„2013 is an incredibly exciting year“, said CEO Georg Muzicant MBA, MRICS, in this year’s market report from Colliers International.“ On the European continent, real estate trends move in totally different directions and since the beginning of our record-keeping, there has never been a greater divergence among the various countries.
He describes „the two-speed Europe“: Cautiously optimistic on the threshold of an economic recovery on the one hand, but still with the sword of Damocles over the head of the crisis. Developments such as the political turmoil in southern Europe and the Argus eye, which currently rests on the development in France, provide strong differences between individual states. Similarly, different asset types are heading in different directions, with Austria enjoying the status of a safe-haven and the correlating low yields.
Excerpt of the market report:
Austria as a stable office market
Investment in office real estate – especially in the relative stable markets in Germany, Austria and the Netherlands – remains very popular and is even increasing slightly. New developments in the office sector in 2013 are significantly lower than the space absorbed.
Retail demand remains high
2013 is a strong year. The Austrian retail market can retain it’s high level. The market has adjusted itself and formats that are no longer timely – such as Niedermeyer and Daily - have disappeared from the marketplace.
The Demand for residential real estate in Vienna rises as well
Vienna continues to be a popular location for high quality residential real estate (starting at € 6,000.00 per sqm). The supply of good apartments in good to excellent locations is small. Therefore, prices will continue to increase (with prices of more than € 20,000.00 per sqm being achieved).
The price gap increases in Apartment Buildings
As a result of the increasing prices, it will become even more important for investors to assess the micro-location within a district, price differences of up to 100% were seen within individual districts. It should be noted, that foreign investors are growing in number as potential buyers.
Market recovery, with difficult expectations in the industrial and logistic sector
There are buyers and sellers for owner-occupied industrial real estate and for the true investment segment. Properties that are reasonably suitable, have a high flexibility, modern furnishings and are in a central location or provide opportunistic opportunities are the only sought after property types in this asset class.
Privately managed hotel chains are expanding
While large chains such as Accor, Hilton, Intercontinental or Starwood were rather on the defensive during the past years, privately managed chains such as Motel One, 25 Hours or Wombats continued to expand across Europe.
Austrian Investment market imploding
The market has lost more than 50% of transaction volume compared to 2012. This drop is likely caused by a lack of supply of high quality properties and a lack of interest by investors to invest into transactions carrying more risk.
Nothing new in project development
With regard to project developments in Vienna, a drop in office spaces is noted, in all of Austria, this applies also to new developments of retail spaces.