Switzerland: The real estate market defies the turnaround in interest rates

Zurich Real estate lives up to its reputation as concrete gold even in the current environment of high inflation and rising interest rates – at least in Switzerland. At least that’s what Kathleen McCarthy, co-head of Blackstone’s global real estate business and responsible for $550 billion in investor funds, is convinced of.

“Real estate is a hard – i.e. inflation-protected – asset class,” she says in an interview with the Handelsblatt. This applies in particular to the inventory. “Due to inflation, construction costs have risen substantially. That makes existing buildings more valuable.”

However, not all types of real estate are equally suitable: “Real estate only acts as a hedge against inflation if you have the option of rent adjustments,” says McCarthy. In addition to residential real estate, she particularly recommends investments in warehouses and hotels. In times when investors can no longer blindly rely on price increases, the return on regular income streams comes into focus.