Swiss real estate security – Edition 2025/26

After a subdued performance in 2022 and 2023, capital market transactions gained noticeable momentum in 2024. So far in 2025, more than CHF 3.4 billion has flowed into Swiss real estate funds, with nearly one-third of that amount allocated to non-listed real estate funds. Additional emissions of around CHF 750 million have already been announced by the end of the year.

The index for listed Swiss real estate funds, the SXI Real Estate Funds Broad (SWIIT Index), has grown this year through three new listings with a combined volume of around CHF 1 billion. A fourth listing, amounting to approximately CHF 400 million, is already planned for early December.

In contrast, listed real estate companies have been more restrained in their capital market activities. This segment has attracted just over CHF 400 million in equity so far, while investment groups of real estate investment foundations have raised more than CHF 2.5 billion in new capital.

Following a strong 2024, Swiss listed real estate investments are again showing above-average performance in 2025. Particularly noteworthy is the performance of listed real estate equities: The SXI Real Estate Shares Broad (REAL Index) recorded a year-to-date increase of 16.8%, reaching 4,282.60 points at the end of October.

For real estate funds, the high level of supply in the capital market has been absorbed by sustained strong demand. The SWIIT Index rose by 8.7% since the beginning of the year, reaching a new all-time high of 590.70 points at the end of October.

Investor interest focused particularly on residential real estate funds. Of the 25 funds that outperformed the SWIIT Index, 19 focus on the residential segment. This preference has further widened the spread between the cash flow yields of residential and commercial funds. While the highest cash flow yields for residential funds are, in some cases, only 1.6%, certain commercial funds are trading at yields above 5%. On average, cash flow yields for residential real estate funds in the SWIIT Index stand at around 2.1%, compared to about 3.7% for commercial funds.

With the strong performance of real estate investments, the average premium (agio) has also increased. Recent valuation uplifts by real estate appraisers, particularly in the residential segment, have partially mitigated, but not fully compensated, this effect.

As of the end of October, the premium of the SWIIT Index stands at around 37%, exceeding the long-term average of approximately 19%. However, this average is somewhat distorted by the lower premiums observed in the early years following the index launch. Considering only the past ten years, the average premium level is around 26%.

The REAL Index premium, at roughly 22%, also exceeds its ten-year average of about 15%. Looking at the seasonal patterns of monthly performance figures for both main indexes suggests that this trend could continue through the end of the year: the REAL Index posted positive returns in four of the past six Novembers and in every subsequent December, while the SWIIT Index showed positive performance in all November and December months over the past six years.

Fig. 1: Monthly returns of the SXI Real Estate Fund Broad TR (SWIIT Index)