Commercial Space
Accelerated structural change
Mario Schwaiger
Head of Retail Properties EHL Gewerbeimmobilien GmbH
The retail trade and gastronomy have been unable to disengage from the effects of a weak economy and consumers reluctance to spend. These trends are reflected in increasing tenant turnover and rising pressure on rental prices for ground floor space in apartment buildings at prime locations. In less attractive locations, the search for alternative uses is becoming more and more urgent.
Offside the large, high frequency shopping streets, commercially used ground floor space currently poses a challenge. The continuing economic weakness and the downward trend in consumer spending have intensified this situation over the past two years and accelerated the structural transformation and the steady decline in retail space.
frequent but there are a few examples of new rentals or contract extensions at satisfactory conditions. Generally speaking, the interest in good locations in the districts outside the beltway is satisfactory – in Favoriten (10 th District) near the main railway station and in the western beltway districts from 1160
Ground floor space can be successfully transformed into offices if the environment is right. Young entrepreneurs and firms in the creative industries, in particular, are open to such concepts. Short-term lodgings are another story that is usually addressed under the keyword Airbnb. If this is legally permitted at a location and the technical requirements (primarily sanitary facilities, modern heat- ing) are in place, these types of locations – especially when they are near subway stations and/or touristic hotspots – can generate very satisfactory income. If none of these possibilities appears realistic, alternatives should be considered to make the ground floor areas usable at least for the tenants in the investment property apartments. Ground floor storage space and storerooms for residents generate only limited rental income but require minimal investments and can increase the value of the apartments.
to 1190. In the other districts, the market acceptance has also become difficult for good locations.
The conse- quences for investment property owners are different: The absolute top
The absolute top locations in the inner city have lost none of their attractiveness.
This situation is par- ticularly challenging for
locations in the inner city – for example the Golden U, Kärntner Strasse – Graben – Kohlmarkt – have lost none of their attractiveness. In other well established shopping streets like the Mariahilfer Strasse (6 th /7 th District) or Landstrasse (3 rd District), tenant turnover has become more
secondary locations and quarters with little relevance for retail trade and gastronomy. A candid market analysis will frequently reveal the advantages of looking for other uses as a better alternative to charming convention- al retailers or gastronomy operators with low rents or investment subsidies.
Vienna | 2024
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