Insights from IMMO26 and outlook for 2026 in Swiss real estate financing

Introduction

Once again, Artemon was represented at the IMMO trade fair in 2026 as an exhibitor for subordinated real estate financing. From numerous high-caliber presentations by a wide range of industry stakeholders, as well as through exchanges with clients, investors, and visitors at IMMO26, we gained two key impressions: on the one hand, a stable and optimistic real estate market outlook for 2026, supported by investors who raised a record amount of capital last year that must be deployed in 2026. On the other hand, a financing market that remains in a phase of structural adjustment - marked by growing challenges but also new opportunities, particularly for specialized capital providers.

Capital discipline moves into focus

Looking back, several presentations clearly illustrated how profoundly the market environment has changed over the past ten years. While in the past properties were sometimes acquired at high prices and could still be sold profitably up to 2021, a noticeable turning point followed from 2022 onwards: rising construction costs, increased regulation, and a generally more demanding financing environment.

The disappearance of Credit Suisse has further accelerated this development. Debt capital has become scarcer, financing in general more selective, and complexity - especially in project development - has increased significantly. Basel III, higher minimum reserve requirements for banks at the SNB, and stricter supervision by FINMA have a cumulative effect. This is particularly evident for highly leveraged income-producing properties and development projects. While Switzerland thus confirms its role as a regulatory “model student,” this has direct implications for the availability and pricing of debt capital. Another catalyst mentioned in a presentation is the gradual withdrawal of foreign banks from the Swiss market in recent years, partly due to the very competitive terms offered by domestic banks. As these banks now behave more conservatively, financing from foreign banks is also missing in parts of the market.

Residential remains emotional - commercial properties gain further importance

Despite all challenges, residential real estate remains the dominant topic. Housing is not only economically relevant but also emotionally charged - it addresses a basic human need and therefore often attracts public attention. This has direct consequences for project developers: political communication has become significantly more important. At the municipal level, the general sentiment toward new projects is often critical, as described in one presentation. At the same time, objections to construction projects are increasing, approval processes are taking longer, and time to market is being extended. These factors not only increase project durations but also financing risk - an aspect increasingly avoided by traditional banks.

In parallel, commercial properties are increasingly coming into focus for institutional investors. After years of restraint, capital is once again being allocated to this segment - albeit under significantly higher requirements in terms of specialization, asset quality, and management expertise.

More equity, more selective debt capital

A recurring conclusion at IMMO26 was that project developments today must be backed by significantly more equity. The supply of debt capital has not declined across the board, but selectively - particularly for complex, non-standardized financing structures.

While Swiss banks continue to offer very attractive margins by international comparison, these primarily benefit low-risk, stable cash-flow assets. In selective segments, a de facto financing bottleneck is emerging, driven less by interest rates and more by capital availability and regulatory or balance-sheet-driven risk selection. This is precisely where private debt continues to gain importance. 

Private debt and new investor structures

In the private debt space, it became clear that the segment continues to grow strongly, addressing, among other things, the above-mentioned need for more equity in the form of mezzanine capital. At the same time, new opportunities are emerging - such as the admission of investment foundations for project developments, which broadens the investor base and enables institutional capital to enter earlier in the value creation chain.

2025 was also a record year for capital increases. Newly capitalized companies are once again acting more actively - and in some cases more aggressively - on pricing. The additional equity serves not only growth but also the reduction of loan-to-value ratios.

Focus, quality, and niche strategies

The second day of the trade fair was entirely focused on operational reality: income must be optimized within existing portfolios. Quality is measured by substance, location, and sustainable development potential. In many portfolios, there is also a significant need for capex, for which raised funds are likewise being used.

A noticeable trend is the increase in niche strategies, for example in the L-QIF space. The message was clear: focus is essential. Strategic ambiguity leads to dilution - even in the commercial real estate segment, which increasingly requires specialized approaches. Future-proof strategies are those that are clearly positioned and built from the outset on a stable investor base.

Outlook 2026: stabilization with structural change

Several trends are emerging for 2026: acquisition yields in the residential segment are likely to remain under pressure, while portfolio acquisitions - sometimes at a premium - are gaining importance. ESG was discussed controversially. In the short term, some investors do not necessarily see ESG as a return driver. For long-term-oriented investors, however, it is highly relevant with regard to lettability, capex requirements, and exit opportunities.

Private real estate debt will continue to grow - not only as a substitute for bank financing, but above all as a complement to equity with return enhancement. At the same time, new innovative financing structures are emerging in adjacent areas such as infrastructure.

The combination of persistently low interest rates, accumulated investment capital, and limited new construction volumes due to financing hurdles is likely to result in continued low acquisition yields in 2026. As a result, competition for high-quality assets will intensify further.

Conclusion

The market has become more demanding, more capital-intensive, and more selective. For focused players with structuring expertise, strong capital bases, and a clear understanding of risk, however, attractive opportunities are emerging precisely now.

Disclaimer
This commentary is provided for informational purposes only and does not constitute an offer or solicitation to buy or sell any securities or financial instruments. The information contained herein is not intended to provide investment, legal, or tax advice, and should not be relied upon in making any investment decisions. Investing in securities involves risks, including the potential loss of principal. Past performance is not indicative of future results. Before making any investment decisions, investors should carefully consider their own investment objectives, risk tolerance, and financial situation. The views and opinions expressed in this document are those of the author(s) and do not necessarily reflect the views of Artemon Capital Partners. Artemon Capital Partners does not guarantee the accuracy or completeness of the information provided herein, and disclaims any liability for any errors or omissions. Investors are advised to consult with their financial advisor or other qualified professionals before making any investment decisions.