Zurich Commercial Real Estate: Offices, Hotels, and Retail in JLL Report

Photo: JLL

The Zurich commercial real estate market in 2025 shows mixed dynamics. A new JLL study highlights contrasting trends across key segments, shaped by limited construction, strong tourism demand, and robust purchasing power.

In Q2 2025, office supply in Zurich declined by 14,700 sq. m, lowering the vacancy rate from 5.3% to 5.1%, according to JLL. The drop was driven by fewer new developments, repurposing of existing stock, and successful leasing deals in areas such as Shilcity and The Circle. Office space decreased in Districts 1, 4, 5, 6, and 8, as well as Schlieren, while District 3 and Wallisellen saw modest growth.

Limited prime availability combined with steady demand pushed up prime rents, while overall market rents remained stable. JLL reports prime office rents now at CHF 975 (€1,034) per sq. m per year, with a median of CHF 300 (€321). Capital values rose to CHF 46,250 (€49,500) per sq. m, while prime yields remained at 1.9%.

Looking ahead, less than 82,000 sq. m of new office space is planned for 2025–2027, a fraction of supply delivered between 2020 and 2024. Low development volumes and repurposing projects will further reduce vacancy, sustaining upward pressure in quality segments.

Hotels: Recovery and New Projects

Zurich’s hotel sector continues
to recover after the pandemic. In H1 2025, room occupancy remained steady (+0.3% YoY), while average daily rates rose about 5%, lifting RevPAR by 5.5%.

Key events, such as UEFA Women’s EURO 2025 matches hosted in Zurich, boosted visitor numbers, particularly with England and Germany’s teams staying in the city. BAK economists expect urban tourism to remain above average in the coming years.

Major transactions included Flughafen Zürich AG’s CHF 155 million (€166m) acquisition of the Radisson Blu at the airport. In Oerlikon, the former Swissôtel reopened as Mama Shelter’s first Swiss property (178 rooms). By end-2025, the Moxy Hotel (162 rooms) will launch on the site of the renovated H+ Hotel. Althoff Hotels, owner of the Urban Loft brand, is also exploring new Zurich sites.

Statistics confirm strong growth: overnight stays hit 4.09 million in the last 12 months (vs. 3.63m in 2019). International tourists accounted for ~70%. Average occupancy rose to 74.8%, while room supply grew to 9,415 rooms.

Retail: Bahnhofstrasse Among Europe’s Most Expensive

Prime rents on Bahnhofstrasse, Zurich’s luxury shopping street, have surged more than 20% since 2020, reaching CHF 10,250 (€11,000) per sq. m per year by end-2024. This ranks Zurich third in Europe for high street retail rents, after Paris and London, notes JLL. Vacancy is effectively zero, with every available unit quickly leased.

Zurich also tops Europe in purchasing power: per capita averages CHF 52,100 (€55,226), compared to CHF 21,900 (€23,214) across 66 cities. This supports strong retail demand, especially in prime locations.

Bahnhofstrasse has transformed dramatically. In 1990, it had 97 stores, 21 of which remain today, but luxury retail has expanded sharply — jewelry and watch boutiques grew from 14 to over 40. Recent openings include Audemars Piguet, Balenciaga, Cartier, Chanel, Gucci, Moncler, Versace, and others.

Most buildings on Bahnhofstrasse have been renovated or are under redevelopment, including Globus, Jelmoli, and Brannhof, further reinforcing its position as Switzerland’s luxury retail hub.

Investment activity remains limited, as institutional investors typically adopt long-term ownership strategies, reducing liquidity. Still, strategic interest remains high. Prime yields have compressed to 2%, underscoring intense competition for rare opportunities.