Overview of the office market in Vienna
Executive Summary
New space production sinks to record low With a completion output of only approx. 45,800 sqm, space production in 2023 falls to a record low and thus exacerbates the excess
Rents I First-time occupancy****(in EUR/sqm per month) Prime location 18.0 - 27.0 Quality location 14.0 - 19.0 Standard location 12.0 - 15.0 Prime rents 27.0 Newly built top office properties remain a scarce commodity and are therefore currently most in demand among institutional investors. Complian- ce with ESG criteria and conformity with the EU taxonomy have become constant companions for investors and decisive purchasing criteria. Since many existing buildings do not yet meet these requi- rements, new opportunities are opening up for in- vestors to make these properties marketable again as part of a so-called „Manage to ESG“ strategy. This manifests itself in rising rents and a currently declining incentive rate. Investment
demand in the prime locations. Vacancy rate reaches historic low
The reduced production of new space in recent years has led to a continuously falling vacancy rate. Currently, it has reached a very low value of only 3.8 % compared to other countries. Landlord market in the top locations Demand currently exceeds supply in perfectly developed locations (city centre, main station).
Demand* | Supply 2023 Production of new space
45,800 sqm 160,000 sqm
Take-up*
Market indicators (cf. 2022/2023) Production of new space
downward trend
Economic data for Austria March 2023* Unemployment rate (acc. to AMS) Nom. GDP EUR billion* (acc. to WKO)
Take-up
stable
Vacancies
downward trend
6.2 %
Prime yields
4.0
480
Economic growth real change in GDP (acc. to WKO)
Rental prices (cf. 2022/2023) Average rents
+ 0.3 %
slightly increasing slightly increasing
Inflation rate
9.1 %
Prime rents
* 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
11,603,000 5,996,386
Vacancy rate
3.8 %
3.91 %
Source: EHL Market Research | Q2 2023
Office Market Vienna 2019 - 2023
300,000 sqm
7 %
220,000
225,000 sqm
6 %
210,000
180,000
170,000
160,000*
150,000 sqm
5 %
126,000
125,000
66,700
75,000 sqm
4 %
45,000
45,800
Vacancy rate
3 %
0
2019
2020
2021
2022
2023
3
Deliveries in sqm
Take-up in sqm
*Forecast, Source: EHL Market Research | Q2 2023
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