Residential properties in medium-sized towns: a forward-looking real estate strategy for pension funds
Back to overviewResidential real estate investments in medium-sized towns offer pension funds an attractive long-term investment strategy that focuses on affordable housing and is resilient to increasingly stringent regulations.
Thanks to digitalisation and flexible working models, it is now less important to live close to the physical workplace. At the same time, tenants expect higher residential quality and more affordable housing. Many households have lost interest in expensive cities, while medium-sized towns with access to transport links are becoming more popular.
Affordable housing – a key objective
The shortage of housing in big cities has pushed up rents and increased political intervention. Medium-sized towns, on the other hand, offer a more balanced housing market. With lower land and property prices, rents are more affordable for a wider range of people. And, thanks to good transport links, it’s easy to commute to jobs in the big cities.
Extensive demand and stable returns
From an investor’s perspective, the appeal of residential property in medium-sized centres can be primarily attributed to stable demand. The following factors are key in this regard:
High demand among young professionals, families and mobile workers.
Moderate rental costs for households mean lower risks of default and non-payment.
Lower fluctuation in rent prices compared to large cities.
Pension funds thus focus on stable returns rather than maximum rent levels. In this respect, residential properties in medium-sized towns offer an attractive risk-return profile.
Quality of stay as a value driver
Alongside accessibility, the quality of the immediate residential environment is playing more and more of a role. Factors like noise pollution, green spaces, and social image affect rentability and tenant stability. Properties in locations with a high quality of stay generally see less tenant turnover, lower vacancy rates and greater financial commitment – characteristics that have a long-term stabilising impact on value.
Lower regulatory risks
In big cities, housing shortages and political pressure have driven increasingly strict regulations. Pressure to intervene is lower in medium-sized towns, making development and renovation projects easier to plan. For long-term investors such as pension funds, this means more legal certainty and more stable investment conditions.
Benefit from non-cash contributions
The Residential Real Estate Switzerland, Medium-Sized Towns investment group offered by the Avadis Investment Foundation focuses on residential properties in medium-sized towns and conurbations of large cities. Priority is given to properties in locations offering attractive residential quality and moderate rents. Transfer your direct real estate holdings to the investment group as a non-cash contribution and benefit from a number of advantages.
