Growing domestic residential regulation is forcing Swiss institutional investors to rethink how they invest into the sector, while also stalling refurbishment of their current multifamily assets.

A report by the Lucerne University of Applied Sciences and Arts, called Real Estate Investments: Alice — out of Wonderland? has found regulations in Switzerland are hindering development and investment into residential real estate. It says the complexity and duration of planning applications, building regulation requirements, and new tenant protections are leading pension funds to adjust and even in some cases cease their residential investment targets and plans. This is despite the base Swiss interest rate sitting at 0.5 percent and multifamily cap rates hovering between the 2 percent and 2.5 percent mark.

According to the report — which surveyed some 208 investors — local authority planning systems are frustrating investment. 92 percent of those surveyed said