Overview of the office market in Vienna
Executive Summary
A renters’ market at prime locations Demand is currently outpacing the supply at loca- tions with optimal infrastructure (inner city, main railway station). This trend has been reflected in a slight increase in rental prices and an incentive rate that is now on the decline. Vacancies holding constant at record lows The limited production of new space in recent years has led to a steady decline in vacancy rates. The current 4.1 % marks an extremely low level in international comparison. New space production still reserved With completions amounting to roughly 126,000 sqm,
Rents I First-time occupancy****(in EUR/sqm per month) Prime location 18.0 - 26.0 Quality location 14.0 - 18.0 Standard location 10.0 - 14.0 Prime rents 26.0 Investors‘ demands on a “modern, energy efficient“ office building have changed significantly, while ESG and the EU Taxonomy have become constant companions that will be even more important in the future. This will create opportunities for property owners and value-added investors to make older buildings fit for the future and marketable through revitalisation. the production of space in 2022 substantially excee- ded the 2021 level (approx. 66,700 sqm). The coming year, in contrast, is expected to bring a new decline to only 42,300 sqm. Investment
Demand* | Supply 2022 Production of new space
126,000 sqm 180,000 sqm
Take-up*
Market indicators (cf. 2021/2022) Production of new space
increasing
Economic data for Austria 2022*
Take-up
stable
Vacancies
slight downward trend
Austria 4.5 % EU 6.2 % Eurozone 6.8 %
Unemployment rate (Eurostat)
Prime yields
3.3
Rental prices (cf. 2021/2022) Average rents
Nom. GDP EUR billion*
441
slightly increasing slightly increasing
Economic growth
4.3 %
Prime rents
Inflation rate September 2022
10.5 %
* Forecast ** All indicators are based on the total market (old and new buildings), unless indicated otherwise *** According to the Vienna Research Forum,www.viennaresearchforum.at **** EHL Rent Index of 100 existing and/or refurbished office buildings at various locations
Office supply
Total market**
VRF***
Office space in sqm
11,512,850 5,943,893
Vacancy rate
4.1 %
4.1 %
Source: EHL Market Research | Q3 2022
Office Market Vienna 2018 - 2022
300,000 sqm
8 %
270,000
260,000
220,000
210,000
225,000 sqm
7 %
170,000
180,000*
150,000 sqm
6 %
126,000
125,000
66,700
75,000 sqm
5 %
45,000
4 % Vacancy rate
0
2018
2019
2020
2021
2022
3
Deliveries in sqm
Take-up in sqm
*Forecast, Source: EHL Market Research | Q3 2022
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