construction index Credit Suisse / SBV (nominal) (17) rd quarter 216 Construction index total Building construction Residential building Index (1996=) 13% 13% 17% The construction index is an early indicator of the construction economy in which foresees current quarter turnover Residential building Building construction Construction index Source: Credit Suisse, SBC, cf. meta analysis real estate FPRE. Production price index (change p.a.) (18) 1 8% 8% rd quarter 216 Index (23=) Change compared to previous quarter Stone and concrete construction Apartment building SFH Build. and commer. constr %..7% 1.1% The production price index PKI shows the change in production costs. Apartment building (stone and concrete construction) SFH (stone and concrete construction) Build. and commer. constr. Source: SBV, vedi Metaanalisi immobiliare FPRE. Swiss construction price index (change p.a.) (19) 3% 1% 1% 3% st half year 216 Index (21=) Change compared to previous half year Total building sector %. Office buildings Apartment buildings % The Swiss building price index is an economic indicator which captures the evolution of construction costs as reported by local construction companies. New construction of office buildings Total building sector New construction of apartment buildings Source: FSO, vedi Metaanalisi immobiliare FPRE. Fahrländer Partner AG Raumentwicklung Seebahnstrasse Zürich info@fpre.ch «ImmobilienAlmanach Schweiz» On 22 december 216, the guide for Swiss residential and commercial properties markets for the year 217 will be published (in German). Order: almanach@fpre.ch Costs: CHF / copy Information:

7 Transaction market Market value index apartment buildings (2) Zürich (MS) Bern (MS) BaselStadt (MS) Genève (MS) Note: market value index (25=). Source: RESC Fahrländer Partner, base scenario November 216. Market value evolution apartment buildings (21) Note: all values are based on new constructions (excl. depreciation). Circle radius in relation to stock of rented apartments 215. Maps: FSO Geostat/Swisstopo. Source: RESC Fahrländer Partner, base scenario November 216. Market value index office property (22) Zürich (MS) Bern (MS) BaselStadt (MS) Genève (MS) Note: market value index (25=). Source: RESC Fahrländer Partner, base scenario November 216. Market value evolution office property (23) Note: all values are based on new constructions (excl. depreciation). Circle radius in relation to stock of office space 214. Maps: FSO Geostat/Swisstopo. Source: RESC Fahrländer Partner, base scenario November 216.

8 Rented apartments / apartment buildings Forec.rented ap. / ap.buildings (tot. / av. new constr.) (24) CS(2) Rents Forecast Rents 217 FPRE(1) Prices W&P(2) Rents 217.7% Note: market rents / transaction prices (1) resp. quoted rents (2). Source: Credit Suisse, FPRE, Wüest Partner, meta analysis real estate FPRE. Market rents rented apartments (RA) (25) rd quarter 216 Index (=) Changes to previous quarter Lake Geneva Jura % Espace Mittelland %.3% Basel % 1.1% Zurich Eastern %.8% Alps Southern % 1. Market rents FPRE (old building) Market rents FPRE (total) Market rents FPRE (new construction) Source: Fahrländer Partner, meta analysis real estate FPRE. Market rents RA by region (26) Market rents RA by spatial type (27) Lake Geneva Espace Mittelland Basel Zurich Eastern Southern Top locations Other agglomerations Large central agglomerations Rural area Source: Fahrländer Partner, meta analysis real estate FPRE. Source: Fahrländer Partner, meta analysis real estate FPRE. Quoted rents RA (change p.a.) (28) Quoted rents RA by regions (29) % 14 1% % Rented apartments (W&P) Source: Homegate, Wüest Partner, cf. meta analysis real estate FPRE. Homegate Lake Geneva Western Berne Central NW Zurich Eastern Southern Source: SNB, Wüest Partner, cf. meta analysis real estate FPRE. Market rent 4.5 room apartment by regions (CHF/month) (3) 3'5 3' 2'5 3rd quartile median 1st quartile 2' 1'5 1' 5 Lake Geneva Jura Swiss plateau (Mittelland) Basel Zurich Eastern Alpine area Southern Note: new construction, 115m2 HNF SIA 416, average standard and average microlocation. Source: FPRE.

