Investment Property Report 2023

FAVORITEN Monthly rents (net) in EUR/sqm

Apartments Offices Retail space

Ø 12.15 10.0 to 23.0

15–45

A locations B locations

5–12

SIMMERING Monthly rents (net) in EUR/sqm

FAVORITEN

SIMMERING

Apartments Offices Retail space

Ø 11.25 9.5 to 14.5

Investment property prices Yields

2,200 to 4,500 EUR/sqm

2,000 to 3,600 EUR/sqm

11–25

A locations B locations

2.4 to 3.6 %

2.8 to 3.9%

5–9

Positive impulses from the Central Railway Station, the adjacent office cluster and the attractive Sonnwendviertel have led to high expectations for the invest- ment property market in Favoriten – but a more realistic approach has returned. 10., Favoriten | 11., Simmering

Excessive price expectations were corrected

The average square metre price of roughly EUR 2,600 realised in these transactions appears to be covered by prices on the housing market, and there is again a sufficiently large spread between the total property price and individual apartment prices. An interesting fact is that undeveloped lofts play practi- cally no role in pricing. However, more extensive preparations for the sale of loft extensions can add to the potential for price calculations. This price level will, in any event, open attractive entry opportunities with solid perspectives for me- dium- and long-term value growth. Impulses for the market are expected, above all, from the Altes and Neues Landgut urban development projects. The neighbouring 11th District has, for the me- antime, shown little signs of an upward trend. Simmering is traditionally one of the lower cost markets, and there are almost no transactions on record at the present time. However, the small investment property market along the U3 under- ground axis along the Simmeringer Hauptstrasse is a source of interesting opportunities over the long-term.

In previous years, the traditional working class district Favoriten was showered with great hopes more so than any other investment property location in Vienna. The new Central Railway Station with its high-priced office cluster as well as the also very expensive Sonnwend Quarter with thousands of new apartments and attractive infrastructure prompted expectations of a radical image upgrade with accompanying value growth. This hype was reflected in a total of 33 transactions in 2022, which gave Favoriten a top ranking in Vienna as far as numbers are concerned and – based on the transac- tion volume of EUR 100 million – also outpaced the many traditional investment property districts.

„Opportunities for expansion currently have little value.“

This optimistic viewpoint has been largely confir- med but led, in part, to exaggerated price trends, especially in 2021 and at the beginning of 2022, which have since been corrected in this difficult market environment. The transactions completed in the first months of 2023 closed at a substantially lower price level compared to the previous year.