Has the abolition of the Lex Friedrich two years ago made any difference in Switzerland? EuroProperty’s survey on the country finds that international investors have been slow to take advantage of their new freedom to invest in Swiss property.
There have been a few corporate deals – the tie-ups between Swiss company Maag and Germany’s RSE and Spain’s Prima, for example, show that there is international interest in the market. Not least because there are some prize assets to chase. Zurich’s status in the financial world means there are plenty of banks and other rich financial institutions ripe to divest their property. Through Maag, RSE and Prima are participating in the country’s largest ever sale and leaseback deal, with UBS.
But while legal restrictions on foreign investment may have been removed, the country’s insularity is proving to be a handicap as borders fall away elsewhere in all sectors, not just property. Swiss boasts of independence and neutrality are hollow compared with the opportunity offered by the economies in the single market.
Sweden makes an interesting contrast. The country is part of the EU but its rejection, for now, of the single currency shows a certain obduracy in not simply running with the pack. And like Switzerland, the property market is still tightly controlled by domestic funds and property companies, despite a wave of US interest that surfaced in 1997. Domestic interest in the market is all the stronger since the property crash of the late 1980s sent Swedish investors that had expanded into other European countries scurrying back home.
But far from being shunned by international investors, Swedish companies are targeted by overseas money for their focus and for their vision. Consolidation in the sector is strengthening the appeal of Swedish companies, helping to counter investors’ fears of currency risks and mildly conservative Swedish management. The combined forces of Castellum and Diligentia will be firmly placed on investors’ radar screens.
Rodamco Continental Europe has made a firm commitment to direct property in Sweden through its purchase of a controlling interest in shopping centre specialist Piren. Rodamco CE sees both Sweden and Denmark as essential components of its pan-European leasing strategy. The fact is that Stockholm and Copenhagen are on the investment map in a way that Geneva and Zurich are not.
Andrea Carpenter
