Regulatory changes drive growth in Swiss real estate debt

Investment manager Empira Group has released a study highlighting structural shifts in Swiss property financing and the opportunities they present for investors and borrowers. 

Empira Research

New capital requirements and the UBS/CS merger are reducing financing availability above 60% Loan-to-Value (LTV). The Basel III Swiss framework was introduced in 2025, and other regulations intensify pressure on lending margins.
Over CHF 200 bn (€215 mln) in mortgages need annual refinancing. Falling LTV limits create an additional financing need of up to CHF 8 bn per year, potentially rising to CHF 21-25 bn (€22-27 bn) under stress scenarios like rising interest rates and falling prices.
Whole-loan, stretched senior, and mezzanine structures are becoming more important, offering attractive, BVV2-compliant risk-return profiles for investors. Swiss pension funds are seeking stable sources of income with moderate duration, making collateral-secured loans particularly attractive compared to BBB bonds.
This regulatory environment coincides with a large wave of mortgage refinancing. The integration of UBS and Credit Suisse reduces the balance-sheet capacity of conventional lenders, creating a funding gap. For borrowers, competition for bank debt remains tight, leading to shorter maturities and higher equity or mezzanine stakes.
Real estate private debt is increasingly establishing itself as an independent asset class in Switzerland. Alternative investors are filling financing gaps with flexible solutions, especially in the mid-market segment. With attractive yields and BVV-2 compliance, real estate debt offers a combination of capital preservation, stable cash flows, and regulatory efficiency. Market and regulatory factors suggest the importance of this asset class will continue to grow until at least 2030.