INNERE STADT
Investment property prices Yields
EUR 8,000 to 14,000/sqm 0.7 to 1.6 %
Monthly rents (net) in EUR/sqm
Apartments Offices Retail space
Ø n. a. 16.0 to 27.0
100–500
A locations B locations
20–90
1., Innere Stadt Expected changes on the investment property market led investors, primarily from the institutional segment, to sell a number of first-class properties in 2022. In contrast, developers concentrated on prestigious locations along the ring road and quay where they still see interesting opportunities.
Investment property novelties on the market
Although these sales closed before the current difficult phase on Vienna’s investment property market, prices were lower than the past two ye- ars. Inner city yields are improving and have risen from the previous top of 1.5 per cent to over the 2 per cent mark. Buyers‘ growing focus on yields was reinforced by the fact that the above-mentioned properties all have attractive retail space on the ground floor zones – and, for the buildings on the Danube Canal, also a substantial amount of office space – as a source of above-average income. This factor has become clearly more relevant with the increase in financing costs. Square metre prices have fallen by up to 10 per cent below the previous highs. They usually stand at EUR 10,000, while prices over EUR 12,000 are the exception. The sale of the unique high street property with the Apple Store on the Kärntnerstrasse to an Upper Austrian family office for a record price of € 31,000/sqm at the beginning of 2023 can be seen as a strong signal for the long-term attracti- veness of the investment property market in the 1st District.
Ambitious Vienna real estate experts have complained for many years that they were ready and willing to invest in the inner city but no one was interested in selling. There were no reasons to grumble in 2022 because – for the first time in years – numerous large institutional investors divested a number of top properties in the 1st District.
„Square metre prices over 12,000 Euros are definitely the exception.“
Insurance firms and listed real estate com- panies, in particular, took advantage of the opportunity to cash in during the year. The largest transaction was the sale of a property on the Stubenring by a large insurance company to an Austrian real estate developer. A listed real estate company sold a number of properties for strategic reasons, including properties near the University Ring and one near the Danube Canal. Directly next to this latter property, another insurance company sold a prestigious building.
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