The star of St. Moritz is on the rise. Since the late 19th century, this quaint Alpine resort in Switzerland’s Engadin Valley has been the place to see and be seen. Considered the birthplace of luxury winter tourism, it has been the snowy playground of international royalty and the fashionable jet set, where Jackie Onassis, Charlie Chaplin and Gunter Sachs would disport themselves on immaculate slopes before indulging in serious après-ski at 1,770m up.
Today, St. Moritz is still the place to rub fur-clad shoulders with the rich and famous, from supermodels Naomi Campbell and Claudia Schiffer, to actor George Clooney and singer Tina Turner. Steel magnate Lakshmi Mittal owns a palatial chalet on the elite Suvretta Hill, next door to British star architect Norman Foster. The world’s most exclusive designer boutiques twinkle along the iconic shopping street Via Serlas, while wealthy visitors can enjoy caviar and truffles at one of the five Michelin-starred restaurants in the village. Meanwhile, the winter sports calendar is packed with glamorous events, from the annual Cartier Polo Match played on the resort’s frozen lake, to this year’s FIS Alpine World Ski Championships, where skiers raced downhill at a mind-blowing 140km an hour.
But chill winds are blowing for Switzerland’s ski industry. According to estate agent Savills, Switzerland has seen ski visitor numbers decline 17 percent in the last decade. “The large baby-boomer demographic is now at the upper end of skiing age and the millennial generation have a lower propensity to ski,” said Savills in a note. “The ever-growing range of leisure options for this generation is spreading the prospective market even thinner.”
With the strength of the Swiss Franc, St. Moritz has been feeling competition more than ever from high-end French resorts such as Megeve, Verbier and Courchevel 1850. A weekly ski pass in St. Moritz is the most expensive of all the Alpine resorts, priced at an eye-watering €365, compared to €227 at Courchevel 1850 (which has almost double the length of pistes). Unsurprisingly, property in St. Moritz is also the least affordable, according to Savills, with prices that would make even the super-rich baulk. €1 million will buy you just 44 square metres in St. Moritz, the size of a modest ski boot room, according to Knight Frank. Compare that with rivals St. Gervais and Chamonix, where a buyer would, in comparative terms, acquire an almost palatial 143 square metres and 95 square metres respectively for the same investment.
There is a reason for this skew. In 2012 a property law called Lex Weber was enforced in Switzerland, capping second-home ownership by foreigners at just 20 percent of a development, in units no larger than 250 square metres. It severely limited the number of buyers in an already discretionary market and it meant that transactions and new stock slowed to a trickle.
But 2017 marks a turning point for St. Moritz, according to real-estate investment manager and local councillor Leandro Testa. Last month, a new rule was voted in that flings open the foreign property quota from 20 percent of a development to 100 percent.
This change has, in essence, three effects, says Testa. “Now, if a non-Swiss national receives a foreigner’s permit from the Canton of Graubünden, any secondary home in St. Moritz can now be sold to them.” In addition, foreigners can buy a single family home, and can resell their property to either a Swiss resident or a foreigner, both of which were disallowed from foreign buyers previously.
“The reason why this was decided by the town council of St. Moritz is that the recently introduced Lex Weber does not allow us in St. Moritz — currently our secondary home share is 58 percent — to build and sell any more secondary homes. By raising the foreigner’s quota from 20 to 100 percent we give the real-estate market a little more flexibility,” said Testa.
The move coincides with a launch by Greek-owned hospitality group Grace Hotels, which is redeveloping and restoring the 110-year-old La Margna Hotel. As well as a five-star boutique hotel, Grace will add 17 serviced freehold apartments to the St. Moritz property pool due for completion in 2019. Apartments will range from one to four bedrooms, as well as a two-bedroom mezzanine penthouse priced at CHF9.9 million. Residents will have views over the iconic lake and full access to the Grace St. Moritz hotel’s amenities and 24-hour concierge.
Owners can earn revenue by renting all or part of it back to hotel guests when not in residence, says Gareth Zundel, a spokesperson for the development, while Grace Hotels will take care of all the servicing, maintenance and marketing to guests. Already around half have been spoken for, said Zundel. “The [St. Moritz] market is relatively illiquid and the redevelopment of La Margna hotel into luxury residences and a boutique hotel by Grace offers a rare new-build buying opportunity,” said Savills.
The interesting thing about the offering is that as serviced apartments run by a hotel, they come under the classification of commercial property. “That means that as a buyer you are unrestricted in the size or quantity of the apartment,” said Alex Koch de Gooreynd, a partner at Knight Frank, which is acting as broker for the Grace apartments. “The whole resort is very excited about it as there has always been very limited stock in St Moritz. It will be a game changer.”
It could have more broad-reaching ramifications. The launch or refurbishment of top- branded hotels sold as serviced apartments – under the guise of being commercial property — will be a precursor for wider gentrification in Switzerland, reckons Koch de Gooreynd. ‘Aparthotels’ such as the Grace Hotel in St. Moritz will “spur regeneration and cement their position as premier ski destinations”. A new era for this quaint Alpine town could foretell a more open future for the Alpine nation.
For more information about Grace St. Moritz, click here.