Certainly the introduction of the UK's 50 per cent tax rate has created a snow flurry of demand for Swiss property, with the super rich attracted by the low tax rates, healthy lifestyle and stunning scenery.
"If you're earning upwards of £2m-£3m a year, it is probably worth your while looking at permanently residing in Switzerland to pay tax," says Jeremy Rollason, managing director of Savills affiliated Swiss property agent Alpine Homes. He reports increased demand for property, and so does the Swiss desk of Knight Frank, which currently has over 200 potential buyers on its books.
This is all very well for the wealthy, but a now private investors have a chance to play the Swiss property market another way – luxury residential developer Peach Property Group is set to list in Zurich this week.
Life's a Peach?
Headed up by youthful software whizz Dr Thomas Wolfensberger, he runs what he claims is the largest luxury residential developer in German-speaking Europe, having stepped down as chief executive of banking software giant Swissrisk in 2006.
So far, Peach has focused on the domestic Swiss market. The change in the law regarding foreign property ownership in Zurich must have hurt, although the brand is expanding into Germany and Austria. Typical properties are built on a lakeside with stunning views, private marinas and spa facilities akin to a luxury hotel (Peninsula Beach House in Zurich, pictured, is a textbook example).
Peach can also do urban. In Germany, Peach has teamed up with residential legend John Hitchcox and designer Phillipe Starck to produce Yoo Berlin, which will boast 87 designer flats with a choice of interiors and a 304-bed hotel.
It is tempting to compare Peach Properties to the UK's Candy & Candy, though Dr Wolfensberger would rather be likened to a "smaller version of Berkeley" with a target market of wealthy owner-occupiers as opposed to property investors.
Peach has completed five projects to date, funded through a mixture of debt and equity from wealthy backers including the Canton Bank of Lucerne, and has a further 14 projects under development. Half are in Switzerland; half are in Austria and Germany. These projects are forecast to yield profits of 146 million Swiss francs (£94m) over the next five years, equating to an average margin of 23 per cent. However, there is a potential pipeline five times that size - hence the need for a public listing.
Peach is aiming to raise 53 million Swiss francs (£34m) on the Zurich exchange, and hopes to be supported by European institutional investors including Fidelity. It has identified 26 future development sites for new projects with a saleable area of 439,000 square metres, which it will secure with the proceeds of the listing. These includes Swiss schemes in Zurich and Schwyz; four in Germany and one in Austria. Most offer lake or river frontage, spa and marina facilities and other leisure extras.
Although property ownership is relatively low in Switzerland and Germany (35 and 40 per cent respectively), Dr Wolfensberger says: "We fundamentally believe there is a premium for ownership." Of Peach's current buyers, 48 per cent are German, 10 per cent Italian, and 7 per cent Swiss. Three quarters of buyers are over 40, and half are above 50 which gives a clear idea of the target demographic - ageing, wealthy professionals on a health kick. Whether this will be mirrored in Peach's shareholder's register next week remains to be seen.
