MIPIM 2019 (24.1 MB)

MIPIM 2019 – Special edition for a sustainable real estate industry 

Construction is 

a local business 

Karl-Heinz Strauss 

AUSTRIA‘s LEADING COMPANY 

N°1 | EHL Investment Consulting 

Category: Companies national more than EUR 10 Mio. revenue 

www.ehl.at 

www.ehl.at

P1 (Headline), Innsbruck 

P2, Innsbruck 

P3, Innsbruck 

Haus am Schottentor, Vienna

Grounded perspectives 

“When taking on a new project it is particularly important for the 

PEMA Group to provide a contemporary and creative architectural 

solution that satisfies our high aesthetic demands. In our view, 

real estate development is successful if the completion or renovation 

of a building creates added value for the tenants, investors 

and citizens at the respective site. Our main objective is to create 

urbanistic added value for generations to come.” 

Mag. Markus Schafferer, 

Founder and principal shareholder of the PEMA Group 

PEMA Gruppe | Bruneckerstraße 1, 6020 Innsbruck | Stock im Eisen Platz 3, 1010 Wien | T +43 512 251276-10 | E offi ce@pema.at

10 KARL-HEINZ 

CONSTRUCTION 

IS A PEOPLE BUSINESS 

STRAUSS 

2019 

MIPIM 

Column 

8 EDITORIAL 

19 IMPRINT 

20 STABILITY AND SECURITY AS FACTORS FOR SUCCESS 

Austria scores with macroeconomic stability, 

the education sector and its quality of life. 

24 ATTRACTIVE MARKET DESPITE FALLING YIELDS 

Housing in the focus of national and international 

investors. However, yields will continue to fall in 2019. 

28 TREND TOWARDS SERVICED OFFICE SPACE 

Vienna office market: The highest 

completion rate in more than ten years. 

34 E-COMMERCE HAS DEFINITELY ARRIVED 

The fashion trade is being 

dismantled bit by bit by e-commerce. 

Investing in Austria 

40 CHANGING FACE OF RETAIL TRADE 

The most difficult segment 

of the Austrian real estate. 

56 HOUSING 

Investors’ Favourite": High demand - 

price sensitivity - shortage of supply.” 

62 HOTEL. LOCAL PRIVATE INVESTORS 

SEIZE THEIR CHANCE 

Third strongest result 

in long-term comparison. 

64 LOGISTICS REAL ESTATE ON THE UPSWING 

International developers have 

discovered the domestic logistics market.

34 E-COMMERCE 

HAS ARRIVED 

XX 

HkjashD Kdlh sdasldkAdsad 

16 MISTER 

INVESTMENT 

40 

CHANGING FACE 

OF RETAIL TRADE 

SPECIAL 

Positions & Opinions 

10 CONSTRUCTION IS A PEOPLE BUSINESS 

Interview with Karl-Heinz Strauss 

16 MISTER INVESTMENT 

Interview with Franz Pöltl 

44 RETAIL IS CHANGING 

Comment to stories on pages 34 and 40 

By Stefan Goigitzer 

46 WORDRAP 

Amongst real estate managers 

66 IMMOVISION 2.019 

Highlights and trends

What are the 

best strategies? 

E 

ngaging the Future" - this is the 

motto of MIPIM 2019, which takes 

a look at the next 30 years of the 

real estate industry, with a special 

focus on the issues of sustainability. MIPIM 2019 

will seek answers to key questions such as "What 

are the best strategies for long-term benefits?", 

"What are the fundamental strategies for ensuring 

the best quality of life?" and "What are the 

most environmentally friendly practices and 

how can we make the best use of available resources?” 

One of the decisive questions is how 

communities and housing can cope with the 

increasing pressure caused by the rising migration 

of rural populations to the cities. Housing 

has become one of THE topics of MIPIM. Only 

ten years ago, residential real estate was treated 

as a sideline point at MIPIM - today, this asset 

class is the main focus of interest. 

Karl-Heinz Strauss reveals in the cover interview. 

He led his company to the top 5 on the German 

market and successfully positioned the construction 

group as an innovative, reliable partner, 

but there are still many questions to be considered: 

What are his other plans? Is the growth 

too fast? You will find the answers in the big 

cover interview. In this issue once again, we deal 

with the development of the markets. We asked 

Franz Pöltl what 2019 will bring? Are there still 

core real estate properties? Which asset class is 

in demand, which one will be sold most? You 

will find the answers to the questions and many 

other topics on the following pages. 

And now the only thing that remains - we hope 

you enjoy reading them. 

A highlight of this year's 

MIPIM is the opening speech 

by former UN Secretary- 

General Ban Ki-moon, who 

has been committed to 

sustainable development 

for years. One of the former 

UN Secretary-General's first 

major initiatives was the 

2007 Climate Change 

Conference - a milestone 

on the road to greater 

sustainability. 

Philipp Kaufmann 

Herausgeber 

Efficiency, resource conservation, 

environmental 

protection and digitisation 

are also among the top 

concerns in the construction 

industry, as PORR CEO 

Mag. Michael Neubauer 

Chefredakteur 

08 ImmoFokus

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MIPIM 2019 09


Construction is 

a people business 

Home & project markets. "I believe that the Austrian construction industry - and PORR as the market leader 

- is taking on the role of a trailblazer in this area in the continental part of Europe,” says PORR CEO Karl-Heinz 

Strauss in this interview with ImmoFokus.. 

interviewed by:Michael Neubauer 

You took on the leadership of PORR in 

2010. Which international developments 

have occurred within the company since 

then and where do you see PORR in 10 

year's time? 

Karl-Heinz Strauss: What I found was a 

company that constituted an orchestra which 

was not quite in tune and was playing in a lot 

of concert halls it had no business playing in. 

We have consequently looked very closely at 

the markets in which PORR can demonstrate 

its strengths. Since then we have developed 

into a leading construction company within 

our five home markets. We are the market 

leader in Austria, in the top 5 in Germany and 

Switzerland, and we are one of the leading 

companies in Poland and the Czech Republic. 

In these markets, we offer everything that a 

construction company can offer - and PORR 

has a very broad portfolio. 

We also focus on the so-called project markets, 

where we can exploit our expertise in 

tunnelling, infrastructure and railway construction. 

This has proven successful in Qatar, 

Romania, Slovakia, Norway and England. We 

have given up on all other markets in Eastern 

Europe - Russia, Ukraine, Bulgaria, Serbia, 

Croatia, Slovenia, Macedonia and Montenegro 

- in order to focus on the existing five 

home and attractive project markets. However, 

project markets are only attractive as long 

as PORR can acquire worthwhile orders in 

these regions. If this is no longer the case, we 

will withdraw . We always have two or three 

potential target markets with interesting projects 

on our radar. 

