Overview Office Market Vienna
Executive Summary
Rental prices continue to trend upwards Prime rents have remained at the high level of 25.50 EUR/sqm. Average rents have risen to 14.80 EUR/ sqm due to the increasing number of contracts in high-quality new buildings.
Pre-letting increases again Office properties completed in 2018 and 2019 mostly show a high, even close to a full occupancy rate. From 2020 the completion of new space will again increase significantly to 165,000 sqm and the demand for these projects is already driving the market. Vacancy rate hits record low High pre-lettings and low completions of new space have led to the vacancy rate falling to a record low of 4.8 %.
Investment: Office properties remain a rare commodity
Increased demand for investment opportunities as a result of high liquidity and low capital costs, plus a scarcity of core properties results in high demand for older office buildings in 2019. Rents I First occupancy**** (in EUR/sqm per month) Prime locations 18.0 - 25.5 Quality locations 13.5 - 18.0 Standard locations 10.0 - 13.5 Prime rents 25.5
Demand*| Supply 2019 Deliveries
45,000 sqm 220,000 sqm
Take-up*
Market indicators Deliveries
decreasing
Economic Data Austria 2019*
Take-up
stable
Vacancy rate Prime yield
decreasing
Austria 4.6 % EU (28) 6.6 % Eurozone (19) 7.9 %
Unemployment rate (Eurostat)
slightly decreasing
Rental rates Average rents Prime rents
Nom. GDP EUR bn. Economic growth
402.7 2.00 %
slightly increasing
Inflation
2.0 %
stable
State budget deficit
-0.40 %
Office market
Total Space**
VRF***
* Forecast ** All figures in the report refer to total office space consisting of modern office properties and office space in older buildings *** according to Vienna Research Forum, www.viennaresearchforum.at **** EHL-average rent levels of 100 newly built or refurbished office buildings at various locations
Office space in sqm
11,295,050 6,018,988
Vacancy rate
4.8 %
4.4 %
Source: EHL Market Research | Q3 2019
Office Market Vienna 2015 - 2019
320,000
300,000 sqm
8 %
270,000
260,000
220,000*
225,000 sqm
7 %
200,000
185,000
150,000
150,000 sqm
6 %
130,000
75,000 sqm
60,000
5 %
45,000
Vacancy rate
0
4 %
2015
2016
2017
2018
2019
3
Deliveries in sqm
*Forecast
Take-up in sqm
Source: EHL Market Research | Q3 2019
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