2. Sectors

RealEstate Market

Themostrealestatecompanieshaveservice-orientedbusinessesthatpursuetransaction or property holding activities. The real estate is an inherently heterogeneousand fragmentedsector.There aremany fields ofactivities,bothparallel andsequential,along a building’s life cycle (planning, building,managementand demolition). Real estate firms are active in one,or more than one, field, as well as in one,ormore than one, market. Additionally, real estate firms range from family-owned businesses, private to publiclylistedcompanies.

The real estate market isfacing a tremendous upheaval, new digitaltechnologiesin planning,construction, asset management,marketing, operation and maintenance, facility management and administration are revolutionizing the entire life cycle of a property. The Swiss real estate markets increasingly with new facedchallenges. The real estate portfolios are getting older andatthe sametime theusage requirements change, as well asthe desire for flexibility. This goeshand in hand with a provenrenovation potential of the current real estate portfolio. These developments are influenced by socialtrends, such as achange in values towards sustainablebuildingsandan increasing acceptance of digital change. Thesustainability criteria for purchasing decisions by institutionalinvestorswillbegivencrucialimportanceinthefuture.

The location is still anabsolutely central criterion in the real estate industry. It has a significant impact on real estate valuations, portfolio strategies and the success of real estateprojects.

A full recovery from the corona pandemic this year across allreal estate business areas is rather unrealistic. The business hotel industry is confronted with negative development prospects, insolvency risks andthus falling prices.A negative price correction is to be expected for retail space and even foroffice properties outside of the "prime locations”. However, the acceleratedprice increase in recentyears has leveled off at a moderate level. The most sought-after propertiesin Switzerland include single-familyhouses in central locations. In contrast, prices for condominiums have already fallen slightly in some regions. Buyerscontinue to pay top prices for building plots. The reason for this is thelack of arable land, whichis particularly noticeablein metropolitan areas. Properties in southernand western Switzerland are less expensive. The real estate boom has graduallyreacheditslimitandinsomeplacespriceshavealreadydroppedsignificantly.

Thedigitization ofallreal estate business areasis now openingup opportunities because it allows central information to be collected and evaluated more easily. The COVID-19 pandemic hasshown how important itis to be able to access dataas a basis for various searchqueries. The effects of the pandemic gave digitization an additional boost. When largeparts ofthe employees work inthehome office, the resilience ofdigitalprocesses is simply a matter of survival. However, digitization will also have a major impact on future office useand space requirements. PropTechs will always have good ideas that will put theclassicrealestateplayersunderpressure.