Currently … 

… these are Sweden or Denmark, both heavily 

investing in infrastructure. We can play to 

our strength in railway construction with our 

patented "slab track". In the next ten years, 

we want to continue to strengthen our home 

markets, that is, to be even more diverse. 

PORR is a construction company and we re- 

main a construction company. And we build 

as much as we can ourselves. With this strategy, 

we want to dramatically increase our net 

value within our markets. However, this will 

only work if we also can hold onto the knowhow 

and invest in further training for our employees. 

The competence of our own people is 

irreplaceable. We have a variety of strategic 

partnerships - that's a part of business, but 

we're primarily focussed on the PORRians. 

Let us briefly return to the home markets 

of Germany, Switzerland, Poland and the 

Czech Republic. Do the leaders of the respective 

national companies come from 

headquarters in Vienna or are you working 

with local partners? Are you focussed on 

organic growth or expansion through acquisitions 

and takeovers? 

Two thirds are organic growth and one third 

is accounted for by additional purchases. We 

tend to acquire in the markets we enter for the 

first time or in order to obtain know-how that 

10 ImmoFokus

Fotos: Michael Hetzmannseder 

MIPIM 2019 

11


we do not yet have within the company. In 

Germany, for example, we secured a number 

of major acquisitions, which have developed 

positively from the very first minute and have 

meanwhile also secured us a leading position 

in the German market. In 2017 we took over 

Oevermann, a specialist company for the construction 

of roads, airports and logistics areas 

as well as the specialist foundation engineering 

company Franki Grundbau. With the 

acquisition of these two companies we have 

strengthened and enhanced our range as a 

full-service provider. But we are also active 

in other markets. Last year, we took over the 

Czech Alpine Bau CZ with around 450 employees 

and top specialists. The CEO spoke of a 

"bargain". The motive for the acquisition was 

to get new specialists and locations, among 

other things. 

"Construction is a local business. Construction 

is a people business." That means we always 

ensure to have local management - our 

Polish team consists exclusively of Polish colleagues. 

We also rely on local experts in the 

Czech Republic and Slovakia. Places like Doha 

and Dubai are slightly different. There it is an 

international team. That's where people from 

all over the world come together. These markets 

lend themselves to this kind of concept. 

It has always been that way and it will always 

be like this. There are international people 

who move from one project to the next. For 

example, one of them only builds bridges, no 

matter for which company. And wherever a 

big bridge is being built, he will be there. In 

our local markets we try to find local people 

who have to adhere to group guidelines, but 

the business decisions are made where business 

happens. 

"It's always the 

same: if the 

price rises, the 

construction 

company is to 

blame." 

Which country, which project is currently 

the most enjoyable for you, and which is 

making you frown? 

At the moment, we are fortunate enough to 

be operating exclusively in growing markets. 

Then again, we looked at the markets very 

carefully and positioned ourselves where the 

market is accommodating - either with competence 

or with growth. Actually, I can say 

with pride that all our markets are growing 

and performing well. Of course every market 

has its peculiarities and its issues. In Poland, 

the main issue is capacity and lack of raw 

materials. That's where we have to react. And 

PORR does that as a local, Polish company 

with local management. That's very important, 

I think. The other markets are currently 

also performing well. 

The order books are full. Clients complain 

about high construction prices. The 

construction industry is using the current 

boom to demand higher prices. You probably 

have a different view? 

It's always the same: if the price rises, the 

construction company is to blame. But take a 

look at Poland, for example, where the price 

for iron is 40 percent higher, the concrete 

12 ImmoFokus

price has increased by 23 percent. That is not 

in the influence of the construction company. 

Subcontractors also have price increases, material 

and personnel issues. In Germany, there 

was a 6 percent minimum wage increase in 

2018 from one day to the next. You try selling 

that to a customer. It's quite an art form to 

pass these price increases on to the market. If, 

for example, you look at subsidized housing 

construction in Vienna, then the costs have 

risen by just over 30 percent in the last seven 

years. However, we were only able to pass 14 

or 15 percent on to our customer. 

| BA12-14E | 

One control system for 

all building systems: 

Integrated, PC-based building automation 

from Beckhoff. 

"All our markets 

are growing 

and performing 

well." 

Increasing efficiency is the order of the day. 

But let me briefly go back to prices again. In 

the ten years prior to 2017, prices were falling. 

Now they are rising. As a general contractor 

we are also affected by these developments. 

On the one hand, there is a personnel issue: 

"Do I have enough employees in the company? 

What about the capacities of the subcontractors? 

"These, of course, also demand 

their prices. Construction companies, on the 

whole, suffer the negative aspects of rising 

prices. Particularly a large general contractor 

such as PORR. 

Austria, Salzburg 

Hall 10, Booth 0201 

Microsoft Technology 

Center, Cologne: 

Integrated building 

automation achieved using 

PC- and EtherCAT-based 

control from Beckhoff. 

As far as sustainability and conservation 

of resources are concerned, what impact 

does that have on pricing? 

Well, there's simply no way around sustainability 

these days. We're trying - and PORR 

is a pioneer in this area. Whenever possible, 

we use recycled materials in both planning 

and construction. Infrastructure asphalt, for 

example, may contain as much as 50 percent 

of recycled asphalt. 

www.beckhoff.com/building 

With integrated building automation from Beckhoff you can implement a 

PC-based control solution that already meets the requirements of energy 

effi ciency class A. All building systems are controlled with an integrated 

system. Functional changes and extensions are implemented based on 

software, and synergy effects are fully utilised. The result: up to 30 % energy 

savings potential for new buildings and refurbishments. 

Does that cost more in total? 

It's definitely more economical, of course. 

We already recycle a lot, whether it's wood or 

brick debris, and it can be used for all sorts of 

Winter 2018 

13


things, as aggregates or for cement production, 

for example. The cycling of materials 

will become much more pronounced and 

sustainable in the future. 

Austria lags behind when it comes to digitization 

- think Building Information Modelling 

(BIM) -. Isn't there an enormous 

potential for savings here? 

I believe that the Austrian construction industry 

- and again PORR as the market leader 

- is taking on the role of a trailblazer in this 

area in the continental part of Europe. We are 

only lagging behind Anglican, English, Nordic 

countries in this regard, because in these 

countries the public sector jumped onto the 

digital bandwagon much earlier. That's really 

the deciding factor. If the customer - as is now 

happening in Germany - says that from 2024 

onwards, every order has to be tendered in the 

BIM standard, then the momentum gathers. 

