Investment
Investment market
Market shows movement: Investors discover new opportunities despite challenging environment.
In recent months, the Austrian real estate investment market has suffered primarily from the ongoing wave of insolvencies and the lack of economic growth. The reluctance of banks to lend remains a fundamental obstacle, and alternative financing models – such as mezzanine and/ or private credit funds – are unable to close this gap. Rampant public debt and sluggish economic development in Germany are dampening the Austrian economy. Never- theless, we are seeing the first signs of a slight recovery in individual submarkets.
funds, insurance companies and pension funds are continuing to wait and see for the time being, or in some cases even reducing their portfolios, family offices, special funds and opportunistic investors are becoming more active again. No further interest rate cuts by the ECB are expected for the rest of 2025. Capital market rates, in particular the 10-year swap rate, which is important for the real estate industry, have risen by around 0.5 % since the beginning of the year. In some areas, such as residential property, but also centrally located offices, the sharp decline in development activity combined with high
tenant demand is leading to significantly higher rents. Many players see this as a signal to step up their acquisition efforts – but the dynamic rebound that everyone is hoping for is not expected in the short term. EU taxonomy and sustainability remain key issues, especially in the institutional sector: ESG-compliant new buildings are seeing comparatively small price adjustments, while older existing properties are often under enormous price pressure.
The strongest buyer groups continue to be family offices and foundations, with
While traditional buyers such as public
Prime yields on office properties in European comparison (in %)
8 %
8.0
6 %
6.5
6.25
5.4
5.0
5.0
4 %
4.5
4.3
4.25
4.20
4.0
4.0
3.9
2 %
0 %
Source: EHL Market Research | BNP Paribas Real Estate | Q3 2025
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Office Market Report
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