Retail Market Report Austria | 2021/22

Retail Market Report Austria|2021/22 We stand for Retail

We stand for real estate.

Introduction

drive. The strong growth rates in the online business – contrary to many of the doomsday prophesies – have not led to a drastic decline in the demand for space, but to creative hybrid forms of on- and offline retailing. These “new retailers“ are already responsible for an impressive share of new rentals. And above all, their activities create a highly optimistic mood for the sustainability of the recovery and the robust future of the retail property market. We are currently in the midst of a period with great challenges and equally great opportunities for retail space providers. We invite you to contact our EHL retail team experts and together evaluate how you can best utilise this potential.

After one and a half years in which the retail trade and gastronomy were faced with unprecedented restrictions, the market for retail properties is in the midst of an astonishing revival: The gloomy feeling that characterised the lockdown periods has given way to a tremendous sense of optimism. New, exciting retail concepts are ready and waiting to fill the gap resulting from space reductions by established retailers, and the demand for new space by the recently reeling gastronomy sector is greater than the market has seen in many years. The crisis has, in fact, accelerated the structural transformation in the retail sector and supported the hoped-for but not always expected modernisation

Michael Ehlmaier FRICS Managing Partner EHL Immobilien GmbH

Stefan Wernhart MRICS Managing Partner EHL Gewerbeimmobilien GmbH

Mario Schwaiger Head of Retail EHL Gewerbeimmobilien GmbH

Alexandra Bauer MRICS Head of Market Research EHL Gewerbeimmobilien GmbH

Overview of the Vienna retail sector

Executive Summary

Numerous new rentals: The market is once again in motion

traditionally found in peripheral locations. The IKEA City Store that opened in autumn 2021 could have a signal effect for other retailers if it is successful. Structural transformation: Less fashion, more sport and services The structural transformation in shopping streets and shopping centres has clearly accelerated. The share of fashion and shoe stores is on the decline, while sport outlets, including bicycle shops, as well as service providers and gastronomy are gaining ground. And one additional point: The currently vis- ible reduction in the average store size will support an increase in the variety of the mix. Investments: Top prices for con- venience providers, hesitation for shopping centres Supermarkets and other retail properties with a focus on convenience products are now among the most popular real estate investments and, as a consequence, yields have fallen to the level of top office or good residential properties. In contrast, investors have become more reserved regarding investments in shopping centres and large retail parks in the current transition phase.

The corona-related weakness in demand is over, and the market for retail properties is livelier than it has been in a long time: There is substantial demand for the space freed up by the non-renewal of rental con- tracts. Many newcomers see the current situation as a unique opportunity to establish a base in particu- larly attractive locations.

Hybrid concepts (online / offline) on the move

The demand for space by companies primarily active in the online business has become a relevant market factor when the issue involves size. Logistics space is becoming more important for online supermarkets and flagship stores at top locations that are primarily designed to support image building for online brands and services for online shoppers.

Gastronomy returns to an expansion course

The gastronomy branch – from the international sys- tem gastronomy to innovative local concepts – is on a sound recovery course that also is characterised by an unusually strong expansion drive. The importance of attractive and sufficiently large open-air restau- rants has risen to unparalleled heights.

Key market indicators

Economic data Austria 2021 (forecast) Unemployment rate (Eurostat)

Back to the city? The IKEA City Store experiment and its consequences

5,0 % 2,3 % 2,2 % 3,5 % 2,4 %

Economic growth

Inflation rate

The trend towards online shopping and the increas- ing limitations on automobile traffic are making inner city locations more attractive for branches that are

Construction investments Private consumer spending

Source: WIFO Konjunkturprognose | OeNB (inflation rate)

3

© PicMyPlace

© SCW

The Retail Market in Austria

Fast-tracked structural transformation

One positive aspect of this trend is an above-aver- age supply of vacated space in good and very good locations which creates excellent starting opportu- nities for newcomers. Consequently, it is more than a coincidence that a record-setting number of new concepts will enter the market in 2021. Innovations are coming from many different sides, and not only from companies that are seen as pure online players. A growing number of traditional branded companies is renting space in prime locations for flagship stores or showrooms, primar- ily to strengthen their brands. Two good examples from the e-car segment in Vienna’s inner city are the showrooms from the Swedish e-auto producer Polestar (corner of Wallnerstrasse / Herrengasse) and Porsche Holding Salzburg with its “Mooncity Vienna“ concept (Kärntner Strasse 26 in the pedes- trian zone). Less conspicuous, but more relevant from a quan- titative standpoint, is the space rented for online order deliveries. Online supermarkets from the food sector, in particular, need to process orders very quickly, and traditional logistics centres are not suit- ed for this purpose. As an alternative, retail space must be rented close to the customer. For example: At the end of the first half of 2021, EHL brokered 450 sqm of ground floor space at the “Trienna“ in Vienna’s third district to JOKR, a rapidly expanding online supermarket concept from the USA. Addition- al space for companies from this branch is currently in demand in nearly all of Vienna’s districts.

The retail property market has weathered the pan- demic astonishingly well. The increase in vacancy rates at good and very good locations has been minimal in spite of the various lockdowns, which lasted roughly one year in total and covered most of the retail branches, numerous service providers and practically the entire gastronomy sector. Good retail parks in smaller cities have also remained surprisingly stable. The branch’s success in riding out corona is only due in part to the extensive government support measures and concessions by property owners, which helped most of the retail companies and gastronomy operators to survive. The significant improvement in the situation was also a result of the strong comeback of private consumption after the end of the corona restrictions and, above all, the rapid development of new concepts by the sta- tionary retail, gastronomy and service branches. The success of these innovative approaches will be decisive for medium- and long-term developments because traditional areas are providing only limited impulses. The textile branch, which is the largest customer for space after the food trade, is, gener- ally speaking, on an optimisation course. Branch networks are being streamlined and the average shop size reduced. The demand for space by other traditional branches like shoes or electro- / elec- tronics is also declining.

