High-End Real Estate:
A Strategic Asset for Investors
Bilan Magazine: Opinion > Investment
Commentary by Léonard Cohen – Co-founder and Chairman, LakeRock Capital
Long viewed in Switzerland solely as a symbol of prestige reserved for a select few as a primary or secondary residence, high-end real estate now deserves recognition as an investment in its own right.
This segment represents a distinct asset class within a diversified portfolio strategy and is accessible to private investors without requiring them to relocate. In an environment marked by near-zero interest rates, luxury real estate is attracting an increasing number of investors in search of yield, stability and diversification.
Having demonstrated its effectiveness as an investment strategy in the Anglo-Saxon world, this asset class offers a clear advantage through exposure to the Swiss franc, long regarded as a safe-haven currency. While Swiss franc bonds struggle to deliver returns and traditional real estate funds typically offer yields of 2–4% per annum, high-end real estate investment stands out as an option backed by a tangible underlying asset and with low correlation to traditional asset classes such as equities or bonds. Unlike traditional income-generating real estate, it is also far less dependent on interest rate movements, which are a key reference point in the valuation of conventional real estate portfolios.
Luxury real estate performance driven by market dynamics
This segment also has a unique ability to generate significant alpha: resale following renovation or development allows investors, on average, to capture an additional 600 to 1,000 basis points compared with other traditional Swiss real estate investments. The resulting yield premium resembles the profile of a high-yield bond, while offering natural inflation protection and a risk level comparable to that of traditional real estate funds.
Market dynamics further reinforce this positioning. International demand remains strong, supported by Europe’s tense and uncertain geopolitical environment, Switzerland’s political stability, quality of life and, for certain individuals, a competitive tax framework. Domestic demand also remains robust. By contrast, the supply of ready-to-occupy properties continues to shrink, and the production of new condominium units (PPE) is steadily declining despite strong demand. This has led to a structural supply shortage.
In Geneva, the majority of new housing production is focused on large-scale developments in designated development zones, with controlled rents and prices. Each year, the production of free-market housing (condominiums and villas) in the canton amounts to only around one hundred units. These types of assets are becoming increasingly rare—and what is rare, when well designed and properly developed, tends to appreciate significantly.
In a world where investors are increasingly seeking returns uncorrelated to financial markets, Swiss luxury real estate appears to be a still underexploited opportunity. Attractive returns can be achieved, notably by renovating existing properties or acquiring off-plan developments with approved building permits. Once these assets are upgraded to high-end standards, their resale enables meaningful value creation.
This asset class may well reshape established investment practices. More than a simple diversification choice, it represents a strategic component of asset allocation today—capable of delivering both stability and outperformance.
Léonard Cohen is Co-founder and Chairman of the Board of Directors of LakeRock Capital SA. A graduate of HEC Lausanne, he is also the founder and CEO of Leonard Properties, and co-founder of Realforce CRM in Switzerland and Propertyfinder.ae in the United Arab Emirates. Read more
Link to the Bilan article: High-End Real Estate: A Strategic Asset for Investors
