been waiting, in part for some time, for a location that meets corporate requirements, which means vacant space sometimes becomes the object of a real bidding war. Characteristic of the market situation at prime locations is, for example, the new rental to Van Cleef & Arpels at Kohlmarkt 1. Louis Vuitton recently moved out to take over the vacant space at Graben 20 (formerly part of Meinl am Graben), and Dior became the next French luxury brand to use this opportunity and relocate to an absolute top location at Tuchlauben 3. The demand overhang has been responsible for ri- sing rents at prime locations, while rents are stable in neighbouring areas. Square metre rents for very good space on the Kohlmarkt and Graben range up to EUR 450/sqm depending on size and are even somewhat higher for smaller units. The future outlook for the luxury segment is very positive: Europe is becoming a new hotspot for the expansion of global luxury brands, and Vienna has joined this trend with its excellent development. The number of shop openings in North America and China declined significantly in 2022, while Europe posted a nearly one-fourth increase in year-on-year comparison.
good locations. In contrast, discounters tend to be the “crisis winners” as they benefit from consumers’ rising price consciousness and have set out on an expansion course. The defensive branch strategy currently followed by conventional retail chains is also providing excellent opportunities for discoun- ters to expand and improve the quality of their branch networks. For renters, the additional demand for space from the discount segment and the ongoing demand from the food trade represent a positive factor in today’s environment. This factor is, however, frequently linked to rent discounts and, above all, to short lease terms. One consequence is the continuing withdrawal of less attractive space from the market. In the top shopping streets, this transformation is concentrated on the conversion of first or second floor space into offices, while at secondary locations discounters often take over previously occupied retail space.
Facts and Figures Vienna city center
Accelerated restructuring in a broad market
Retail space city
116,100 sqm
Ø Shop size Vacancy rate
162 sqm
Apart from the luxury locations, the market for retail space is clearly challenging. The streamlining of branch networks together with insolvencies has accelerated the structural transformation, also in established and high frequency shopping streets and shopping centres. The outcome has been a shift in branch occupancy (especially a decline in the share of textiles and shoes as well as furniture) and an even stronger pull from the medium towards the lower price segment. This development reflects the economic weak- ness, decline in real purchasing power and online competition that has had a substantial impact on the medium price retail segment that dominates
3.0 %
Fluctuation rate
10.8 %
Rents in Vienna‘s top high streets
Location
Net rent EUR/sqm/month
Kohlmarkt
300 - 600
Graben
180 - 400
Kärntner Strasse
150 - 350
Rotenturmstrasse
50 - 100 45 - 160 50 - 120
Innere Mariahilfer Strasse
Neubaugasse
Sources: Standort + Markt 2022/23, EHL Market Research | Q3 2023
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