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is also planned by the TQSR Group (Burger King, Coffeeshop Company, Rosehill – formerly Rosen- berger) with its individual concepts as well as new multi-brand concepts at the service areas along the Austrian autobahns. The strategy includes the conversion of 14 locations during refurbishment by the end of 2022 and the establishment of six gastronomy concepts under the “Rosehill Foodpark“ umbrella brand. Service providers are increasingly turning to tradi- tional retail space for their rentals. Similar to online retailers, they are using these locations to improve their visibility and strengthen their brands. One example is the personnel service provider Trenk- walder, which will soon relocate to ground floor space in THE ICON VIENNA that was brokered by the EHL Retail Department.

The growth trend has also spread to single-brand stores, in part brands which are strongly positioned, above all, in the online business. One prominent example is the Dutch e-bike specialist QWIC, which entered the Austrian market with the opening of a large branch at an excellent location on Vienna’s Schottenring (also with EHL involvement). What‘s more, the news from traditional retail areas is progressively more positive. The European apparel chain PEPCO celebrated a spectacular start by acquiring most of the branches from the CCC Group (which is leaving Austria) and is looking for further locations (according to current plans, 30 to 40 this year). Other well-known non-food discounters like TEDi, Action, KiK and NKD are also searching for additional sites. These activities will not only benefit strong established locations, but also medium-sized shopping centres and retail parks with local relevance. The optimistic mood in the gastronomy branch is even stronger than in the retail trade. The interna- tional system gastronomy segment, in particular, is focused on a clear expansion course. The most talked-about new opening in recent months was the US burger chain “Five Guys“, which has repeatedly drawn long queues at its top location on Vienna’s Graben. KFC – Kentucky Fried Chicken is also very active and, in September 2021, opened a new drive-in at the SC17 retail park in Brunn am Gebirge which was brokered by EHL. Previous openings this year also included the KFC Parndorf (March 2021) and a KFC in 1100 Columbus, the former Columbus Center (August 2021). Further expansion

Decline in retail space

The pace of activity on the rental side is contrasted by the production of new space, especially in pure retail projects. New space is appearing primarily in connection with mixed-use properties, a large part of which are found on the ground floors of major residential projects. At the same time, the market is faced with a steady stream of new space at weaker locations – above all in very small retail parks or single-tenant proper- ties at peripheral locations. This has led to a net re- duction in retail space, which is an understandable development considering the general oversupply.

Development of selling space in Austria

2.0 % 1.5 % 1.0 % 0.5 % 0.0 % -0.5 % -1.0 % -1.5 % -2.0 % -2.5 %

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022p 2023p

Source: RegioPlan 2021

5

© No Panic Coffee

© shutterstock

Gastronomy on an expansion course The gastronomy branch has again become one of the most active customers for additional space. Appar- ently, the interruption in expansion plans caused

International chains, especially in the system gastronomy sector, have developed a particularly large “appetite“ for new locations. Included here are expensive top locations, for example in the “Golden U“ Kärntner Strasse / Graben / Kohlmarkt and Maria- hilfer Strasse. Smaller local gastronomy companies are also focusing on growth and working to translate successful individual location concepts to other sites. For example, EHL brokered space in the Lindengasse (7th district) to the ”No Panic Coffee“ café which was previously located only in the Währinger Strasse.

by the pandemic has been followed by a certain catch-up effect, and numerous companies are now preparing to implement concepts developed during the past two years.

“A significant improvement in earnings is the driver for higher investments“

Focus on established locations

Attention remains focused on well-established entertainment and recreational facilities, in Vienna especially the districts within the beltway. Howev- er, opportunities in the urban development areas of outlying districts are also being explored. The rapidly growing populations, minimal competition and comparatively low rents in these areas create a good potential for gastronomy operations with a local focus. Outdoor dining areas have become more important than ever, independent of the location – on the one hand, with a view towards possible future corona restrictions and, on the other hand, because rising average temperatures are extending the warm weather season and generally increasing the time spent outdoors.

This increased willingness to invest is supported by the very positive development of earnings: The many different support measures introduced during the pandemic have generally offset the lockdown-related losses – and the reduction of the value added tax to 5% with accompanying above-average price inflation (+4.4% in 2020) is currently serving as a profitability driver. In addition, there are clear signs that the pandemic has not spoiled Austrians’ desire to socialize. Weaker occupancy is now only a problem for eateries that are heavily dependent on city tourism, but recent statistics have also shown a sound improvement in this segment.

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More colourful than ever – the new branch mix

sectors in the retail space mix. Current forecasts indicate that this component will increase from the current level of 30% to more than half within five years. The main drivers are expected to come from gastronomy and the service sector – and here, for example, from healthcare. These individual developments, which appear differ- ent at first glance, have one thing in common: The presentation or sale of merchandise in stores is no longer the most important goal. Image building, the strengthening of the brand profile, service and advis- ing, supplementing and optimising online portfolios through branch outlets and flagship stores as well as service and recreational offerings are becoming even more important. Real estate investors who recognise and manage these trends early on with a system- atic and expert approach have good prospects for sustainable success.

