Excerpt of the market report:
Retail market is in change
Since 2014 was the year of new openings in the shopping mall sector, the demand decreased significantly in 2015 – especially in the luxury segment – not least by the crisis in Ukraine. As well the shift from bricks-and-mortar stores to online shopping has already made itself felt. The figures for the second quarter of 2015 indicate no significant improvement, thus it remains to be seen whether prices will remain at a high level or decline slightly.
Tight supply of available officespace
Nearly 200,000 m² of new office space are expected to be completed by the end of 2015, which is the highest completion performance in recent years, although 100% occupancy was ensured through advance leasing. True new spaces haven’t found a way onto the office market. The reallocation of spaces in condominiums has contributed on the tight supply over the last years.
Things are getting tight at the Hotel market
Vienna remains one of the most attractive destinations for European urban tourism, which is also reflected in overnight hotel stays. Over the past 10 years, the number of overnight stays in Vienna increased by 60.4% to 13.5 million in 2014. At the same time, the number of beds increased to 20,000. 7 new hotels opened solely in 2015 with 2,900 beds, 3 of them in the vicinity of the Vienna central train station. Until the end of 2016 you can select just in Vienna out of approximately 446 hotels.
No further price increase in the residential sector
Following significant price increases in recent years, there is currently a large supply of residential properties in both the high and medium-price range. Particularly in demand apart from its location is efficient, accessible living with open spaces. The main criteria in current search requests are not pools or luxury but rather additional public spaces like rooms for storing bicycles or prams and playgrounds.
Apartment buildings: volume increase in sight
After private parties and foundations constituting the largest buyer group in recent years (nearly 60%), the institutional buyers have become active again. Sooner or later this should lead to an increase in volume. Top returns are now at 1.5 and 3%, although within the Vienna Beltway they rise to a maximum of 3.5%.
High standards in the industrial and logistics sector
The requirements of commercial properties are getting higher, but are also paid for. In addition to modern spaces with flexibility and high ceilings, decisive factors include nearby goods flows and central locations with good traffic connections. The rents for modern commercial properties are still stable, whereas significantly lower rents are expected for older facilities.
Austrian Investment-market still in demand
Although the investment volume in the first quarter of 2015 was significantely lower than in 2014, the interest in Austrian real estate remains unabatedly high. For 2015, total volume is expected to be between EUR 3.2 and EUR 3.5 billion (+19% compared to 2014). Especially the purchase and sale of hotels is becoming increasingly attractive. (p.e. we closed a deal in autumn 2015 with a volume of about EUR 53 millions)
Project development especially in the residential area
The trend of moving away from office properties to hotel and residential properties continued in 2015 as well. As a result of the conclusion of urban-planning contracts in spring 2015, private land owners and project sponsors were for the first time charged the costs for creating infrastructure.