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The Retail Market in Vienna
Exceptional boom in the luxury segment
at least a very good opportunity to strengthen the tenant structure and, possibly, to improve rental income. The sound development of this top segment is supported by several factors. Global luxury brands have, to date, been largely untouched by the we- akening economy. Online competition is relatively unimportant for the traditionally stationary players in this segment and, not least, the rapid recovery of city tourism is extremely important for traditi- onal brick and mortar retail where international customers are responsible for substantially more than 50 percent of turnover. An added factor is the significant surplus of demand over the short supply, especially at top locations, that has characterised the market for many years. Numerous potential tenants have
The generally tense situation in the retail sector and, subsequently, on the market for retail space has in no way affected all submarkets. The luxury segment, in particular, has remarkably escaped the downward trend triggered by rising inflation and the weak economic climate. In Austria, Vienna has been the main beneficiary – and here, notably, the Inner City which is currently enjoying an exceptional boom. This boom has not only been felt in the “Golden H“, formerly the “Golden U“, which is formed by the Kärntner Strasse / Graben / Kohlmarkt, but also in the smaller alleys and less glamorous streets in the city centre where demand is also robust. In these areas, the loss of an existing tenant raises little concern over a longer term vacancy and is
Retail space (in sqm) and vacancy rates (in %) in Vienna`s high streets
250,000
18 % 16 % 14 % 12 % 10 %
200,000
150,000
10.4 %
7.2 %
8 % 6 % 4 % 2 % 0 %
100,000
4.2 %
4.1 %
50,000
Favoritenstrasse
Innenstadt
Landstrasser Hauptstrasse
Innere Mariahilfer Str.
Vacancies
Retail
Retail-related
Vacancy rate (in %)
Source:
2022/23
8
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