The steady transformation on the high streets and in shopping centres visibly accelerated during and after the pandemic. The branch mix is changing faster and more substantially, whereby fashion and shoe businesses have recorded the most massive declines. These branches have been particularly hard hit by the growth of online competition, and leading chains are streamlining their outlet networks and reducing the average shop size. Isolated bankruptcies like “Pimkie“ and “Promod“ are less important from a quantitative perspective. One very positive factor is the sound demand from other branches for available space at attractive locations. Coming from the more traditional spectrum, these newcomers include non-food discounters like the London-based PEPCO Group, Action or TEDi, KiK and NKD, which are trending towards good to very good locations. Another trend is the shift towards specialisation. Classical, all-inclusive sport shops have been confronted with greater competition from specialty suppliers, above all in the booming bike and e-bike business. One high-profile opening was the Austrian market entry of the Dutch e-bike specialist QWIC at Schottenring 26 (1010 Vienna), which was also accompanied by EHL. Across all branches, there is an increasing readiness to invest in flagship stores and showrooms where the key role is not played by the turnover generated directly in the shop. The primary objective for these elaborately designed flagship stores at prominent locations – like the new AlphaTauri store (Graben 10 – formerly the Nespresso flagship), the premium fashion brand of Red Bull GmbH, which is scheduled to open in November 2021 – is to sharpen the brand profile and support online sales.

Branch mix in the inner city shopping zones

100 %

3 % 3 %

8 % 5 %

10 %

12 %

13 %

12 %

80 %

12 %

40 %

60 %

30 %

20 %

40 %

20 %

25 %

27 %

20 %

15 %

13 %

9 %

10 %

7 %

6 %

0 %

2010

2020p

2030p

n Gastronomy

n Services

n Food

n Fashion

n Misc. retail

n Other

n Vacancies

Almost even more striking than the shift between the retail branches is the rapidly growing share of other

Source: RegioPlan 2021

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Facts and Figures Vienna city centre

Sales space city

208,900 sqm

Sales space per resident

0.11 sqm 146 sqm

Ø Shop size

Share of retail chain branches

37.8 %

Vacancy rate

4.4 %

Fluctuation rate

11.3 %

Source: Standort + Markt 2020/21

© Goldenes Quartier, Gregor Titze

The Retail Market in Vienna

Vienna is no different

one of the most popular retail destinations in Europe. New starts like the prominent Huawei store on the Kärntner Strasse or the Swiss chocolatery Läderach in the Donauzentrum are impressive proof. A further driver for the comeback is the gastronomy sector, where the interest in new space rose sharply especially in second half of the year. This demand comes from international corporations as well as successful local restauranteurs who are currently interested in expansion. In line with the Austrian and international trends, attractive outdoor dining areas have become a must for most companies – gastronomy space without an outdoor garden is, in contrast, still difficult to market.

In view of the importance of city tourism for major parts of Vienna’s retail trade and high-end gastron- omy, it would be no great surprise if the city took somewhat longer than the overall Austrian market to recover from the effects of the pandemic. Vienna‘s revival in 2021 was, however, just as massive as the rest of the country. There is substantial movement on the market: on the one hand, many chains are streamlining their branch networks, and, on the other hand, many newcomers have stepped into these gaps and are using the current turmoil to open for business at very good locations. The many positive factors that supported this notable market comeback in 2021 include the unbroken and substantial interest of international retailers in Vien- na. Similar to the times before the crisis, the city is

The luxury segment has also been surprisingly strong. Although tourism has still not returned to the pre-

Retail space (in sqm ) and vacancy rates (in %) in Vienna’s high streets

250,000

18 % 16 % 14 % 12 % 10 %

200,000

150,000

10,1 %

5,7 %

8 % 6 % 4 % 2 % 0 %

100,000

4,4 %

2,4 %

50,000

Innere Mariahilfer Str.

City

Landstraßer Hauptstraße

Favoritenstraße

Retail-related

Vacancies

Vacancy rate (in %)

Retail

Source:

2020/21

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Foot traffic on Vienna’s major high streets 2018 vs. 2020

38,906 (-24%)

58,454 (-21%)

Mariahilfer Straße

27,523 (-51%)

40,124 (-46%)

Kärntner Straße

33,648 (+6%)

32,191 (-3%)

Favoritenstraße

36,008 (-54%)

27,009 (-55%)

Graben

17,098 (-46%)

18,773 (-44%)

Rotenturmstraße

12,628 (-15%)

16,115 (-1%)

Neubaugasse

14,003 (-25%)

12,932 (-25%)

Meidlinger Hauptstraße

15,144 (-23%)

12,231 (-13%)

Landstraßer Hauptstraße

9,395 (-64%)

15,509 (-59%)

Kohlmarkt

Thursday

Saturday

Source: WKO

attractive market opportunities which are coupled with (still) manageable competition. The prospects have not only attracted traditional convenience providers like the food trade – fitness studios, for example, are searching for smaller outlets with 150 to 250 sqm to reach local target groups. Branches like the furniture trade which not only concentrate on local markets are also examining options to settle in these areas.

corona level, the resulting gap has been filled – at least in part – by local consumers. The demand for space in the absolute top locations has, therefore, stabilised at a high level.

