Top of the world: St. Moritz in Switzerland

Grace St Moritz balcony

An unrivalled quality of life. The birthplace of winter tourism. Iconic resorts. Over 300 kilometres of piste. Michelin-starred gastronomic experiences. The playground of the rich and famous. All this makes up just a fraction of what makes ski town St. Moritz one of the most coveted destinations in the world. Alpine luxury doesn’t get better than this—it’s rivalled only Gstaad and Courchevel—and after Switzerland implemented its Lex Weber regulations limiting overseas ownership of ski properties to 20% of an existing town, it doesn’t get rarer. With existing ski stock for sale at essentially zero, Grace Hotels steps into the breach with its Grace St. Moritz Apartments.

Safe Haven

Switzerland made headlines a few years back by finally agreeing to comply with international banking rules and put an end to its notorious “privacy” policies that cultivated money laundering and tax evasion. Since then, it’s been in the news as becoming an increasingly popular destination for wealth management and protection in the wake of Brexit, picking up some of the UK’s former business. A strong Swiss Franc, respectable financing rates, low cost of entry into property and favourable tax laws have generated a great deal of attention from investors keen to get a foothold in the Swiss residential sector without residency requirements. Recent buyers are interested because of, “The fragility of the global economy and [an] era of political unease,” begins Robert Swade, CEO at Grace Hotels. “As noted in Knight Frank’s Inside View Report 2017, Switzerland is arguably the world’s ultimate safe haven, and as a result, continues to attract new residents drawn as much by the security, privacy and educational facilities it offers.”

Grace St Moritz winter

All this despite the fact that, “Switzerland is largely closed to overseas purchasers due to national legislation and a quota system at cantonal level, which caps second-home ownership by foreigners,” says Swade. The 2015 Lex Weber referendum was designed to protect the country’s heritage, and the ski towns that make it so appealing, but it also forced the market to dry up almost overnight; there is no ski stock to buy. Nonetheless, Asian investors, particularly from China are looking to Switzerland due to Chinese real estate flirting with unaffordability in first-tier cities, and outbound capital caps have not reduced demand for overseas real estate, “Especially in locations which can offer wealth preservation such as Switzerland,” notes Swade. The pristine landscape, year-round recreation and rich history helps. 

You might also be interested in:

>> Switzerland—the next investment destination

>> Investment potentials in ski resorts

According to Credit Suisse, Swiss property is benefitting from a general recovery in the economy, with owner-occupier residential prices on the rise, demand strong, supply limited and the bank predicting price gains of up to 2.5% this year. Key cities—Zurich, Basel—were experiencing high demand, as were resort homes, which also boasted the highest prices in the country according to Engel & Völkers. Freehold apartments in Gstaad averaged CHF35,000 per square metre (HK$27,000 per square foot). “Sustained demand in St. Moritz resulted in consistently high property prices. Chalets and mansions in the most desirable locations reached sale prices starting at CHF6.2 million in 2017. Freehold apartments in very good locations… achieved prices per square metre from CHF20,000. Last year the Lex Koller [general acquisition regulations for non-nationals] legislation was temporarily suspended in St. Moritz. Since then, foreign buyers too have been able to buy second homes with a maximum gross interior area of 250 square metres without restriction,” noted Engel & Völkers in January.

Grace St Moritz junior suite

Grace St Moritz bathroom

Safe Entry

The timing for Grace St. Moritz Apartments’ entrance is ideal. Located in central St. Moritz, a few minutes from the highest shopping district in the world (1,800 metres), on Via Serlas and overlooking the Engadine valley and lake, the forthcoming development will be a restoration of the 1905 La Margna hotel by Grace Hotels. When complete, Grace St. Moritz will feature a modern addition to the original building, and 17 one- to four-bedroom apartments.

Grace St Moritz lobby

“The purchase of a Grace St. Moritz Apartment is exempt from the restrictions and limitations that generally apply to the sale and purchase of Swiss real estate by non-Swiss nationals. Grace Hotels worked closely with the local authorities to establish this rare structure. Under certain rules and regulations, hotels may be renovated and turned into secondary residences. The serviced apartments shall be run by Grace Hotels and come under the classification of commercial property; hence a buyer is unrestricted in the size or quantity of the apartment. Grace St. Moritz Apartments is the first such development for St. Moritz.”

The refurbishment will retain many of the original building’s Belle Époque and Engadine cultural elements while offering owners access to the Grace St. Moritz Hotel’s spa, gym, food and beverage options, concierge services and 24-hour security, with some of the world’s best year-round recreation including hiking, paragliding, mountain biking, golfing, windsurfing, tennis and sailing on the doorstep. And yes, the Lex Weber laws have put Grace St. Moritz Apartments on the receiving end of intense investor attention. As the branded residences are a unique concept to the area, all the apartments will be entered into the rental pool, managed and marketed by Grace; owners get 40 days per year. “Because Grace St. Moritz Apartments are exempt from the national restrictions that apply on the sale of real estate in Switzerland by foreign nationals, this proposition means that buyers can benefit from long-term capital growth, while earning rental income throughout the year,” finishes Swade. Grace St. Moritz Apartments is scheduled for completion in 2019 and prices begin at CHF640,000 (HK$5.3 million).  

St Moritz

>> Previous issue: Taiwan's levelling off