Market Commentary September 2025

The SNB reaffirmed its core mandate: domestic monetary policy and the safeguarding of price stability. “Everything else, such as customs negotiations, is not within our remit,” emphasized SNB Director Tschudin. Swiss Prime Site issued a €500 million bond—remarkable given that it is denominated in euros rather than Swiss francs. While the coupon appears market-appropriate, the question remains whether the costs of such a transaction are justified. The background: financing conditions in Switzerland remain tight. UBS cannot service all large corporates, and the debate is growing as to how large a single real estate portfolio in Switzerland should become—since greater size brings not only advantages but also risks. Despite economic uncertainties, mortgage rates have hardly moved. Over the medium term, interest rates are expected to remain low. After a strong run and reaching new highs, the listed Swiss real estate market paused in September. One possible reason is the high volume of new investment opportunities (over CHF 3 billion in capital increases so far in 2025), new IPOs, and unchanged Swiss interest rates. Abroad, however, the picture looks far more challenging: German open-ended real estate funds recorded net outflows of €889 million in July—the highest level since the global financial crisis of 2008. In total, outflows now exceed €12 billion. Back in Switzerland, sustainability is once again in focus. UBS announced that, as of 2026, it will no longer participate in GRESB with its Swiss real estate vehicles. This creates difficulties for investors who have so far used GRESB participation as the sole sustainability criterion for determining investability. Once again, it underscores that sustainability cannot be addressed through a simple binary yes/no scheme. 

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