New opportunities for secondary locations

On an encouraging note: The upturn has also spread to frequently less attractive areas beyond the prime locations. There is an unusually strong demand for space in the districts bordering on the inner city, from both classic retailers as well as gastronomy, service providers and more and more often from online / offline hybrid concepts. Retailers and restauranteurs have, however, also discovered the potential of the larger urban devel- opment areas in the north and south of the city. The rapidly growing populations in these areas create

Rents in the top high streets

Net rent EUR/sqm /month

Kohlmarkt

250 - 650 200 - 450 150 - 350 30 - 130 35 - 180

Graben

Kärntner Strasse Rotenturmstrasse

Innere Mariahilfer Strasse

Neubaugasse

35 - 120 Source: EHL Market Research | Q3 2021

Foot traffic in 2021

75,000

60,000

45,000

30,000

15,000

0

January

February

March

May

June

July

April

August

Mariahilfer Strasse: Kärntner Strasse:

Thursday Thursday

Saturday Saturday

Source 2021: hystreet.com

9

Shopping Streets Vienna

Vienna | Mariahilfer Strasse

Museumsquartier

Bedarfsgruppen Kurzfristbedarf Bekleidung Customer groups Short-term Apparel H me furni h gs

Shopping Mall Shopwechsel (Auswahl) o ehold, elec. appliances Miscellaneous Retail-supporting supply Vacancies ing mall New rental (selected) Hausrat, Elektrowaren Sonstiges Wohnungseinrichtung Leerstand EH-begl. Angebot

Kaufhaus- Projekt

Bundesheer Store (im Umbau)

Öfferl Bio-Bäckerei

Bergspezl

Hansaton World of Hearing

ocation

Lage

Gerngross

Intersport Flagship

Fußgängerzone Begegnungszone Pedestrian zone Shar d zo e

Biogena

As of Q3 2021

Fielmann Flagship

Stand: Oktober 2021

Motto Brot

Source:

Half Price

INTERNATIONAL PROPERTY CONSULTANTS

CHARTERED SURVEYORS

Meter

0

100

200

Westbahnhof

Teufel Sound

IKEA Wien Westbahnhof

Projections show an increasing demand for space by this branch in the coming years, especially from single-brand stores and retailers specialised in specific sports. The Mariahilfer Strasse is also becoming more of an entertainment zone. The restaurant, bar and cafe scene is growing rapidly, and the success of gas- tronomy operations like Sägewerk, Freiraum and Le Burger has apparently created an appetite for more. A number of interested parties, above all from the system gastronomy sector, are current looking for space. All in all, the Mariahilfer Strasse can be considered to have sound prospects for the future which will also benefit the neighbouring side streets. The results will be visible, above all, when the three major construction sites currently in progress have been completed and the new underground station is finished. Another positive factor is the good “corona resistance“ that is rooted in the traditionally low dependence on tourism.

For Austria’s premiere shopping street, change is more the rule than the exception – but the current transformation in the Mariahilfer Strasse is signifi- cantly faster and more far-reaching than in recent years. The demolition of the Leiner furniture store (see the photo on the right) is the most defining moment for the streetscape, but other trends have materialised at the same time which will sustainably alter the picture of this shopping mile. Perhaps the most important development is the de- cline in the dominance of the fashion and shoe sec- tor. The market exits in 2020 and 2021 included, for example, Dressmann (2020 / Mariahilfer Strasse 85-87) and CCC (2021 / Mariahilfer Strasse 77). In contrast, there were only a few new openings from the apparel and shoe branches. The sport article sector, in contrast, has seen sound growth. Intersport and the outdoor specialist Bergspezl have recently settled here. This trend re- flects the rising expenditures by Austrians for sport articles, above all for bicycles and related products.

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© IKEA

© k18/SIGNA

Major projects in the Mariahilfer Strasse

IKEA City Store / MA-HÜ 10-18*

An important factor for the entire market is the radical departure from conventional furniture retailing concepts: no parking and no warehouse, only small ticket items can be purchased and collected immediately on site. (Not only) the furniture branch will, in any event, exactly monitor the results of this test. Success could mean the return of numerous large retailers from peripheral to inner city locations. One furniture store has opened, while a second major project is currently under development as a replacement for the Leiner furniture store. With a great deal of innovation and quality, the real estate and retail corporation SIGNA plans to inject new life into the traditional department store concept at this prominent location. The “MAHÜ 10-18“ pro- ject is an impressive contrast to the current trends towards single-brand stores and generally smaller units. The roughly 68,000 sqm of gross floor space will house a spaciously designed retail area as well as a 150-room hotel. * Preliminary project name

Two spectacular large-scale projects on the Mariahil- fer Strasse will not only serve as trendsetters for the future of Austria’s most important shopping street. They will also have a significant signal effect for the entire Austrian retail market and, among others, shift the balance of power between inner city locations and shopping alternatives in peripheral areas. The IKEA City Store adjacent to the west railway station was completed and opened on time at the beginning of the 2021 autumn season. This project is important for the surrounding neighbourhood, above all due to the impulses it will create for the outlying section of the Mariahilfer Strasse which has been faced with numerous problems in recent years. The excellent response in the first weeks after the open- ing provides grounds for optimism that the influence will be strong enough to trigger a new upturn in this traditional shopping street. The added frequency should also give a boost to the shops in the west railway station.

