Wednesday, 15 October 2025
Empira Group’s latest ResearchView report points to structural change in property lending and a growing role for institutional investors
Switzerland’s real estate financing model is entering a new era. According to a new analysis by the Empira Group titled “Real Estate Debt in Switzerland – Financing Beyond the Banking Sector,” the country is experiencing its most significant transformation in property lending in over two decades. The report outlines how stricter regulation, ongoing consolidation in the banking sector, and a looming wave of refinancing have created a funding gap estimated at up to CHF 25 billion per year — a gap increasingly being filled by private debt investors.
Empira’s study highlights how banks, constrained by the so-called “Swiss Finish” implementation of Basel III and additional FINMA capital requirements, are becoming more selective, particularly for loans exceeding 60 percent loan-to-value (LTV). The merger of UBS and Credit Suisse has also reduced competition in the domestic lending market, tightening access to development and transitional financing.
“The financing landscape in Switzerland is changing fundamentally. Traditional bank loans no longer cover the capital requirements of many real estate projects. Here, real estate debt offers investors stable returns and borrowers urgently needed financial security,” said Lahcen Knapp, founder and chairman of the Empira Group.
The research identifies three core trends driving this shift. First, heightened regulatory pressure and bank consolidation are constraining credit availability. Second, Switzerland faces a structural funding gap, as roughly CHF 200 billion in mortgages are refinanced each year, with declining LTV thresholds generating an additional need for up to CHF 8 billion annually — and potentially CHF 25 billion under adverse scenarios. Third, private lenders and debt funds are stepping in, providing whole-loan, stretched-senior, and mezzanine capital structures that comply with BVV2 regulations while offering higher yields.
These developments are opening new avenues for institutional investors, particularly pension funds, to expand their portfolios with secured, income-generating strategies. For borrowers, they provide alternative access to capital at a time when banks are retreating from non-core lending segments.
Industry observers note that Switzerland’s debt-financing market has lagged behind the US and UK, where non-bank lenders have long played a major role. However, as regulatory tightening and refinancing pressures persist, the Empira Group expects real estate debt to establish itself as an independent asset class in Switzerland.
“The coming years will mark the breakthrough of real estate debt in Switzerland,” said Knapp. “We anticipate it will become a permanent and integral part of property financing.”
Empira’s findings mirror broader European trends identified by analysts at BNP Paribas AM and Swiss investment managers such as Artemon, who report rising demand for private debt products amid stricter bank regulation. With an estimated CHF 200 billion refinancing volume each year, Switzerland’s property market appears poised for a lasting shift toward alternative capital — one that could redefine how projects are financed and portfolios structured in the decade ahead.
