Austria : Vienna office market2015 Overview
- The Vienna real estate market is characterized by stability by international comparison
Minor vacant space reductions
Office take-up in 2015 totalled approximately 210,000 m², which represents a de- crease of 16% over 2014 and 2016 is expected to reach similar figures. Larger transactions are expected to be more common during 2017 and 2018, when new modern office space will come onto the market.
The prime rent remained stable at € 26.0/m²/month. The positive market development was also reflected in the average rents outside the CBD. The annual rent for high-quality properties in good locations increased over 2015 by approximately € 0.25/m²/month to € 0.50/m²/month. In secondary locations, as well as in older office buildings, rents remained relatively stable. The vacancy rate in 2015 stood at 6.35 %, reflecting a drop of 20 basis points com- pared to the end of 2014. This decrease was due to the combination of the low level of new completions during this period and the healthy tenant demand for office space.
Buoyant investment activity in Vienna
Total investment volume in 2015 in Austria amounted to € 3.6 billion, comprising € 2.5 billion in Vienna. The 4th quarter was particularly boosted by strong activity, recording a volume of € 1.8 billion nationwide, of which € 1.3 billion in Vienna. By far the largest deal in 2015 was the purchase of the office and retail building “Wien Mitte – The Mall” in the CBD of Vienna, representing a transaction volume above € 500 mil- lion. Vienna remains the most sought-after market in Austria. Domestic and German investors were the main players in the market, weighting for circa 80% of the total investment transactions.
Yields remain under pressure; the prime yield for office properties further decreased to stand at 4.45% in Q4 2015.