Bern, located in the heart of Switzerland, a historic yet modern city, offers promising real estate opportunities to investors from all around the world, yet is still often overlooked. In this article, we invite you to explore the compelling factors that make Bern an ideal location for real estate investments, offering a glimpse into the city’s distinctive charm and undeniable potential for those looking to grow their property portfolios in a thriving and captivating setting.
Why Is Bern the Perfect Place for Real Estate Investment?
Sep 2023Reason 1: The Swiss economy – one of the most resilient and stable in the world
Switzerland has long been popular with real estate investors – and for good reason. The country is characterized by a stable economic and political system, which has been an important driving force behind the country’s strong service and advanced industrial sectors.
Many Swiss companies, especially in the financial, insurance, and pharmaceutical sectors, are among the largest and most important in the world. This, therefore, continues to drive demand for the rental market in the country due to the increasing number of foreign qualified workers moving there (which has recently become much easier thanks to fresh measures implemented by The Federal Department of Justice and Police). And, as a part of Switzerland, the city of Bern is not an exception.
Cross-border commuter permits and the number of short stays subject to registration in H1 2023 vs. H1 2022
Source: State Secretariat for Migration
According to figures revealed by the State Secretariat for Migration (SEM), 41’747 new cross-border commuter permits were issued between January and June 2023 vs. 38’547 in the first half of 2022. The number of short stays* subject to registration has also increased to 168’896 compared with 155’570 in H1 2022.
* Short stays are defined as people who take up a short-term job with a Swiss employer, as well as posted workers and self-employed service providers who stay in Switzerland for a maximum of three months or 90 working days per calendar year.
In the first half of 2023, however, only around 45% of new foreign workers were in short-term employment, while 55% took up long-term employment. The strongest immigration for the purpose of long-term employment was recorded in branches of the industrial sector, within the service sector in the hospitality industry, planning, consulting & IT, trade & healthcare.
Reason 2: Strong rental market and scarcity in supply
As in most Swiss cities, vacant rental apartments in Bern are in short supply. Demand for rental properties in Bern is well above the Swiss average (133 vs. 109 as of August 2023).
Demand index for rental apartments in Bern and Switzerland overall (2014/02 = 100)
Source: Realmatch360.com
The increasing migration of qualified workers (discussed above) is, for the most part, what translates to a higher demand for rental apartments. While the demand, however, has been weakening in Q3 2023, the growing number of retirement-related departures from the labor market should ensure demand for foreign professionals. Therefore, immigration to Switzerland is likely to remain high, as is the demand for rental properties.
Besides, the index of residential property prices in Switzerland has risen continuously over the past 50 years, making it a supreme location for real estate investing.
Reason 3: The capital of innovation and sustainability
Another aspect where Switzerland stands out is its leading role in innovation, where it ranks first in the European Innovation Scoreboard (EIS) and thus is officially the most innovative country in Europe.
The city of Bern, however, is not only the political capital of the country but also claims to be the capital of innovation and, above all, sustainability. In fact, Bern is home to numerous research facilities of crucial international importance, such as the Oeschger Centre for Climate Change Research (OCCR) at the University of Bern and the Wyss Academy for Nature, a world-leading research and implementation center in the field of human wellbeing and nature.
The city’s status as a hub for cutting-edge R&D, particularly in climate change, not only enhances its global reputation but also ensures a dynamic business environment with ample opportunities for growth and prosperity.
This favorable backdrop is poised to attract a substantial portion of eminent figures, wealthy individuals, and others who came specifically to invest. Properties offering innovative solutions tailored to meet the needs of these discerning investors stand to gain in two distinct ways: through revenue generated from their stays, and potential investment should they identify innovative prospects.
Reason 4: Strong tourism industry
Last but not least, Switzerland has always been highly popular among tourists, with Bern being one of the country’s must-visit destinations.
After a brief pandemic-related decline, tourist arrivals across the whole country and also in Bern are now back to pre-COVID levels.
Overnight stays in Bern since 2019
Source: bern.ch
Given the architectural and natural beauty of the city and its many attractions, this certainly comes as no surprise. Bern’s historical Old Town, which is surrounded by the bright blue Aare River, impresses with its well-preserved Medieval architecture, its covered arcades, and its Renaissance fountains.
The famous Bern Minster, the city’s cathedral and one of the most important late-Medieval churches of the country, and the Federal Palace, which houses the Swiss Federal Assembly and the Federal Council, are natural magnets for both domestic and foreign tourists.
The city is also a popular starting point for day trips to the Bernese Alps, including some of Switzerland’s most iconic landmarks like the Jungfraujoch, the Aletsch Glacier, and the alpine village of Lauterbrunnen. Bern’s popularity among tourists, therefore, surely adds to the already high demand for short- and long-term rental properties.
How can one invest in Bern real estate?
All of the above-mentioned factors underscore Bern’s status as an extremely attractive and resilient location for real estate investors. As such, savvy investors must keep an eye on this city and act promptly when attractive real estate opportunities arise. That's why we have spent a long time looking for promising real estate opportunities with significant value-add potential in Bern, and our diligence has paid off.
The property is located at the Schauplatzgasse 22, only a stone’s throw away from the Federal Palace and Bern’s train station (the second busiest in Switzerland), previously used as a restaurant and office space. Our mission here goes beyond a mere renovation: our vision encompasses a complete interior reconstruction and repurposing of the building, creating the opportunity to bring 8 different revenue streams under one roof and ensure maximum diversification.
The top floors of the building will be converted into high-class apartments operated by Le Bijou and cater to short-term, long-term, and special-event clients. Thanks to its extensive network with over 7’000 active members, Moonshot, our co-operator in this project, forecasts a minimum occupancy of 30%, which is a perfect complement to our apartments on the top floors.
On the underground, ground, and first floor, as well as on the courtyard terrace, we will create a high-end coworking space tailored to the needs of C-level executives. As a special and truly futuristic feature, this space will be complemented by a sophisticated automated kitchen on the ground floor, serving coworking tenants, apartment guests, and take-away customers alike. This modern interpretation of healthy fast food reduces staff costs while, at the same time, providing an all-day service to our guests.
The Schauplatzgasse 22 building
To extend the day with networking and socializing possibilities, after 6 p.m. the building transforms into a unique social club, a place where diverse minds can gather and great ideas can flourish. The social club will also regularly host events, where successful business leaders, icons, and personalities will share their wisdom through discussion groups and keynote speeches.
Today, it is becoming increasingly difficult to find attractive real estate investments in prime locations as demand seems to exceed supply by far. It is even more difficult to identify opportunities that show exceptional potential on top of that.
In this article, we have argued why we are convinced that the city of Bern is particularly attractive for real estate investments: the consistently high demand for rental properties, the city’s status as the political capital of Switzerland as well as an important innovation and business hub, and its appeal to tourists are key factors that are rarely found in other Swiss cities.
As such, it comes as no surprise that we have, again, chosen the city of Bern for one of our latest real estate projects, and we strongly advise all savvy investors to take a closer look at the numerous real estate opportunities the city of Bern offers.
