K. O. Analysis


The K. O. analysis is also a very important instrument in Switzerland.

The K. O. analysis is an important instrument for depicting particularly negative characteristics. It comprises:

  • Analytical value (= TARGET value)
    • Those values that satisfy the respective criteria of the specific property for purchase applied as analytical values.
  • K. O. value (= ACTUAL value)
    •  K. O. threshold values state the minimum values that make the analysed real estate acceptable to potential buyers.
    • The factor 100 is applied to the so-called “compulsory” values.

Types of K. O. Analyses

The following K.O. analyses must be conducted

  • K. O. analysis of the market and use
  • K. O. analysis of the law
  • K. O. analysis of the category of buyers for the subsequent sale (e.g. exit).

The K.O. analysis is usually the stage that precedes the labour-intensive and costly due diligence.

K.O. analysis of Real Estate from a Physical Perspective

The K. O. analysis of a physical property is conducted by juxtaposing factor-based ACTUAL and TARGET values.

The following table – which is not intended to be exhaustive – shows the structure of a hypothetical analysis of weak points.

K. O. Analysis physical


  • Street / No.
  • Postcode / Town/City/Village

K.O. criteria

Analytical Value % (ACTUAL)


K.O. Value % (TARGET)

Floor space (size of property)



Floor plans (multiple-use property)



Vacancy rate



Yield trend



Competing properties in the vicinity (at the planning stage / nearing completion)



Transport connections



Suitability for use



Technological suitability



Long-term appreciation



Development potential



Tenant’s creditworthiness



Contract management



Operating costs



Maintenance costs






K. O. Analysis of Real Estate from a Legal Perspective

The K.O. analysis from a legal perspective comprises:

  • asset deal or share deal decision
  • hard and soft facts that speak for or against the acquisition of real estate

K.O. Analysis legal


  • Street / No.
  • Postcode / Town/City/Village

K.O. criteria

Analytical Value % (ACTUAL)

K. O. Value % (TARGET)




Type of property

  • Construction under the right to build
    • Exit risks in the event of a property slump
    • Refinancing risks
  • Co-ownership share
    • Controlling position?



Type of use

  • Building land (incl. properties scheduled for demolition) and unfinished building
    • Development
    • Immediate option to construct superstructure
  • Commercial or mixed use property (commercial/residential)
    • Purchase restrictions for property funds + investment trusts



Land Tax Planning

  • Cantonal location and taxation system
    • Preference for real estate in cantons with two-tier system?
    • Tax factors based on holding period?
    • Assessment of land tax?
  • Choice of Property
    • Tax exempt management rather than investment properties which are liable to land tax?




  • Transparency







  • Deferred taxes (Yes / No)
  • Willingness of vendor to accept a reduction in the share purchase price



Anyone who buys a property which investment funds and investment trusts are not permitted to purchase or is subject to purchase restrictions must expect to be faced with a (much) reduced category of potential buyers in the event of a resale. – Well-known examples are minority holdings in attractive and valuable residential superstructures, shopping centres and the like, which required a great deal of effort to sell and then only with price reductions. There are also various modern mixed use (commercial/residential) areas of real estate, which pension funds are not permitted to buy due to their commercial and residential share structure.

A manifestly negative degree of individual factors usually results in the buyer withdrawing from the purchase, unless he has the expertise to enable him to turn the negative analytical value into a positive one or his business case is about the change. The valuation of the real estate naturally takes the negative analytical value into consideration with a price reduction.

The buyer of real estate in Switzerland or a stake in a company with real estate in Switzerland would be well advised to make sure that both K. O. analyses are conducted. – The K. O. analyses also provide an essential basis for the EXIT strategy of the professional real estate investor.

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