In Austria we are only at the beginning of this 

development. ÖBB, ASFINAG and other contracting 

authorities have to adopt a pro-active 

approach and introduce BIM as a mandatory 

standard. 

However, Building Information Modelling 

and digitization are two separate things. Digitization 

means standardizing, harmonizing 

and automating processes. At PORR we are 

working towards paperless administration 

and construction sites. Conversely, Building 

Information Modelling is a standard planning 

framework. We plan using the BIM standard. 

The basis of every calculation are these BIM 

models - no matter if it is 2D, 3D, 4D or 5D. The 

future project manager is already involved at 

the calculation stage. If we actually receive 

the order, this calculation automatically goes 

into so-called work preparation and shaping. 

Purchasing, HR and logistics departments 

then access this data - "from order to pay". 

These are the topics where digitization is 

happening. Digitization is about connecting 

all those involved, so they have the same information 

in the field in real time, enabling 

them to make the right decisions. 

The right staff deployment and the right 

use of materials at the same time is no longer 

called BIM, but LEAN Design, Design to 

budget and then LEAN Construction. An 

approach in which all parties involved sit together 

at the table right from the outset and 

plan the project from start to finish. Together 

and not against each other. The principle of 

client on one side and contractor on the other 

is something we have to overcome. Achieving 

that will enable the construction industry to 

play to its strengths (considering the best bidder 

principle, under which it operates), utilising 

Design to budget and Lean Construction. 

All of our 50,000 devices are also digitized 

and are controlled by telematic means. Data 

is available in real time. No service interval is 

missed. Every screw, every work order exists 

as digital data. Today, even though we have 

doubled the equipment, we work with the 

same crew as we did eight or nine years ago. 

That, too, is a form of digitization. Well, we 

are not talking about digitization here, but we 

are really talking about standardization, 

We have just planned one of the largest office 

complexes in Germany for BMW, using 

LEAN Design and Lean Construction. We 

delivered great quality, on time and under 

budget. This has demonstrated what is possible 

if you know how. 

Factbox 

KARL-HEINZ STRAUSS, MBA (CEO) 

BORN 1960, MARRIED, ONE DAUGH- 

TER, ONE SON 

After graduating from the technical college of 

civil engineering, Karl-Heinz Strauss studied at 

Harvard University, at the Management Business 

School in St. Gallen and received his MBA 

from the IMADEC University in Vienna. Until 

2000, he held various positions at Raiffeisen 

Zentralbank – including in the construction and 

real-estate divisions. He then founded Strauss 

& Partner Immobilien, whose best-known 

projects include the EURO PLAZA office park in 

Vienna. He took over as Chief Executive Officer 

of PORR in September 2010. 

How do you deal with with partners who 

are not yet BIM-enabled? 

We continue working with them, in 2D. You 

have to accept that to a certain degree. You 

have to be careful about the digital issues 

and make it work for the people you have. 

What is much more important and makes 

the difference: Our clients have to commission 

the planning in this standard. If you 

plan and commission it yourself, then the 

one who builds it will adopt it as a matter 

of course. It's not that hard, it works in England 

and in Northern Europe. You can not 

build a bridge if you are not BIM capable, 

and if you aren't then you need not bother 

picking up a tender in Norway. It's all planned 

in the BIM standard. 

Legislators would need to decide that from 

2020 or 2021 we will also work in the BIM 

standard. And not go down the route of 

one of the biggest contracting authorities, 

14 ImmoFokus

which tendered a construction project on the 

East Highway along these lines: "We tender 

it in 2D, but if you realise it in the 3D-BIM- 

Standard you will receive more points in the 

evaluation process." In a nutshell, they want 

to spend the same amount of money, but 

demand much more elaborate, improved 

planning. The client does not want to pay for 

that, instead putting it on the construction 

companies. 

How do national and international business 

differ? 

Every country uses different systems. Scandinavia, 

the English or Anglican region and 

Europe, for example, have changed their ways 

years ago – different sorts of contracts, no 

low-cost suppliers but best bidder, LEAN Construction, 

etc. - and you can feel that today. 

PORR is also well represented. We have learnt 

a lot. Germany has taken an important step, 

namely that from 2024 the public hand may 

only tender bids in the BIM standard. I believe 

that in Austria it will become vital for these issues 

to be addressed by the clients. But above 

all, the contracting authorities have to face up 

to the realities, ie they need proper budgets, 

the right amount of time to plan, and only 

when the planning is done should they tender 

– in the correct manner. 

That means: A departure from planning 

accompanying construction? 

> > Construction-accompanying planning is 

specific to Austria and Germany. Other systems 

have made better progress. Of course 

these countries do not have the high flexibility 

that the Austrian system offers. 

In practice that means more detailed planning 

from the start. 

Absolutely. Finish planning - then start building. 

Every system has its advantages and disadvantages. 

However, the acquired and practised 

flexibility of the Austrian construction 

industry also explains its great international 

success, which is disproportionately large for 

such a small country. The fact that we are one 

of the top three companies in tunnel construction 

in Europe is a good example of this. 

What is key to the international success of 

PORR, what sets it apart from other internationally 

active construction companies? 

First, PORR is an entrepreneurial company. 

Decisions can be made very quickly. Second, 

we have 150 years of experience under our 

belt, with great tradition and technological 

innovation PORR is the leader with many patents 

and systems. What other construction 

companies do not have in comparison are 

our PORRians - totally motivated, long-time 

employees, highly competent and interested 

in the best solutions. 

PORR is Austria's oldest listed company 

and was listed in the ATX for the first time 

last year. Satisfied with its performance? 

We are very happy with the achievement. Unfortunately, 

the stock performance has developed 

in parallel with the construction sector and 

we are clearly beaten below our value. n 

DER MARKTPLATZ FÜR WOHNIMMOBILIEN 

16. – 17. MÄRZ 2019 

MESSE WIEN 

immobilienmesse 

immobilien-messe.at 


Ticket gilt auch für 

15


Mister 

Investment 

Austria’s Leading Company. When a major real 

estate deal takes place in Vienna, it is highly probable 

that EHL Investment Consulting will have its fingers in 

the pie with Franz Pöltl at the head. 

The interview was conducted by Michael Neubauer 

16 ImmoFokus

Fotos: Michael Hetzmannseder 

The investment market is highly competitive. 

Where is the USP of EHL Investment 

Consulting? 

Franz Pöltl: That is undoubtedly the case. We 

are focused on long-term client relationships. 

