Overview of the Office Market in Vienna
Executive Summary
New rentals remain stable Sound rental performance during 2020 (approx. 210,000 sqm) against the backdrop of a difficult economic environment was followed by strong de- mand (approx. 47,000 sqm) for high-quality office space in the first quarter of 2021. Vacancy rate falls to new record low The low production of new space in recent years has led to a steady decline in the vacancy rate. In international comparison, the current 4.5% marks an extremely low level.
Growing focus on refurbishments Roughly 45% of the new space scheduled for com- pletion in 2021 (approx. 82,000 sqm) represents high-quality refurbishments in existing properties. Due to the limited supply of vacant sites, this trend will also influence the market in the future. Investment The interest remains strong in office properties with long-term rentals at top locations. German and Austrian investors currently dominate the mar- ket due to the corona-related travel restrictions. Rents I First-time occupancy**** (in EUR/sqm per month) Prime location 18.0 - 25.5 Quality location 13.5 - 18.0 Standard location 10.0 - 13.5 Prime rents 25.5
Demand* | Supply 2021 Production of new space
82.000 sqm 180.000 sqm
Take-up*
Market indicators Production of new space
slight downward trend
Economic data for Austria 2021*
Take-up
stable
Vacancies
slight downward trend
Austria 5.8 % EU (27) 7.5 % Eurozone (19) 8.3 %
Unemployment rate (Eurostat)
Prime yields
stable
Rental prices Average rents
Nom. GDP EUR billion
396.22
stable stable
Economic growth
6.1 % 1.5 % -4.3 %
Prime rets
Inflation rate
Government budget deficit
Office supply
Total market**
VRF***
* 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 space in sqm
11,436,350 5,888,179
Vacancy rate
4.5 %
3.9 %
Source: EHL Market Research | Q1 2021
Office Market Vienna 2017 - 2021
300,000 sqm
8 %
270,000
260,000
220,000
210,000
225,000 sqm
7 %
185,000
180,000*
150,000
150,000 sqm
6 %
125,000
82.000
75,000 sqm
5 %
45,000
Vacancy rate
0
4 %
2017
2018
2019
2020
2021
3
Deliveries in sqm
*Forecast, Source: EHL Market Research | Q2 2021
Take-up in sqm
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