Overview of the office market in Vienna
Executive Summary
The main drivers behind location searches at pre- sent are energy efficiency, sustainability and a strong feel-good atmosphere. This development is further accelerated by ESG requirements and the EU taxonomy.
At around 91,000 sqm, the volume of new space produced this year is significantly higher than last year and is expected to con- tinue rising to around 121,000 sqm next year. The supply of high- quality properties being let for the first time has thereby increa- sed on a slow, yet constant basis. The vacancy rate has stabilised at a low level of 3.3 %, but is expected to rise slightly again in the medium term due to the avid construction of new builds. Production of new space & vacancy rate
Stable rent prices Following the recent hikes, rent prices have now stabilised, with prime rents currently amounting to EUR 28.00/sqm. The limited availability of modern office space in top locations has continued to exacerbate the pressure on prime rents.
Letting performance Due to the present market disequilibrium, we expect the volume of let office space to fall slightly to approx. 160,000 sqm this year. Prime locations remain subject to high excess demand.
With the overall market environment still strongly influenced by the shift in the interest rate landscape and the challenging economic situation in Austria and Germany, the investment market remains tough. However, despite the strenu- ous situation at hand, there are positive indications for the future, particularly in the office real estate sector, where investment activity is most active at present. Investments in core real estate and real estate with strong cash flow remain feasible. Investment
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Office Market Report
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