We have the trust of our clients - and are certainly 

here and there, perhaps even slightly 

faster than our competitors. Basically, it's the 

right thing to do. We are in a very competitive 

market. Unfortunately, it is still not the case that 

we win every pitch. But here too we have been 

able to increase the success rate enormously 

over the years because we have learned from 

the failures of the past and analysed where 

others were better and where we needed to 

catch up. There are many factors that determine 

success or failure, such as conditions, project 

assessments, presentation techniques and sales 

process strategy. The decisive factor, however, 

is to win the trust of the customer, to convince 

him that we will get the best result for him. 

Ideally, you will also be recommended to new 

customers. In retrospect we have profited most 

from that ... The reference list of our satisfied 

customers has grown continuously. 

Do you have to deal differently with German 

investors than with Asian ones - do they 

tick differently? 

> > Completely differently. Negotiations and transactions 

with German clients are very straightforward 

and structured, which is why I find it 

very pleasant to work with German investors. 

If there is an LOI, more than 90 percent of the 

time you reach the goal. With exotic investors, 

you don't know until the end whether the efforts 

will ultimately lead to success. The mentality 

of Asian investors is difficult to assess. They 

don't condemn if they let a deal go. German or 

Austrian institutional investors who have been 

on the market for more than ten years do not 

risk their standing so lightly. 

Are there many - as you say exotic - investors 

trying to push their way into Austria? 

> > The "exotic" investors of today are perhaps 

the standard investors of tomorrow. In 2018, for 

example, it was difficult for Korean investors to 

find suitable products in Austria because the 

large-volume, long-term leased core properties 

that were still available in 2017 were missing. 

Three-digit tickets? 

> > Three-digit and core product. There are of 

course triple digit products, but they are not 

automatically core. Investors from the Asian 

sector are generally looking for real estate that 

is leased out on a long-term basis - we have a 

few customers who are very intensively looking 

for suitable properties. It should also be noted 

that Asian investors are taking a new approach. 

Until recently, they used Anglo-Saxon and/or 

German asset managers. Now they are in the 

process of reworking the markets so that they 

can invest directly in the near future without 

having to involve anyone else. This also brings 

significant changes to Austrian developers and 

real estate agents. They will be dealing with potential 

business partners who are difficult for 

them to assess. As a result, our expertise will 

be even more in demand since EHL has already 

gained a lot of experience with Asian investors. 

Plans for 2019? 

> > As far as we can judge at the moment, 2019 

will once again be a very good real estate year. 

Due to the lack of core products in the commercial 

sector, investors are focusing on the 

residential asset class - in all variations. The 

demographic developments are responsible for 

the security of this trend. The residential asset 

class had gained considerable momentum in 

2018. Our advantage is that as a group we are 

perfectly positioned in the residential segment 

- not only in the investment business. Our residential 

team led by Sandra Bauernfeind knows 

which apartments are in demand and which 

floor plans are necessary to achieve the best prices. 

In addition, her team naturally keeps on top 

of the property market directions for the next 

few years and recognizes exactly where investment 

and development opportunities can be 

found. The EHL residential team sells or leases 

1,000 apartments per year. They conduct up to 

5,000 discussions with interested parties and 

are thus best able to assess housing projects and 

the rent prices that can be obtained. In addition 

to mediating, we often take over the administration 

for the investor as well. We can provide this 

all-around support thanks to the wide range of 

services we offer within the EHL Group. This 

clearly distinguishes us from our competitors. 

Most office towers have recently been sold 

at top prices. Is this the end of the spiral or 

will prices continue to rise? Aren’t those towers 

just getting too expensive? The rents 

cannot keep up with the rising prices. 

> > In the office sector, we can see that the incentives 

are declining as the economy picks up. The 


17


rental market has gained momentum considerably. 

There seems to be a buyer for every property 

in every condition. There is so much liquidity 

that actually all buildings find a buyer. By 

liquidity I don't mean the money that the European 

Central Bank is pumping into the market, 

but the liquidity that the investors generate by 

creating a frequent turnover of the properties. 

In the past, real estate was bought and kept for 

10 or 15 years. That is now the exception. The 

investors' strategy now is to switch ownership 

more frequently. This generates liquidity and 

more transactions. 

But capital is fleeting. At the moment, real 

estate offers the best returns. But what if 

other investment fields emerge? The opportunistically-invested 

capital is gone again 

before you know it. 

> > This may be partly true, although those investors 

usually go through asset managers. I don't 

think they'll be gone so quickly. They may not 

buy more, but they won't fling the real estate 

onto the market right away either. But it is certainly 

true that the manageable performance 

of bonds and equities in recent years has led 

the large asset managers to increase their real 

estate quotas. 

Is this a healthy development? 

> > You can see that one way or the other. This 

trend can also be observed outside the real estate 

industry. Furthermore, bonds and especially 

shares are traded more than in the past: 

I think the approach to buy and then wait 20 

years is limited only to the wealthy private investors 

with the apartment buildings. Anyone 

who buys on account for third parties is required 

to check their assets and take advantage of 

every option available to realize gains in value. 

It's no longer a strategy to have real estate on 

your books for 15 years, to revalue the index 

every year and then wake up at some point and 

see that you've missed out on opportunities and 

the real values no longer apply. In this respect, 

everyone is urged to constantly review their 

portfolios and to realize increases in value when 

the opportunity arises. Even if we hear from the 

one or the other fund manager who claims that 

it breaks his heart to have to sell. 

What about logistics real estate? 

> > Logistics real estate would be a top investment, 

but we don't have the products. 

Why is that the case? 

> > At the moment I believe that it has to do 

with finding the appropriate land. I am convinced 

that the market will take off in the 

near future. An online business without logistics 

space, or without the proverbial last 

mile, will not work. 

Is there too much competition from Slovakia? 

> > Maybe for standard logistics, but not for the 

last mile. Anyone who says they will deliver in 

an hour will not be able to deliver from Slovakia. 

Is there enough space for the last mile? 

> Obviously it has to do with the reclassification 

of land, the price development of that land and 

the fact that many properties are being reclassified 

for residential use, or at least the owners are 

trying to do so. But I also believe that logistics 

developers will offer higher prices in the future 

in order to get to the necessary properties. In the 

city centers, there will also be multi-story logistics 

halls. To sum it up: at the moment, the time 

has not yet come to judge how profitable the 

online business really is, but it is gaining shares 

of the market. Only when the market is divided 

among a few big competitors will the business 

be profitable. At the moment, the only thing you 

can do is get more customers. 

At the expense of the stationary retail trade? 

