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Outlook
Announced disasters never happen
in energy prices is not expected in 2023, and declining inflation rates should provide consumers with an added incentive to spend. A valid assumption from consumers‘ viewpoint is that the low point of the crisis will be reached in the first months of 2023 at the latest. l Luxury & top locations Space at the absolute top locations is still in demand, especially by luxury brands that are not yet represented in Vienna and Austria. These firms see recently vacated space as an opportunity to realise their long-awaited market entry. Vacancies are therefore not expected in this segment, although previous rental levels are un- likely to be met at all locations over the short-term. l Steady growth for the food trade The comparatively crisis-resistant food trade is benefitting from the steady increase in the population which, for example, equalled 26,000 persons alone in Vienna during the first half of 2022. This development leads to prospects of further structural growth in the branch. The result will be a steady demand for space in the future, initially with above-average activity in the discount segment. l Sustainability Improvements in the sustainability of retail properties will become more important in the coming years. Included here are energy efficiency measures and the conversion to environmentally friendly heating systems, the optimisation of space usage, greening and support for customers through climate friendly mobility, for example with e-charging stations on parking areas.
Frequent reports over the war in Ukraine, the energy price explosion, record inflation, declining real income and rising interest rates have had a negative influence on the general sentiment and are currently reflected in a pessimistic outlook for the future. But, as the saying goes, announced revolutions never happen, and this is also true for announced disasters: The extremely difficult environment in 2022 has created substantial challenges for the retail trade which have influenced the demand for space, but there are no unsolvable prob- lems in sight. Consequently, the retail trade is not faced with a negative scenario over the long-term. l Consumer spending slowed by energy prices The coming winter season will bring increasing costs for households, in particular due to the adjustment of advance payments for operating costs and the expected very high purchase prices for oil and gas, and these fac- tors will have an added negative effect on the consumer climate. As a result, there are no signs of a noticeable recovery in the weak demand for space over the short- term – a development which, obviously, also applies to rental prices. The only sector that has been able to successfully disen- gage from the negative mood is the discount segment. Food as well as non-food businesses are benefiting from customers’ growing price sensitivity. The demand for space by this consumer group is, therefore, expected to remain sound. As an encouraging factor, the current upward trend in inflation should soon lose momentum. A further surge
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