What does commercial premises cost in Switzerland?

Rent per square metre: what the figure covers

Commercial rents in Switzerland are expressed in francs per square metre per month, sometimes in francs per square metre per year in listings from international agencies. Confusing the two units shifts the budget by a factor of twelve: the most frequent mistake when reading listings.

The within-canton spread almost always exceeds the between-canton spread. A cantonal average serves as a benchmark for whether a price is plausible; it never replaces a comparison at street level.

The billed area is not always the usable area. Check what the contract includes: storage, sanitary facilities, basement, share of common areas.

Service charges

Heating, hot water, electricity for common parts, caretaking, maintenance of technical installations, street levies. They are owed only if they have been agreed, and they are added to the net rent in an order of magnitude ranging from a few per cent to more than fifteen per cent, depending on the age and equipment of the building.

A unit in a recent building with mechanical ventilation and air conditioning costs more in service charges than an older one — which the net rent does not tell you.

Commercial electricity

This is the second cost item of the premises, and the only one whose price varies strongly from one municipality to another in Switzerland, because each grid operator applies its own tariff. The gap between the cheapest and the dearest municipalities is of the order of double for the same consumption profile.

An energy-hungry business — catering with a kitchen, bakery, fitness centre, refrigerated shop — is well advised to bring this parameter into the choice of municipality, not only into the choice of unit.

The initial fit-out and the deposit

Fitting out a bare unit varies considerably with the activity: an office or a clothing boutique calls for an investment per square metre bearing no relation to a professional kitchen or a bakery lab, where technical installations dominate the budget.

The rent guarantee amounts in practice to three to six months of rent, tied up for the whole term of the lease. It may take the form of a blocked bank deposit or of an insurance surety, whose annual premium is often preferable to tying up cash at start-up.

The rent-to-turnover ratio: the only measure that counts

The cost of the premises is judged as a percentage of turnover, not in francs. That ratio varies strongly with the activity, because the gross margin varies: a low-margin activity bears only a low ratio, a high-margin service activity bears more.

The practical rule is to compute the ratio on prudent turnover — the low scenario — and not on hoped-for turnover. A rent that is only bearable in the best scenario is a rent that is too high.