> The pressure is clearly noticeable in the rental 

business. The tenant structure in the shopping 

centers is changing. Entertainment used to be 

considered really evil. Nobody wanted entertainment. 

Today it's the other way around: a large 

shopping center without entertainment and without 

a good food court is a no-go. All branches 

that offer highly standardized goods are affected 

by the online business. In the investment market, 

the pressure on the stationary retail trade is 

not yet as strong as in the rental market: But, of 

course, everyone is trying to determine what is 

the productivity, what is the turnover per square 

meter, what is the cost of sales burden - these are 

the decisive figures. We can already see that it is 

becoming increasingly difficult for smaller spe- 

18 ImmoFokus

IMPRESSUM 

cialist stores with 2,000 to 3,000 square meters 

that are confined to a roundabout. They are under 

enormous pressure. Large, dominant centers 

will prevail, but those too will have to react 

constantly to new challenges. 

How large is your Investment consulting 

team? 

> > My team consists of 10 staff members. You 

need good, qualified people, who are not easy 

to find. For the project business we are looking 

for employees who are ready to go the extra 

mile. If someone calls at six in the evening and 

says he still needs something today, then our 

people stay there and deal with it and send it 

out at nine or ten. I am aware that this is not 

something that can be taken for granted and, 

of course, it only works if the employees feel 

comfortable and can see long-term goals. I see 

our employees as the capital of our company. 

We are not a capital-intensive industry. In the 

banking sector it used to be said that the bulk 

of the capital leaves the company in the evening 

with the elevator and it is uncertain whether 

it will come back in the morning: this is all 

the more significant for service providers. Our 

success lies in the relationship with our customers 

and the team. 

What qualifications would I need to have in 

order to work in your team? 

> > Ideally, you should have a university degree, 

an interest in the real estate industry, enjoy 

dealing with people and the willingness to do 

more than the average. This also includes working 

a night shift if necessary or to leaving on 

an international business trip at short notice. 

However, human qualities such as integrity, 

reliability, honesty and absolute discretion are 

at least as important as training and the "hard 

facts" with regard to the long-term customer 

relationships that I have already been mentioned 

several times. In exchange we offer an 

excellent working atmosphere, low fluctuation 

and long-term continuity, also in the personnel 

area, which is highly appreciated by both our 

employees and our customers. 

Numbers and facts are one thing. What role 

does gut feeling play in this? 

> > The question is always, at what price can I 

buy or sell? This is 90 percent Excel and the 

last ten percent gut feeling - and ten percent 

can be a lot. 

How good is your gut? 

> I think it's grown in every way over the yearsn 

Medieneigentümer 

GNK Media House GmbH 

Breitwiesergutstraße 10 

A-4020 Linz 

Tel. +43.1.813 03 46-0 

office@media-house.at 

www.media-house.at 

Redaktionsanschrift 

Handelskai 94-96 

A-1200 Wien 

Geschäftsführer 

Philipp Kaufmann & Michael Neubauer 

Chefredaktion 

Michael Neubauer 

Verlagsleiter & Anzeigen 

Henrik Schaller 

Artdirector 

Jelio Anton Stefanov 

Grafik & Layout 

Jelio Anton Stefanov, Johanna Hinterdorfer, 

Annalena Hofinger & Lukas Brunmayr 

Lektorat 

Amelie Miller 

Autoren dieser Ausgabe 

Andreas Altstädter, Angelika Fleischl, 

Patrick Baldia, Philipp Kaufmann, 

Reinhard Krémer sowie die Kommentatoren. 

Photos 

wenn nicht anders angegeben: 

GNK Media House / Katharina Schiffl, 

GNK Media House / Michael Hetzmannseder 

Druck 

Ferdinand Berger & Söhne GmbH 

Media 

DER IMMOFOKUS WENDET SICH IM SINNE 

DER GLEICHSTELLUNG GLEICHERMASSEN AN 

FRAUEN UND MÄNNER. AUS GRÜNDEN DER 

ÜBERSICHTLICHKEIT UND VERSTÄNDLICHKEIT 

KANN ES BEI DEN BEITRÄGEN VORKOMMEN, 

DASS NUR DIE MASKULINE ANSPRECHFORM 

VERWENDET WIRD. 

ImmoFokus ist Mitglied bei: 


19


Stability and security as 

factors for success 

In international competition. Austria scores with macroeconomic stability, the education sector and its 

quality of life, among other aspects. Nevertheless, there is still room for improvement. 

by:Ursula Rischanek 

J 

udging by the steadily rising number 

of overnight stays, Austria enjoys great 

popularity as a holiday destination. 

However, the Alpine republic is also an 

extremely attractive business location for domestic 

and foreign companies. In the previous 

year alone, the state-owned business relocation 

agency ABA-Invest in Austria recorded 355 relocations 

- the best result in the company's 37-year 

history. Economics Minister Margarete Schramböck 

and ABA Managing Director René Siegl 

estimate the associated investments at around 

735 million Euros and 2,888 jobs created. 

Most of the newcomers came from Germany, 

Switzerland came in second, followed by Italy 

and Hungary. But Spanish and British companies 

have also discovered the benefits of moving 

their business to Austria. For example, 

the investments of British companies in Austria 

have doubled from 2017 to 2018. The most 

popular destination among the newcomers to 

the Austrian economy was Vienna, where 182 

companies settled. Lower Austria and Salz- 

20 ImmoFokus

VIENNA AT NIGHT 

Fotos: A. Karnholz, hurca 

burg ranked second and third, respectively. As 

in 2017, the information and communication 

technology (ICT) sector led the way accounting 

for 56 of the newly-established companies, and 

the business-related services sector, which attracted 

55 companies, also stood out in 2018. 

Location loyalty 

Domestic companies as well are also constantly 

confirming their commitment to Austria 

as a business location: Voest, for example, 

is investing around 350 million Euros in a new 

stainless steel plant in Kapfenberg, the first 

one in Europe in 40 years incidentally. Beginning 

in 2021, the fully-digitized plant will produce 

around 205,000 tonnes of the most demanding 

high-performance steel annually. In 

the long term the investment will secure more 

than 3000 highly-qualified jobs in the region. 

In the nearby Leoben, the logistics company 

Knapp is also taking a further investment step: 

around 3.9 million Euros will be supplied for 

the expansion of the company building. The 

current workforce of 580 employees is to be 

increased to 1000 by 2025. Like these two 

examples, numerous other companies, including 

many world market leaders and hidden 

champions, are remaining loyal to their homeland. 

