Overview of the Office Market in Vienna
Executive Summary
Increase in the production of new space Following a record low in 2019 (approx. 45,000 sqm), the volume of completions will rise to approximately 160,000 sqm this year. Quality- based refurbishments of existing properties represent roughly 20% of this total. Market dominated by Germany and Austrian investors The interest remains strong in office properties with long-term rentals at top locations. German and Austrian investors currently dominate due to the corona-related travel restrictions. Rents I First-time occupancy**** (in EUR/sqm per month) Top location 18.0 – 25.5 Good location 13.5 – 18.0 Average location 10.0 – 13.5 Prime rents 25.5
New rentals slowed by the corona crisis Scores of rental negotiations were interrupted, and many companies have put their relocation plans on hold for the time being. However, two major rentals in the Quartier Lassalle were responsible for sound overall results of approximately 145,000 sqm. Vacancy rate falls to record low High occupancy levels are a common factor in the completions planned for 2020. As a result, the vacancy rate remains steady at a low 4.7% despite the difficult economic environment.
DEMAND* | SUPPLY 2020 Production of new space
160,000 sqm 160,000 sqm
Take-up*
Market indicators Production of new space
rising
Economic data for Austria 2020*
Take-up
slight downward trend
Vacancies
stable
Austria 4.7% EU (27) 6.2% Eurozone (19) 7.4%
Unemployment rate (Eurostat)
Prime yields
slight downward trend
Rental prices Average rents
Nom. GDP EUR billion
411.32 1.20% 1.50% 0.30%
Economic growth
slight upward trend
Inflation rate
Prime rents
stable
Government budget deficit
* 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
11,381,350 5,948,677
Vacancy rate
4.7%
4.4%
Source: EHL Market Research | Q3 2020
Office Market Vienna 2015 - 2020
320,000
300,000 sqm
8 %
270,000
260,000
220,000
225,000 sqm
7 %
185,000
170,000*
160,000
150,000
150,000 sqm
6 %
75,000 sqm
60,000
5 %
45,000
Vacancy rate
0
4 %
2016
2017
2018
2019
2020
3
Deliveries in sqm
*Forecast, EHL Market Research | Q3 2020
Take-up in sqm
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