Investment
Reserved interest in retail properties
Franz Pöltl FRICS
Managing Partner EHL Investment Consulting GmbH
Buyers‘ interest in large-scale Austrian retail properties was low before the pandemic and has still not recovered. There are currently no significant transactions for shopping centres or retail parks, and the same is true for larger properties on the major shopping streets in Vienna or the provincial capitals. One exception, however, is the ground floor space in mixed use properties when it is rented over the long term, for example, to strong food retailers.
A clear downward trend in the transaction volume is also evident in other market segments, but the investment market for large-scale retail properties is a very special situation: Investors have followed a generally cautious approach for more than four years, and confidence is still negatively influenced by the numerous bankruptcies of international chains. Another factor is the steady rise in interest rates and the related upward push on yields.
Prime yields currently equal roughly 5.75 per cent for retail parks and nearly 5.5 per cent for shopping centres. These values are, however, not really verified by actual transactions and reflect, at least in part, the price expectations of sellers more than the expectations of potential buyers. Other negative factors for investments include the generally difficult climate for the retail trade, which
Office and retail yields 2015 - 2024
7 %
6 %
5 %
4 %
3 %
2 %
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024*
Retail (Retail park)
Retail (Shopping mall)
Retail (High street)
Office
*Forecast, Source: EHL Market Research | Q3 2024
24
Retail Market Report
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