LANDSTRASSE
Investment property prices Yields
EUR 2,800 to 6,100/sqm 1.4 to 2.5 %
Monthly rents (net) in EUR/sqm
Apartments Offices Retail space
Ø 13.20 10.0 to 20.0
20–50
A locations B locations
5–18
The investment property market in Vienna‘s middle-class 3rd District has been faced with a good 10 per cent decline. Locations near the city centre and namesake Landstrasse are considerably better off than other areas in the district. 3., Landstraße
The pull effect from stable locations is declining
investors’ “flight of fantasy” for the areas sur- rounding major urban development quarters. This is particularly true for the Fasan Quarter between the beltway and Rennweg, where developers see substantial opportunities over the medium-term. Their optimism also applies to peripheral loca- tions where strong impulses are expected over the long-term from the high-rises on the district borders (Triiiple, The Marks). However, these im- pulses have not yet been reflected in rising tenant demand or higher square metre prices.
After several years when the price differences between “better“ and “less attractive“ sections trended downward, the spread between different quality locations has again started to grow. A minus of over 10 per cent for the investment pro- perty market along the Landstrasse meant rather below-average performance for this previously hyped future location. Yields have risen by roug- hly half a per cent, but buyers are only prepared to act at values above two per cent – but investors have also seen initial yields of three per cent in some cases. Locations near the city centre adjoining the Land- strasser Hauptstrasse have done comparatively well, and prices have remained stable at roughly EUR 5,000/sqm despite a decline in peak values. High-equity family foundations have become active here, above all with the acquisition of com- pleted and well-let properties, while institutional investors were found primarily on the seller side in 2022.
„Yields are on the rise up to three per cent.“
It is interesting to note that opportunities for loft expansion outside the top district locations play virtually no role in property valuation. The causal factors here are the greater difficulties in selling expensive loft apartments combined with the high construction costs.
Demand has been somewhat weaker in the district sections that previously benefited from
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