Market Commentary July 2024

With the ongoing developments in interest rates and the generally favorable climate in global markets, the real estate market remained positive in July. The appreciation of the Swiss franc, amidst increasing political tensions in European industrialized countries like France, has many market participants hoping for another rate cut by the Swiss National Bank (SNB) this coming September. The economic situation is very fragile, and corporate results are leading to increased market volatility in the short term. In the first six months of the year, numerous issuances with various goals were conducted. This trend is likely to continue in the coming months, even though investor requirements have increased and investments are becoming more targeted. An example of this is the large capital increase of Swiss Life's real estate fund, which according to official statements was 100% placed. Given the large number of sellers at the issue price, it is very likely that the insurer itself has subscribed to many shares. If this is the case, it could slow down the product's development in the medium term. Due to the already very high prices of residential real estate funds, which show a premium of over 40%, various analysts are seeking alternatives. As a result, portfolios like that of Plazza are now considered more interesting due to their potential and fair valuation. The market remains dynamic, even in Europe. Recently, it was announced that BNP Paribas intends to acquire AXA IM. Some half-year results of real estate stocks will be published in August, where a confirmation of the previous positive reports is expected. In the long term, the real estate market will continue to benefit from the increasing demand for safe and stable investments. The shortage of housing in metropolitan areas ensures constant demand for real estate. Volatility in global markets will remain high. Investors should closely monitor these developments to make informed decisions. 

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