Online retail on the rise in Austria Online share of total retail expenditures in %

18 15 12

9 6 3 0

Source: RegioPlan 2021 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021p 2022p 2023p

11

Shopping Streets Vienna

Vienna | Inner City

Vienna’s inner city, the most important tourism hot spot in Austria, was harder hit by the global collapse of city tourism than all other sub-markets. The sharp drop in the number of shopping enthu- siasts from Asia, North America and Russia was responsible for a significant decline in turnover for numerous luxury segment retailers with shops in prime locations. Considering these unfavourable conditions, the inner city retail market has done surprisingly well. Vacancies remain low and rents have not come under widespread pressure. For example: The top locations on the Graben / Kohlmarkt / Goldenes Quartier – which brought exceptional transactions with square metre rents of up to EUR 600 for smaller spaces in the pre-pandemic environment – no longer match this level, but leases of EUR 300 to 500 / sqm are possible. Optimism has obviously taken over, and retail space in the city centre will not be faced with any sustainable problems. This development is underscored by the almost always strong demand for the few vacant retail outlets by local and foreign operators, who see the current situation as a chance to establish a position in an absolute top location.

Ole Lynggaard

Louboutin

Zilli

Rimowa

Jimmy Choo

La Hong

Camicissima

Five Guys

Jones

Alpha Tauri (EÖ 2021-Q4)

Läderach

Zillertaler Trachten Outlet

Nespresso Atelier

IQOS

Kaufhaus Steffl

Bedarfsgruppen Customer groups Short-term Apparel H me furni h gs Kurzfristbedarf Bekleidung

Huawei Flagship

Shopping Mall Shopwechsel (Auswahl) Household, elec. appliances Miscellaneous Retail-supporting supply Vacancies ping mall New rental (selected) Hausrat, Elektrowaren Sonstiges Wohnungseinrichtung Leerstand EH-begl. Angebot

Quipster

Lloyd Germany

Guess

ocation

Lage

Burgers & Bulls in luxury locations

Fußgängerzone Begegnungszone Pedestrian zone Shar d zo e

As of Q3 2021

Of special note, and by all means positive, is the ongoing change in the branch mix. The decisions by the “Five Guys“ burger bistro and the “AlphaTauri“ Red Bull fashion label in favour of the Graben set a twin signal – top locations are no longer reserved for luxury labels, and companies from other market segments can be viewed as tenants for high-price space. The unusually large Interspar supermarket in the main hall of the former CreditAnstalt bank headquarters, now the “Haus am Schottenring“, registered a very successful start. Innovative deliv- ery services also make this supermarket attractive

Stand: Oktober 2021

INTERNATIONAL PROPERTY CONSULTANTS

Meter

0

100

200

CHARTERED SURVEYORS

for more distant consumers, and it is conceivable that other food companies will look to open “flag- ship branches“ in the city centre. Developments like these can only enhance the very positive perspec- tives for the inner city sub-market.

12

© JOKR

© Philipp Lipiarski

Online Supermarkets and Vending Machine Shops

areas for online supermarkets therefore represent a good opportunity for less popular secondary locations where the frequency is too low for retail and gastronomy. A good indication for the potential of pure online supermarkets like gurkerl.at, alfies.at or mjam is investors’ evaluation of these companies: Rohlik, the parent company of gurkerl.at, attained “unicorn status” this past summer, in other words a start-up with a market valuation of more than one billion dollars.

The food trade was undoubtedly the most reliable driver for the demand for retail space in recent years, also because the dominant position of the classical supermarket was not threatened by online competition. This situation changed significantly during the corona lockdowns, and online supermar- kets without a branch network are recording high growth rates. The online supermarket business model is based on fast delivery, with 30 minutes after ordering seen as a good branch standard. This, in turn, is only possible when the delivery warehouse is situat- ed close to the recipient. Conventional logistics centres are unable to provide the necessary service and the search has now turned to rentals in resi- dential areas that allow for fast and easy delivery.

Food round the clock

Vending machine supermarkets represent anoth- er innovation in food retailing that is currently reflected in the search for space in various Vienna districts. Food and other everyday convenience products are available here 24/7. The branches, which are run by companies like “ServiceBOB“ and “Eh da Greissler“, opened for business during the first months of this year, for example in the Hernalser Hauptstrasse, and are developing very well – and the operators have reacted with further expansion plans. The location criteria are similar to conventional supermarkets, with the required space ranging from 30 to 100 sqm. In the future, ground floor space in new residential buildings is expected to become interesting for these companies.

Key factors: parking, delivery and proximity to customers

The location criteria for these suppliers differ signifi- cantly from supermarket branches. Frequency and visibility are irrelevant, the important factors are good delivery options for lorries and parking for de- livery agents. The minimum requirement, as a rule, is 400 to 700 sqm – in other words, less than the 800 sqm generally required by supermarket branch- es for selling space and warehousing. Manoeuvring

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SCN – Shopping Center Nord Ignaz-Köck-Straße 1 | 1210 Vienna 32,000 sqm