There are various reasons for believing 

in Austria as a business location: One of the 

most important characteristics is that it is a 

quality location. Because the performance 

matches the requirements, the companies are 

also willing to accept the high labour costs. In 

addition, the Alpine republic still scores with 

its proximity to Central and Eastern Europe, 

as more than 360 Eastern European headquarters 

indicate. Other strengths include labour 

productivity well above the Eurozone average, 

low strike rates, political and legal stability 

and high living, social and environmental 

standards. The practice-oriented dual education 

system and a large number of universities 

and advanced technical colleges provide the 

highly sought-after, well-trained skilled workers. 

Stable energy supplies - also in the form 

of ecologically-sustainable energy - are also 

becoming increasingly significant. The rising 

consumer demand of private households, 

based on strong employment growth and 

income tax relief, as well as increasing investments 

in equipment also confirm the strength 

of Austria as a business location. 

Innovative Austria 

The same applies to the innovative strength 

of domestic companies, which is reflected in 

rising innovation expenditure and a correspondingly 

steady increase in the research quota. 

The share of research expenditure in the gross 

domestic product is estimated to have risen 

from 3.16 to 3.19 per cent in the previous year. 

This means that since 2014 the research ratio 

has already exceeded the EU target of three 

percent by 2020. A total of 12.3 billion Euros 

has been invested in research and development 

in 2018 - an increase of 5.6 percent compared 

to 2017. All this is also reflected in various 

location rankings: Austria, for example, ranks 

22nd among 140 nations in the current World 

Economic Forum (WEF) ranking. 

Still some catching up to do 

However, it’s not time to rest on one's laurels 

just yet, as there are some points in which 


21


Austria still has some catching up to do. High 

ancillary labour costs, the pension system, 

rigid working hours and the shortage of 

skilled workers are just some of the issues of 

concern. The same applies to regulations and 

bureaucracy. For example, it takes 21 days to 

set up a company in this country before 

all official procedures are completed. 

In the WEF ranking, this means 

only 103rd place. Small countries 

such as Denmark and Estonia 

show that things can go much 

faster with three and a days 

of administration procedures 

each. Many indicators 

of the financial system are 

also below average, such 

as a negative assessment 

of market capitalisation or 

the availability of risk capital. 

The Alpine republic also 

has some catching up to do 

in terms of digitisation. In the 

current Digital Economy and 

Society Index (DESI) of the European 

Commission, Austria ranks 

tenth with a score of 0.57, just ahead 

of Germany, but Austria ranks among the 

top 5 in the field of e-government pioneers. 

Nevertheless, the use of digital services and 

access to IT technologies are in need of improvement 

in this digital age. Furthermore, 

access to broadband Internet is still below 

the EU and OECD average. In addition, according 

to the Organisation for Economic 

Cooperation and Development (OECD), Austria 

still has one of the highest tax and duty 

ratios in the world with 41.8 percent, whereas 

the OECD average is 34.2 percent. However, 

as part of the planned tax reform, the government 

wants to reduce the tax rate to 40 

percent and thus contribute to making 

the location even more attractive. 

It has already done so in another 

area: firstly, with the new location 

development regulation 

(StEntG), which significantly 

accelerates the approval procedure 

for selected major 

projects of economic significance. 

On the other hand, 

it has also taken the step 

of entrusting the Chamber 

of Commerce with the management 

function. This is 

intended to solve investment 

blockades in projects that are 

in the special public interest, to 

structure the procedures better 

and thereby significantly streamline 

and simplify them. At the same 

time, abusive delays in proceedings are 

effectively eliminated - all with the aim 

of creating a well-functioning infrastructure 

and further increasing the competitiveness 

of the business location because the competition 

never sleeps. 

n 

Austrian Economic Forecast 

(Real change in %) 2013 2014 2015 2016 2017 2018 2019 2020 

GDP 0.0 0.7 1.1 2.0 2.6 2.7 1.6 1.5 

Private consumption 0.8 1.1 2.4 2.5 4.2 3.8 3.0 2.0 

Public consumption -0.1 0.3 0.4 1.4 1.4 1.6 1.4 1.3 

Gross fixed capital formation 1.6 -0.4 2.3 4.3 3.9 3.4 2.1 1.6 

Exports 0.6 2.9 3.5 2.7 4.7 4.2 2.7 2.3 

Imports 0.7 3.0 3.6 3.4 5.1 2.5 2.3 2.3 

CPI (change in %) 2.0 1.7 0.9 0.9 2.1 2.0 1.8 1.9 

Unemployment rate (in %, nat. def.) 7.6 8.4 9.1 9.1 8.5 7.7 7.4 7.4 

Unemployment rate (in %, Eurostat def.) 5.3 5.6 5.7 6.0 5.5 4.9 4.7 4.7 

Current account balance (in % of GDP) 1.9 2.5 1.7 2.5 2.0 2.4 2.5 2.4 

General Government balance (in % of GDP) -2.0 -2.7 -1.0 -1.6 -0.8 -0.3 0.1 0.2 

Public debt (in % of GDP) 81.3 84.0 84.8 83.0 78.3 74.8 72.2 69.7 

Source: Bank Austria Economics & Market Analysis Austria - Source: Statistik Austria, WIFO, Thomson Reuters Datastream, EU Commission, 

UniCredit Research 

22 ImmoFokus

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23


Attractive market 

despite falling yields 

Sustainable trend reversal. Housing in the focus of national and international investors. However, yields 

will continue to fall in 2019. 

T 

he year 2018 was marked by extraordinarily 

intensive activity," says 

EHL Managing Partner Franz Pöltl. 

"The Austrian market continues to 

be attractive for both national and international 

investors and the current price level is acceptable 

despite falling yields.” One consequence of 

the lack of large-scale transactions is that even 

the very financially-strong investors are also 

active in the middle segment. "Many investors 

Investment Market Office Austria 

Prime locations: top rents and top yields 

30 

28 

26 

24 

22 

20 

18 

16 

14 

12 

10 

22,0 

23,0 

26,0 

27,0 

27,0 

27,0 

26,5 

26,0 

Gross rents 

Top rents in EURsqm /month 

6,00% 

H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 

2011 2012 2013 2014 2015 2016 2017 2018 

26,0 

26,0 

26,0 

26,0 

prefer large-volume properties for reasons of 

transaction and cost efficiency, but in view of 

future fungibility, the majority of prospective 

buyers also like to invest in properties in the 

range between 30 and 100 million Euros. Last 

year a reasonable number of appealing investment 

properties were available in this segment, 

which were able to meet the requirements of 

the buyers in terms of returns and sustainability 

of earnings.” 

