The situation has improved in commercial leasing in Switzerland –

More than two years after the start of the coronavirus pandemic, businesses can go back to paying their rent more or less normally. On Wednesday, the Federal Council took note of the third and final report on the monitoring of commercial rents.

The document takes stock in summer 2022, following reports from autumn 2020 and spring 2021. The 1,299 companies surveyed are active in industries directly affected by the work ban due to the pandemic (such as tenants of commercial real estate) or indirectly (such as landlords of commercial real estate).

Before the pandemic, about 8% of companies struggled to pay rent. A percentage that rose to 38% during the crisis, to drop to 14% this summer. Four out of five leasing companies (81%) have “none” or “more or less no” difficulty in paying commercial rent, which is confirmed by leasing companies.

Many companies have an optimistic attitude, according to the report: 58% of them consider their situation quite good, and 11% even consider it “very good”. On the other hand, a fifth of companies consider it “pretty bad”. Leasing companies felt less the effects of the crisis than renting companies.

still difficulties

These positive results do not mean the end of difficulties. Nearly two-thirds of tenants (64%) fear that the situation will get worse again during the winter. Only 13% think the crisis is completely over. In addition, when comparing their current situation with the one before the pandemic, more companies consider that it has worsened than those that say they have seen an improvement.

Almost half of the companies (43%) saw their turnover fall compared to 2019, while a quarter saw no change and another quarter saw an increase. A quarter of businesses, mostly in restaurants and retail, have had to take on additional debt due to the pandemic. Companies with less than 10 workers suffer more from a drop in turnover than larger ones.

>> Read also Bankruptcies rise in Switzerland after the pandemic

However, the report mentions a “certain catch-up effect”: this relative financial fragility of some companies may also be the counterpart of the fact that, at the height of the pandemic, they went bankrupt much less than in previous years.

Overall, although measures to combat Covid-19 were no longer in place at the time of the survey, 46% of the companies surveyed believed that they were still impacted, to varying degrees, by the crisis, while 52% said they were no longer affected.

State measures and direct agreements

This latest report also makes an overall assessment. The support measures were welcome: for 62% of tenants who received state aid in one form or another, their situation during the crisis improved “a great deal” or “considerably” thanks to this support. Tenants were the ones who most used the allowance for reduced working hours (RHT), the allowance for loss of earnings and transitory credits.

When tenants and landlords try to find a solution directly with each other, they most often find compromises. However, in two of the five cases, there was no discussion.

The agreements found concerned relatively small amounts. For two-thirds of the companies that have reached agreement, it’s been about two months of peak income in the more than two years since the pandemic began.

In addition, it leaves lasting marks on the commercial leasing market, concludes the report. A good third of companies no longer negotiate their lease in the same way, namely with regard to price, lease duration and notice period.

>> Read also Due to rising prices, some commercial leases are going up


Leave a Comment