Retail Locations in Vienna and the Surrounding Areas

© SCN

STEFFL Department Store Kärntner Straße 19 | 1010 Vienna 12,500 sqm

Goldenes Quartier Tuchlauben | 1010 Vienna 11,500 sqm

Q19 Grinzinger Straße 112 | 1190 Vienna 15,000 sqm

© Goldenes Quartier_Gregor Titze

© Q19

© STEFFL Department Store

Ringstraßen Galerien Kärntner Ring 5-7 | 1010 Vienna 30,000 sqm

© EHL

Lugner City Gablenzgasse 5-13 | 1150 Vienna 38,200 sqm

BahnhofCity Wien West Europaplatz 2-3 | 1150 Vienna 20,500 sqm

© Lugner City

© ECE

Auhof Center Albert-Schweitzer-Gasse 6 | 1140 Vienna 51,000 sqm

Gerngross Mariahilfer Straße 42-48 | 1070 Vienna 30,000 sqm

© Deka Immobilien Management GmbH

© Auhof Center

Riverside Breitenfurter Straße | 1230 Vienna 22,000 sqm

Center Alterlaa Anton-Baumgartner-Str. 40 | 1230 Vienna 20,000 sqm

Westfield Shopping City Süd Vösendorf Süd | 2334 Vösendorf 192,500 sqm

© Riverside

© Visualisation based on photo by Colin Cyruz

© LLB Immo KAG | Architects KBIA Kulmus Bügelmayer

14

Shopping Resort G3 Gerasdorf G3 Platz 1 | 2201 Gerasdorf 70,000 sqm

Westfield Donau Zentrum Wagramer Straße 81 | 1220 Vienna 120,000 sqm

Citygate Wagramer Straße 195 | 1210 Vienna 17,800 sqm

© Visualisierung basierend auf Foto von Colin Cyruz

© G3 | Nagl

Millennium City Handelskai 94-96 | 1200 Vienna 51,800 sqm

© Citygate Shopping

© Millennium City

Gewerbepark Stadlau Gewerbeparkstraße | 1220 Vienna 66,000 sqm

© Wikipedia

Kärntner Str.

Stadion Center Olympiaplatz 2 | 1020 Vienna 26,700 sqm

© Stadion Center

ZS Zentrum Simmering Simmeringer Hptstr. 96A | 1110 Vienna 21,000 sqm

The Mall Landstraßer Hauptstraße | 1030 Vienna 26,800 sqm

© CCreal

© ZS Betriebs GmbH

BahnhofCity Wien Hauptbahnhof Am Hauptbahnhof 1 | 1100 Vienna 23,000 sqm

1100 Columbus Columbusplatz 7-8 | 1100 Vienna 18,000 sqm

huma eleven Landwehrstraße 6 | 1110 Vienna 50,000 sqm

© ECE

© EHL

© huma eleven | Robert Fritz

15

Data and facts on the retail market in Graz

Retail space city

173,700 sqm

Retail space per capita

0.60 sqm 187 sqm

Ø Shop size

Share of retail chain branches

37.5%

Vacancy rate Turnover rate

3.9%

12.6%

Source: Standort + Markt 2020/21

© shutterstock

The Retail Market in Graz

is primarily attributable to the loss of space in the apparel branch (since 2014: -7,300 sqm or –13%).

Graz, the capital city of Styria, also holds a dominant position in the retail sector of this Austrian province. In addition to the regional shopping centres and retail park clusters in the metropolitan area and the Seiersberg shopping city (85,000 sqm) on the periphery which addresses a wider catchment area, the attractive inner city with its diversified offering is an undisputed attraction for the retail trade.

Nevertheless, the Graz inner city with its nearly 174,000 sqm of retail space remains the largest downtown retail cluster outside Vienna. The prime locations extend along the foot of the Schloss- berg around the main plaza, Herrengasse and the well-known Kastner & Öhler department store in the Sackstrasse. The border to the south is formed by Jakomini Square (a secondary location). The commercial area continues with Südtiroler Square and the Annenstrasse to the west of the Mur River (a tertiary location). Previously one of the most important shopping streets in Austria, the Annen- strasse is comparatively unattractive today despite the upgrade which resulted from the make-over of the Styria Center, a shopping mall focused on convenience products.

Steady decline in retail space

One noticeable factor for the retail market in Graz is the development of selling space, which has followed a steady downward trend since 2017 for a total reduction of 7,100 sqm or 4%. This decline

Demography & the Graz economy

Graz is the second largest city in Austria with 291,000 residents and, with an increase of nearly 25% in the population since 2001, one of the fastest growing provincial capitals. Other important drivers for the retail market include the large catchment area which ranges from the southern part of northern Styria to southern Burgenland and into eastern and western Styria as well as shopping tourism from northern Slovenia and Croatia. The population is expected to grow to roughly 325,000 by 2030, which would further consolidate and strengthen the city’s status as the most important shopping destination in the southern provinces.

“The Graz inner city remains the most important retail cluster in the Austrian provinces“

The average shop size, especially in prime locations (among others, with Kastner & Öhler), is rather large at 313 sqm and is only exceeded by Vienna’s Maria- hilfer Strasse (464 sqm). As expected, the share of space in the city occupied by retail chain branches is also above average (77%).

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Redesign of the western inner city

time, also “traditionally“ below average. The only gains in the retail trade were registered by consum- er goods providers. The dm chemist chain relocated to the Murgasse and the Dorotheum and Only also have new locations. Exits include the fashion shops Tally Weijl, Stefanel, Bonita and Gerry Weber as well as Pandora jewelry and KLIPP hairstylists.

Current plans for the (inner)city include the expan- sion of the promenades and new traffic concepts. In particular, the design of the of the inner city west area (between the Herrengasse and Mur River) will be re-evaluated. For example: a new pedestrian zone was integrated in the Schmiedgasse.

