Overview of the office market in Vienna
Executive Summary
New space production and vacancy rate at historic lows
Rising rent levels for modern first-time occupancy space
The low production of new space in recent years, which has reached just 45,800 sqm this year, has led to a steady decline in the vacancy rate. It is cur- rently at a very low level by international standards, at just 3.6 %. High pre-letting rate for new properties Just under 85 % of the office space due for comple- tion in 2023 and just under 45 % due for completion in 2024 is currently pre-let. Supply for short-term requests over 3,000 sqm is therefore very limited and in some locations severely restricted or non-existent.
Rents I First-time occupancy***(in EUR/sqm per month) Prime location 18.0 - 27.5 Quality location 14.0 - 19.0 Standard location 12.0 - 15.0 Prime rents 27.5 Like all other asset classes, office property is under price pressure. Older existing properties that do not meet ESG criteria are experiencing significant price declines and a gradual pricing in of energy upgrade measures. In contrast, new-build proper- ties that comply with the EU taxonomy are in high demand, although availability in Vienna is limited. Rents are generally rising due to high demand in prime locations, increased construction costs and persistently high inflation. Prime rents are rising to EUR 27.50/sqm. Investment
Demand* | Supply 2023 Production of new space
45,800 sqm 170,000 sqm
Take-up*
Market indicators (cf. 2022/2023) Production of new space
downward trend
Economic data for Austria October 2023* Unemployment rate (acc. to AMS)
Take-up
stable
Vacancies
downward trend
5.7 % 481.7
Prime yields
4.5
Nom. GDP EUR billion (acc. to WKO)
Economic growth real change in GDP (acc. to WKO)
Rental prices (cf. 2022/2023) Average rents
+ 0.4 %
leicht steigend leicht steigend
Inflation rate
8.0 %
Prime rents
* 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
11,649,000 6,044,927
Vacancy rate
3.6 %
3.8 %
Source: EHL Market Research | Q3 2023
Office Market Vienna 2019 - 2023
300,000 sqm
7 %
220,000
225,000 sqm
6 %
210,000
180,000
170,000*
170,000
150,000 sqm
5 %
126,000
125,000
66,700
75,000 sqm
4 %
45,800
45,000
Vacancy rate
3 %
0
2019
2020
2021
2022
2023
3
Deliveries in sqm
Take-up in sqm
*Forecast, Source: EHL Market Research | Q3 2023
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