26,0 

26,0 

25,5 

25,5 

5,50% 

5,00% 

4,50% 

4,00% 

< 3,50 % 

3,50% 

3,00% 

"The result at the end of 2018 could have been 

similar to that of the previous year, but the 

limited range of products for international 

institutional investors slowed down the investment 

volume," explains Georg Fichtinger, 

Head of Investment Properties CBRE. In the 

previous year, the average transaction was 37 

million Euros. In 2017, an average transaction 

was still worth 45 million Euros. The lack of 

large properties is also reflected in the number 

of large-volume transactions. There were only 

eight transactions in 2018 with the volume of 

over 100 million Euros. "In 2017 there were still 

12 transactions of that volume," adds Fichtinger. 

In total, German investors accounted for 

around 29 percent of all transactions in Austria 

in the previous year and 16 percent of the buyers 

were international investors from other countries. 

In comparison to 2017, when there was a 

"total overhang" of foreign investors, this year 

56 percent of domestic buyers were actively 

involved. According to Fichtinger, this is also 

due to a lack of products interesting for international 

investors. At around 31 percent, office 

Office CBD top rents and top yields 

16 

14 

12 

10 

8 

6 

4 

2 

0 

13,0 

13,0 

13,5 

14,0 

14,0 

14,0 

13,5 

Source: EHL Market Research | Q1 2019 

13,5 

Gross rents 

Top rents in EURsqm /month 


2011 2012 2013 2014 2015 2016 2017 2018 

13,5 

13,5 

14,0 

14,0 

14,0 

14,0 

14,5 

14,5 

4,75 % 

8,00% 

7,00% 

6,00% 

5,00% 

4,00% 

3,00% 

"German investors in particular 

are increasingly interested in 

Austrian residential real estate." 

Franz Pöltl, 

EHL Investment Consulting 

24 ImmoFokus

Investment Market Retail Austria 

Shopping Centres Top rents/yields 

140 

Rents 

Top Rents in sqm/Euro/Month 

8,00% 

120 

100 

80 

100 

100 

100 

100 

100 

105 

105 

105 

105 

105 

125 

130 

130 

120 

120 

120 

7,00% 

6,00% 

"German investors in particular 

are increasingly interested in 

Austrian residential real estate." 

60 

40 

20 

4,00 % 

5,00% 

4,00% 

Georg Fichtinger, 

CBRE Austria 

0 


2011 2012 2013 2014 2015 2016 2017 2018 

3,00% 

Fotos: CBRE, EHL 

properties were the traditionally strongest asset 

class in 2018. With 29 percent of the transaction 

volume and driven by the large-volume KIKA/ 

Leiner deal and the sale of the Danube portfolio 

consisting of several specialist retail centers, 

retail properties followed in second place. Institutional 

residential investments recorded the 

strongest growth in 2018, taking third place 

with just under 20 percent (6 percent in the previous 

year), followed by mixed-use properties 

with around 8 percent. 

Yields have fallen 

German investors in particular are increasingly 

interested in Austrian residential real 

estate. On the one hand, this is due to the fact 

that new construction activity has picked up 

and there is a very attractive supply situation 

by international standards. On the other hand, 

the yields on commercial properties have fallen, 

so that residential properties now offer 

a similar yield level," says Fichtinger. "The 

Austrian real estate market is far ahead of the 

rest of Europe and, above all, the absolute first 

choice for the long-term, security-oriented 

buyers," confirms Franz Pöltl, Managing Partner 

of EHL Investment Consulting. "Rental levels 

are moderate by international standards, 

price levels are well secured due to long-term 

demographic developments and the present 

strong economy, making the current yields extremely 

attractive in these respects.” The Austrian 

market is primarily measured by the large 

international buyers in terms of alternative investment 

opportunities in German cities, and 

this comparison has very often been in favour 

of the Alpine republic most recently. "Austria 

is currently the better Germany in many respects," 

Pöltl sums up, stressing in particular 

the appeal of the capital city. "Vienna is the 

Retail Parks Top rents/yields 

16 

14 

12 

10 

8 

6 

4 

2 

0 

14,0 

14,5 

15,0 

15,0 

15,0 

Source: EHL Market Research | Q1 2018 

second largest German-speaking city, it is the 

fastest-growing metropolis in the Germanspeaking 

region in percentage terms and there 

is still no overheated rental market despite 

the economic boom. This means that further 

prospects are at least as good as in the German 

Big 5 (Berlin, Hamburg, Munich, Frankfurt, 

Cologne), but the yields are still about 25 to 50 

basis points higher. For an investor who thinks 

decades ahead, this is a huge difference." So, it 

is not surprising that both megadeals exceeding 

the 500 million Euro mark have been 

done with German buyers (sale of the Austria 

Campus to PGIM Real Estate and of The Icon 

Vienna to Allianz). 

Foreign institutional Investors 

Pöltl is convinced that the interest in residential 

real estate will continue due to the very 

good performance. "The forecast population 

growth as well as the ongoing urbanisation 

indicate an extremely sustainable investment 

15,0 

15,0 

15,0 

15,0 

Rents 

Top Rents in sqm/Euro/Month 


2011 2012 2013 2014 2015 2016 2017 2018 

15,0 

15,0 

15,0 

15,0 

15,0 

15,0 

15,0 

4,75 % 

8,00% 

7,00% 

6,00% 

5,00% 

4,00% 

3,00% 

scenario for a long-term stable development, 

which appeals particularly to safety-oriented 

buyers. Vienna remains the most important 

market in this segment, but projects in the provincial 

capitals are also increasingly attracting 

investor interest. The only restriction: "These 

investors are concentrating exclusively on the 

new buildings, as these do not fall under the 

full scope of application of the current tenancy 

legislation.” With a volume of approximately 

1.2 billion Euros, for the first time the same 

amount was invested in Austrian residential 

real estate as in office properties in 2018. Both 

asset classes accounted for approximately 30 

percent of the transaction volume. Foreign 

institutional investors in particular were interested 

in residential real estate in Austria in 

2018 and were responsible for around 69 percent 

of the residential investment volume. Investors 

no longer focused only on the central 

locations around the Vienna Inner City and 

the French BNP Paribas as well as the German 


25


Selected Top-Deals in Austria 2018 

STATUS PROPERTY TYPE OF USE GLA BUYER SELLER 

Q1 2018 Lassallestrasse 1, 5 Office 111,550 sqm Unicredit Bank Austria Imfarr 

Q4 2018 Media Quarter Marx 3 Office 25,400 sqm 

Wirtschaftsagentur Wien / 

Privatinvestor 

Q2 2018 Adler&Ameise Office 23,934 sqm Wealthcap TH Real Estate 

Q3 2018 Business Boulevard Salzburg Office 16,715 sqm Triuva Privatinvestoren 

Q4 2018 Kolingasse 14-16 Office 16,389 sqm Volksbank AG ARE Austrian Real Estate 

Q2 2018 Styria Center Graz Office 15,052 sqm Projektentwickler Union Investment 

Q3 2018 faBricks Office 9,490 sqm 

Erste Immobilien Kapitalanlage 

Gesellschaft 

Q1 2018 Max Tower Graz Office 6,200 sqm Privatinvestor 

Amundi 

Privatinvestoren 

Union Investment 

Immofonds I 

Q2 2018 Competence Center Office 5,813 sqm Wealthcap Deutsche Pensionskasse 

Q1 2018 WE Anteil Wipplingerstrasse 35 Office 4,450 sqm PGIM Real Estate Hallmann Holding 