9 Office property Forecast office space (31) Rents Prices CS(2) Forecast FPRE(1) W&P(2) 217.8% Note: market rents / transaction prices (1) resp. quoted rents (2). Source: Credit Suisse, FPRE, Wüest Partner, meta analysis real estate FPRE. Market rents for office spaces by region (net rents) (32) Changes to previous 3rd quarter 216 Index (=) quarter Lake Geneva % Espace Mittelland % Basel % Zurich % 8.1% Lake Geneva Espace Mittelland Basel Zurich Source: Fahrländer Partner, meta analysis real estate FPRE. Quoted rents for office space (net rents) (33) Office space: supply rate for the major Swiss centres (34) Geneva Berne Basel Zurich Source: SNB, Wüest Partner, meta analysis real estate FPRE. 3st quarter 216 Change compared to previous quarter JLL CBRE WP CS CSL JLL CBRE WP CS CSL JLL CBRE WP CS CSL Source: JLL, CBRE, WP, CS, CSL Immobilien. Zurich Geneva Basel % % %.18%p.2p.3p.5p.6p.8p.1p.p.1p 1.38%p.5p 1.p.3p 6..5p.5p Change in job vacancies (35) Index of job vacancies TOTAL Banking and insurance sector Real estate sector IT sector 3rd quater 216 8% Безработица всего Datenreihen1 Безработица 224 Безработица 6+ Source: FSO, cf. meta analysis real estate FPRE. Market rents office space by region (CHF/m2a) (36) rd quartile median 1st quartile 2 5 Lake Geneva Jura Swiss plateau (Mittelland) Basel Zurich Eastern Alpine area Southern Note: new construction, 2m2 NF SIA 416, average standard and average microlocation. Source: FPRE.

10 Sources and glossary Glossary Note Indicator Source Data as of 12 Fahrländer Partner 4th quarter Cf. meta analysis real estate FPRE IAZI 3rd quarter Closing Prices SWIIT, REAL SIX KGAST KGAST SFA 2nd quarter Cf. meta analysis economy FPRE SECO FSO SECO KOF Créa Credit Suisse November 216 November Cf. meta analysis economy FPRE UBS fig. 6 8 Cf. meta analysis economy FPRE SECO SECO FSO 3rd quarter 216 November 21 9 Cf. meta analysis economy FPRE FSO Cf. meta analysis real estate FPRE SNB Cf. meta analysis real estate FPRE SNB Sept Cf. meta analysis real estate FPRE FSO, SEM 3rd quarter Cf. meta analysis real estate FPRE SEM October ImmobilienAlmanach Schweiz 217 FSO, FOM Cf. meta analysis real estate FPRE 17 Nominal change compared to same quarter of previous year Credit Suisse, SBV 3rd quarter SBV 3rd quarter FSO, FOM 1st half year Base scenario November 216 Fahrländer Partner 4th quarter Cf. meta analysis real estate FPRE Fahrländer Partner 4th quarter 214 Base scenario November 216 Maps FSO Geostat/Swisstopo 22 Base scenario November 216 Fahrländer Partner 4th quarter Cf. meta analysis real estate FPRE Fahrländer Partner 4th quarter 214 Base scenario November 216 Maps 24 Cf. meta analysis real estate FPRE 2527 Cf. meta analysis real estate FPRE Fahrländer Partner 3rd quarter Homegate 3rd quarter 215 Wüest Partner 3rd quarter Cf. meta analysis real estate FPRE SNB/W&P 1st half year IMBAS FPRE 4th quarter Cf. meta analysis real estate FPRE 32 Cf. meta analysis real estate FPRE Fahrländer Partner 3rd quarter Cf. meta analysis real estate FPRE SNB/W&P 1. half year Cf. meta analysis real estate FPRE Jones Lang Lasalle 3st quarter 216 CBRE 3st quarter 216 Wüest Partner 3st quarter 216 Credit Suisse 3st quarter 216 CSL 3st quarter Cf. meta analysis economy FPRE FSO JOBSTAT 3rd quater IMBAS FPRE 4th quarter 214 Forecasts The Swiss Real Estate Market Credit Suisse 216 ImmobilienAlmanach Schweiz 217 Fahrländer Partner 216 Immomonitoring Wüest Partner 217 I 1 Hochbauprognose BAKBASEL 216

11 Impressum Disclaimer Impressum Fahrländer Partner Raumentwicklung and Real Estate Investment Solution elaborate the meta analysis economy with highest care. Despite this, it is not possible to guarantee the accuracy, correctness, timeliness and completeness of all the information. Also check original sources. Real estate investments is predominantly based on data of the meta analysis real estate and economy of Fahrländer Partner. The meta analises real estate and economy are base of the newest available date. You can subscribe for free to the meta analyses real estate and economy: The retransmission of the publication is wished. Please contact us before a large transmission. You can subscribe for free to the publication real estate investments : Sponsoring The publication real estate investments is a free service offered by Fahrländer Partner Raumentwicklung and Real Estate Investment Solutions. We offer you the possibility to appear as a sponsor in this publication. Please contact us. Contact Fahrländer Partner AG Real Estate Investment Raumentwicklung Solutions AG Seebahnstrasse 89 Münzrain 1 Beethovenstrasse Zürich 35 Bern 82 Zürich meta@fpre.ch meta@fpre.ch