“Few vacancies, low turnover in the centre“

Rents in Graz

Location

Net rent EUR/sqm /month

As seen over the years, the vacancy rate has remained constant at a good level (always below 5%), with a recent slight decline of 0.3 percentage points to 3.9%. The turnover rate is, in the mean-

Shopping streets Prime locations Shopping streets Secondary locations

92 37 51

Shopping malls

Source: Standort + Markt 2020/21

Retail locations in Graz

Shopping Malls 1 SC Seiersberg

Space

85,000 sqm 60,000 sqm 43,100 sqm 41,000 sqm 40,000 sqm 40,000 sqm 23,700 sqm 9,100 sqm 5,200 sqm 4,400 sqm 3,900 sqm 47,250 sqm 38,900 sqm 18,700 sqm 18,400 sqm 17,400 sqm 17,200 sqm 12,700 sqm 8,200 sqm 8,200 sqm 6,900 sqm 6,800 sqm

2 Center West

3 Murpark

4 Shopping Nord

ANDRITZ

5 Citypark

6 Kastner & Öhler Retail Parks 7 FMZ Graz Webling

GÖSTING

A9

8 Shopping West 9 Arland Center

GEIDORF

10 Center Ost

Herrengasse

11 AFZ Andritzer FMZ Retail Park Clusters 12 Webling

ST. LEONHARD

EGGENBERG

Jakomini- platz

GRIES

REININGHAUS

13 Seiersberg 14 Lauzilgasse 15 Puntigam 16 Center Ost

ST. PETER

A2

A9

17 Andritz

RAABA

LIEBENAU

18 Graz Nord 19 Eggenberg 20 Straßgang 21 Messendorf

STRASSGANG

PUNTIGAM

PRIME LOCATION

SEIERSBERG

22 Plüddemanngasse 23 Graz Nordwest

Herrengasse, Hauptplatz, Sporgasse, Stempfergasse, Sackstraße

250 sqm

A2

Source: Standort + Markt Beratungsgesellschaft m.b.H.

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Data and facts on the retail market in Innsbruck

Retail space city

115,400 sqm

Retail space per capita

0.87 sqm 160 sqm

Ø Shop size

Share of retail chain branches

39.0%

Vacancy rate Turnover rate

4.4%

15.3%

Source: Standort + Markt 2020/21

© shutterstock

The Retail Market in Innsbruck

clusters to the east of the city (e.g. Neurum) as well as the Cyta Shopping World in Völs make the greater Innsbruck area very attractive for customer flows.

With its diverse shopping opportunities, Innsbruck addresses a catchment area that ranges far beyond the provincial borders. The inner city has an extensive retail offering with roughly 115,000 sqm of selling space, which exceeds cities with similarly large populations, and surpasses, for example, the more populous Salzburg by over 50%. Of special note in the city centre are two shopping malls that have been carefully integrated in the inner city (the Kaufhaus Tyrol and Rathaus Galeries) in the main section of Maria-Theresien Strasse. Peripheral shopping destinations like the dez shopping centre (with IKEA) and the retail park

“The weakness in tourism has also spread to the retail trade in the Tyrolian capital, but vacancies have remained low“

City tourism, which was responsible for nearly 1.6 million overnight stays per year in normal times, remains an important revenue driver, above all for the retail trade. Similar to Salzburg, souvenir shops and gastronomy dominate the areas around the visitor hotspots like the Herzog-Friedrich-Strasse (with the Goldenes Dachl/Golden Roof), while local residents are more attracted by the offering further south in the Maria-Theresien Strasse. It is therefore not surprising that Innsbruck’s inner city was hard hit in 2020 and the first half of 2021 by the effects of the pandemic. That was also the main reason for the inability to maintain the positive trend in vacancies. At 4.4%, 2020 marked an unusual increase of 1.6 percentage points over the previous year. The

Demography & the Innsbruck economy:

Innsbruck has 132,000 residents, which make it the fifth largest city in Austria. The greater metropolitan area has a population of 300,000, and roughly 30,000 students and other persons maintain a secondary residence here. The purchasing power per capita in the province of Tyrol equals EUR 23,490. With approximately 1.6 million overnight stays per year, this city on the Inn River is the third most important destination for city tourism in Austria after Vienna and Salzburg, and the Tyrolian economy is more heavily dependent on tourism than all other Austrian provinces.

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destinations in Vienna. The share of retail chain stores and the space occupied by these outlets are, however, below average at 39% and 67.8%, respectively, despite the two integrated shopping centres which make up more than one-fourth of the total retail space.

turnover rate is also above-average at the present time.

Large-scale rental by Kastner & Öhler

The most important market entries include Kastner & Öhler in the Kaufhaus Tyrol, which took over the space vacated by Peek & Cloppenburg and is now the largest fashion store in Tyrol. A number of apparel chains like Massimo Dutti, Forever18, Superdry, s.Oliver and Zillertaler Trachtenwelt have given up their outlet locations. The branch mix showed an increase in space for the retail trade in 2020 (+900 sqm), among others also in the apparel sector, which represents the largest share among the primary cities (32%) after the top

Rents in Innsbruck

Location

Net rent EUR/sqm /month

Shopping streets Prime locations Shopping streets Secondary locations

100

28

Shopping centres

90 Source: Standort + Markt 2020/21

Retail locations in Innsbruck

Shopping Malls Space 1 Cyta Shoppingwelt 68,000 sqm 2 dez 65,000 sqm 3 Kaufhaus Tyrol 32,800 sqm 4 Sillpark 29,500 sqm 5 Greif Center 16,500 sqm 6 west 16,200 sqm 7 Rathaus Galerien 9,000 sqm

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

THAUR

HUNGERBERG

RUM

HALL IN TIROL

Retail Park Clusters

REICHENAU

Maria- Theresien- Straße

HÖTTING

GEWERBE- GEBIET ROSSAU

8 Neurum

88,100 sqm 39,700 sqm 21,900 sqm 8,300 sqm

A12

9 Innsbruck Ost 1 10 Innsbruck West 11 Innsbruck Ost 2

HÖTTINGER AU

WILTEN

VÖLS

INNSBRUCK- IGLS

A13

PRIME LOCATION

Maria-Theresien-Straße, Herzog-Friedrich-Straße, Pfarrgasse

Source: Standort + Markt Beratungsgesellschaft m.b.H.

