Finding a high-potential residential property in a major Swiss city is still possible. A prime example is this aging building in Lausanne, acquired by the Dominicé Swiss Property Fund (DSPF), which underwent a complete reconstruction, increasing by 2.4 times its rental surface. A successful strategy, as all apartments were quickly leased at prices exceeding the neighborhood average. This article explores the transformation of an urban asset into a high-value investment.
Unlocking Potential in a Prime Urban Location
Acquiring an undervalued property with strong redevelopment potential is a rare opportunity for a real estate fund, particularly in a densely populated Swiss city. DSPF seized such an opportunity with the purchase of a building at 17 Rue de La Borde, Lausanne, which was completely demolished and rebuilt to maximize its potential. The result: a high-value asset with improved returns and significant appreciation.
Strategic Acquisition Through a Long-Term Partner
In late 2016, DSPF had the opportunity to acquire this Lausanne property through its long-standing partner, de Rham SA. According to Jean-Jacques Morard, CEO of de Rham SA, the previous owner—a cleaning company—planned to relocate and entrusted de Rham with an exclusive brokerage mandate for the sale. A thorough property analysis revealed underutilized building rights, indicating significant potential for development.
“We immediately recognized the value creation potential on this site,” confirms Maureen du Sordet, Head of Real Estate Development at Dominicé & Co – Asset Management, who oversaw the project.
Rue de la Borde 17, 1018 Lausanne, before demolition
Betting on a Neighborhood in Transition
Although La Borde is not among Lausanne’s most sought-after districts, its central location and upcoming urban renewal projects signaled rising investment potential. With this in mind, the fund anticipated gentrification trends and strategically invested before market prices surged.
From Demolition to a New Urban Landmark
From the outset, DSPF’s strategy was clear. The building, constructed in 1945, was outdated, and its unused development rights made simple renovation and building elevation inadequate. The property was purchased with a clear objective: demolish and rebuild to fully capitalize on the site’s potential.
The original 927 m² structure, housing seven apartments and two office spaces, was replaced by a modern 1,456 m² building, now featuring 29 apartments ranging from studios to 2.5-room units, as well as two commercial spaces. According to Maureen du Sordet, this transformation turned an obsolete building into a high-performing real estate asset, delivering 22 additional apartments, some with large terraces.
View of La Borde neighborhood, during demolition
Proactive Management of Urban Development Challenges
Large-scale redevelopment projects in city centers often face public opposition. The DSPF team adopted a transparent approach, engaging in early dialogue with local residents to address concerns before they escalated into formal objections. This strategy helped mitigate resistance, and no associations filed objections—a rare outcome for such a project. Since the original building had no architectural or historical significance, municipal authorities did not intervene.
Navigating a Complex Construction Process
The project was entrusted to Bernard Nicod, a general contractor with extensive experience in urban redevelopment. According to Maureen du Sordet, the collaboration was effective, despite the typical adjustments required in a complex city-center reconstruction.
Demolition and reconstruction in urban areas present logistical and regulatory challenges, requiring specialized expertise across multiple trades. Building on a vacant lot allows for greater flexibility, better cost control, and streamlined timelines, which are not always possible in city-center projects.
Despite these challenges, the project was completed within schedule. Construction began in May 2023, and the building was delivered in January 2025, a total duration of 20 months, including four months for demolition. The project involved 31 local SMEs, 8 subcontractors, and over 150 workers.
Sustainable Development and Energy Efficiency
Committed to sustainable construction, Dominicé chose the Minergie standard for the new building. This decision increased costs by approximately 5% compared to a conventional project but is financially justified in the long term. Lower energy costs allow for slightly higher rents, improving rental income and quickly offsetting the initial investment.
Solar panels on the rooftop, new building
The building now operates with minimal CO2 emissions (1.38 kg C02/m2), featuring solar panels on the roof and an optimized thermal envelope to reduce heat loss.
Demolishing vs. Renovating: The Environmental Debate
Is demolishing a building truly more sustainable than renovating it? This question was carefully considered during the project’s planning phase. In this case, the building’s condition was too deteriorated to justify a heavy renovation, which would have required significant investment without achieving the same energy efficiency as new construction. The difference in gray energy consumption between renovation and reconstruction was, therefore, negligible. Beyond energy considerations, land use optimization was a crucial factor. The redevelopment provided much-needed housing in an urban area, addressing increasing demand.
“This project is not only about energy efficiency. It also delivers a significant social impact, a key factor in our ESG approach,” says Maureen du Sordet.
Strong Financial Performance: A 4.5% Gross Yield
The property was acquired for CHF 4.3 million in late 2016, with an additional CHF 8.3 million allocated to reconstruction. Despite unexpected cost adjustments, the final budget remained within projections.
Today, the building generates CHF 575,880 in annual rental income, delivering a gross yield of 4.5%.
View from the rooftop of the new building, Rue de la Borde 17
High Demand for New Apartments in Lausanne
When units were put on the market in mid-2024, they were leased swiftly and at market rates for new buildings in Lausanne. The ground-floor commercial spaces, totaling over 200 m², are also in advanced leasing negotiations.
Why not convert these commercial spaces into additional apartments? According to Maureen du Sordet, ground-floor residential units would have been harder to rent, and commercial activity enhances the neighborhood’s vibrancy. This decision aligns with urban renewal efforts and responsible property ownership.
View of the new building Rue de la Borde 17
Scaling the Model: Future Opportunities?
Could this successful redevelopment strategy be replicated in other buildings within the neighborhood? While several properties require renovation, current market conditions pose challenges.
According to Maureen du Sordet, acquisition prices remain too high to ensure sufficient profitability. However, regulatory changes could alter the landscape.
Jean-Jacques Morard of de Rham SA highlights the new Vaud energy law, which will require significant investments in sustainability upgrades. In areas like La Borde, where many buildings are aging, these costs may encourage owners to sell at more competitive prices.
If the market shifts in this direction, DSPF will be closely monitoring potential opportunities, confirms Maureen du Sordet.
