How Swiss pension funds are enriching the London skyline
The economic data indicates good investment opportunities in European real estate. According to Zurich Invest Ltd, cooperation with local experts is important, as the example of a 285 m high tower in London shows.
The signals in the European economy are green. Historically low unemployment, easing inflationary pressures and the economic stimulus packages announced give cause for optimism despite geopolitical tensions. This makes it a good time to invest in the European real estate market.
However, two things are crucial for the success of an investment: cooperation with local experts and networking in the market. Local experts play a decisive role in real estate projects. As the following example shows, this applies regardless of the market situation.
Recognize potential
In 2015, the Zurich Investment Foundation acquired the existing property at 55 Bishopsgate in the City of London together with Schroders. During the underwriting process, the local acquisition team demonstrated its in-depth understanding of the market by identifying significant untapped potential in the location. Various property strategies were already modeled during the acquisition phase. A detailed business plan that was subsequently drawn up showed ways of maximizing rental income until the main tenants moved out. At the same time, Schroders' local project development team began planning work for a new construction project with subsequent sale. The long, complex and elaborate planning phase ended in 2024 with the receipt of planning permission. The team's excellent market connections played a key role in overcoming all obstacles through negotiations with the local authorities and neighboring owners. The "London Bishopsgate" construction project was finally approved.
Develop locations
The approved project is a 285 m high tower that will be a striking addition to the London skyline. Flexible, diverse and prestigious office space will be created here on 63 floors and around 80,000 m². As B-locations, such as Canary Wharf, are less in demand, the project will offer urgently needed first-class office space in a prime location once completed.
The concept meets the latest sustainability requirements (BREEAM "New Construction Outstanding") and impresses with attractive cultural offerings on the lower floors. This not only integrates the property into the neighborhood, it also increases the attractiveness of the micro-location by creating additional offers that set positive urban accents.
Managing risks
The project is part of a broadly diversified income-oriented core investment strategy comprising 36 properties in 11 countries. A research team implements the strategies on the basis of an integrated top-down investment approach and identifies the most promising markets and sectors from a long-term macroeconomic perspective. As with Bishopsgate 55, these measures are complemented by the careful bottom-up approach of the local asset managers. The focus is always on stable income growth and the use of low leverage.
On this extremely solid basis, value-adding projects can be realized that contribute to optimizing the sustainability profile of the portfolio and enable long-term rentals at attractive rents. At the same time, the supply of space can develop in line with demand trends. In this way, vacancy risks can also be reduced.
Investment idea
The Zurich Investment Foundation offers interested investors a unique product platform with geographically focused real estate investment groups such as:
- Zurich Investment Foundation Real Estate Europe Direct
- Zurich Investment Foundation Real Estate USA
The risk-conscious investment philosophy is based on the same successful principles that we also apply in the Swiss market. The Zurich Investment Foundation's active right of co-determination, tax efficiency and governance ensure that our customers' interests are protected in the long term.