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Data and facts on the retail market in Linz

Retail space City

144,000 sqm

Retail space per capita

0.70 sqm 176 sqm

Ø Shop size

Share of retail chain branches

39.6%

Vacancy rate Turnover rate

3.4%

14.2%

Source: Standort + Markt 2020/21

© shutterstock

The Retail Market in Linz

Center and Passage Linz. This inner city trio is joined by a fourth shopping mall, the Lentia City on the main street in Linz-Urfahr. The retail space in these four properties represents nearly one-third of the total retail space in the inner city. The Landstrasse gives the southern part of the city an appeal that extends far beyond the immediate region, while the area north of the Danube River in Urfahr is focused more on everyday needs and is, at best, important from a regional standpoint. “The Atrium, Passage, Lentia and Linzerie inner city shopping malls create a strong impression with their high investments and inno- vative design concepts.“ The momentum and investment volumes are also very impressive. The Arkade Taubenmarkt in the inner city was gradually redesigned over a period of several years and relaunched in spring 2021 after it was repositioned as the “Linzerie“, among others, with a new gastronomy concept. The Passage Linz is undergoing refurbishment by a new owner, and a further shopping mall (with a high-rise and under- ground garage) on the Schiller Park is currently in the design phase. These projects could sustainably revitalise the commercial area in the southern part of the Landstrasse.

Linz has a very broad and attractive retail offering not only in the inner city, but also on the periphery and in the neighbouring communities and cities. The city centre has roughly 144,000 sqm of retail space, while larger shopping malls in the surrounding area (e.g. PlusCity) and widespread retail park clusters (e.g. Linz Leonding) supplement the extensive shop- ping alternatives.

Strong Landstrasse

The Landstrasse – which is the busiest commercial street outside Vienna – has three integrated shop- ping malls with the Arkade Taubenmarkt, Atrium City

Demography & the Linz economy

The central section of the province of Upper Austria with the capital city of Linz is, after Vienna, the strongest economic region in Austria. The industrial boom in 2021 and the low dependence on tourism have been responsible for the currently above-average development. With roughly 207,000 residents, Linz is the third largest city in Austria, and forecasts point to an increase in the population to nearly 220,000 by 2027. Nearby cities like Leonding, Pasching and Traun are also registering strong population growth. In addition, Linz benefits from a densely populated, well-to-do catchment area that extends to Wels and Steyr.

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New projects lead to an increase in vacancy rates

The share of retail space (67%) is below average for primary cities and only average in relation to all Austrian cities, but the decrease in 2020 (-3%) was stronger than in earlier years. The largest per cent declines in the branch mix were recorded by home furnishings (-19%) and household goods / electron- ics (-9%).

Current statistics show 89 shops, or 13,100 sqm, as vacant or under renovation. That represents an increase of roughly 10,000 sqm, or 309% (!), since 2015, but is undoubtedly a result of the many inner city projects. The turnover rate is, accordingly, also above average (14.2%). Among the new openings are Deichmann (Lentia), Kürmayr Schuhe and Giess- wein Schuhe, while the branch closings include, among others, Marc O’Polo, Jack & Jones, Mango, Stefanel and Jones and are related in part to the Arkade refurbishment.

Rents in Linz

Location

Net rent EUR/sqm /month

Shopping streets prime location Shopping streets secondary location

99 24 58

Shopping malls

Source: Standort + Markt 2020/21

Retail locations in Linz

Shopping Malls

Space

1 PlusCity

92,000 sqm

2 Passage Linz 25,000 sqm 3 Interspar EKZ, Industriezeile 17,000 sqm 4 Lentia City 16,000 sqm 5 Infra Center 13,100 sqm 6 Interspar EKZ, Wegscheid 10,500 sqm 7 Pro-Kaufland 9,500 sqm 8 Atrium City Center 8,000 sqm 9 Arkade Taubenmarkt im Umbau 10 Eurospar EKZ, Kleinmünchen 4,600 sqm Retail Parks 11 Lenaupark City 9,700 sqm 12 FMZ Trauner Kreuzung 4,300 sqm Retail Park Clusters 13 Leonding 40,000 sqm 14 Lenaupark 26,300 sqm 15 Urfahr 25,100 sqm 16 Pasching 24,200 sqm 17 Dornach 22,500 sqm 18 Trauner Kreuzung 3,600 sqm Projects 19 EKZ am Postareal 10,000 sqm 20 Franck Kontor 7,300 sqm 21 Forum Oed 3,000 sqm 22 Arkade Taubenmarkt (Relaunch)1,600 sqm 23 Passage Linz (Relaunch) – 24 EKZ am Schillerpark – 25 Pro Kaufland (Relaunch) – 26 Uno Shopping (Relaunch) – 27 Quadrill (Tabakfabrik) –

A7

URFAHR

PÖSTLING- BERG

Landstraße

Bulgari- platz

LEONDING

A7

KLEINMÜNCHEN

A1

PRIME LOCATION

Landstraße, Hauptplatz

Source: Standort + Markt Beratungsgesellschaft m.b.H.

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