Q2 2018 Biocenter Office 4,351 sqm Wealthcap Deutsche Pensionskasse 

Q2 2018 Kika/Leiner Portfolio Retail n.a. Steinhoff Gruppe Signa 

Q1 2018 Einzelhandelsportfolio AT Retail 7,0000 sqm ADIA BVK 

Q4 2018 Donau Portfolio Retail 51,100 sqm Uniqa Investorenkonsortium 

Q2 2018 50% Anteil Weberzeile Ried Retail 25,000 sqm SES TH Real Estate 

Q1 2018 Geschäftshaus Mariahilferstrasse Retail 16,000 sqm M&A Real Consult Imfarr 

Q2 2018 K1 Kittsee Retail 13,100 sqm Privatinvestor TH Real Estate 

Q1 2018 Pittarello Vösendorf Retail 10,000 sqm Semper Constantia Privatinvestoren 

Q4 2018 Kärntner Straße 12, 1010 Wien Retail 3,547 sqm Privatinvestor Private Investor 

Q1 2018 Erdberger Lände 36-38, BT 1-5 Housing 25,592 sqm Premium / ARE 

Deutscher institutioneller 

Investor 

Q3 2018 Dresdner Strasse 90 Development Housing 21,000 sqm ARWAG/MIGRA S+B Gruppe 

Q3 2018 The Metropolitan Living Development Housing 17,650 sqm Invester United Benefits STC Swiss Town Consult 

Q3 2018 LW 280 Housing 10,300 sqm Strabag Buwog 

Q3 2018 Franz Joseph Housing 10,000 sqm 

Moser Wohnbau / Bauwerk 

Wohnraum 

Aberdeen Standard 

Investment 

Q3 2018 Obere Donaustrasse 23-27 & 29 Development Hotel/Housing 40,000 sqm Reitenburg GmbH UBM Development 

Q4 2018 Hilton Garden Inn Hotel 174 Rooms Immofinanz AG Privatinvestor 

Q1 2018 Logistik Portfolio Ö Logistics/Industrial 98,500 sqm Alpha Industrial 

Frasers Property 

Investments 

Q3 2018 Tec Center Lebring Logistics/Industrial 28,000 sqm Palmira Europa Capital 

Q3 2018 Post Areal Gemischt genutzt 40,000 sqm Soravia, Michel Tojner 

Source:EHL Market Research 

Hasso Plattner, 

Denkmalneu-Gruppe 

26 ImmoFokus

Investment 

• Yield compressions are changing strategies 

the housing asset class is becoming 

more interesting 

• In addition to German buyers, interest 

from the Asian region is increasing 

• In the first half of 2018 retail dominated 

by two large-volume transactions: the 

Kika/Leiner portfolio and Mariahilfer 

Strasse 47 

Union Investment, for example, also acquired 

properties in the outskirts of Vienna’s 21st 

and 22nd districts. Furthermore, Colognebased 

Art-Invest Real Estate contributed five 

out of ten components of the "Das Ensemble" 

project - a joint venture between Premium 

Immobilien AG and the federally-owned ARE 

Austrian Real Estate Development - for a special 

housing fund of an institutional investor 

in the 3rd district of Vienna. "The interest of 

German investors in Austrian residential real 

estate in particular has risen sharply in recent 

years. Last year, residential real estate accounted 

for more than half of the German investment 

volume in Austria," said Fichtinger. 

"New residential construction in Vienna will 

continue to provide an attractive investment 

product in the coming years, which is why we 

Retail 

• Area shrinks - sales volume rises: currently 

the best sales volume development since 

2010 

• Online competition leads to new strategies: 

“Retailtainment” to make stationary 

retailing interesting again 

• The Golden U remains the most attractive 

location in Vienna’s inner city, Rotenturmstrasse 

and Brandstätte are increasingly 

in demand 

• 30-40 international newcomers enter 

the market in 2018 

expect institutional investors to continue to 

invest heavily in 2019," maintains Fichtinger. 

Some experts believe that residential investments 

could even overtake the office asset 

class in 2019. From a developer's point of view, 

it is much easier to sell to investors than to sell 

the condominiums individually. Investors are 

even willing to invest in apartments that will 

take up to three years to complete. A quarter 

of the investments flowed into these so-called 

"forward purchases" - and more and more often 

at a very early stage. In the past, a forward 

deal was concluded twelve months before 

completion; today, properties are sold two or 

even two and a half years earlier. "This would 

have been considered impossible three years 

ago," explains Fichtinger. 

Industry and Logistics 

• Industry 4.0 is demanding flexibility and 

increased network readiness - also for 

properties 

• The availability of trained specialists is 

also an important issue in Austria 

• Online trade is also changing logistics - 

the topic of city logistics will present new 

challenges for both the private sector and 

politics. 

However, great demand and high investment 

pressure has led to further price increases in 

all asset classes. Top yields in the office sector 

fell from 3.75 percent to below 3.5 percent in 

the course of 2018 and remain strained, with 

the result that top yields in the residential sector 

(3.25 percent) are already on a par with top 

yields in prime commercial properties. In the 

retail segment, prime yields remained stable at 

around 4 percent for shopping centers and 4.75 

percent for specialty shopping centers due to 

the lack of sales of top properties. The outlook 

for 2019 is also extremely positive. On the one 

hand, the first quarter of 2019 is expected to see 

the completion of some major transactions that 

Offif i ce 

• 300,000 square meters of new space in 

2018 will bring the highest value in over 10 

years 

• Letting performance and vacancy rates 

increase 

• The large supply of first, as well as 

second-time occupancy space increases 

the pressure on landlords 

Housing 

• Excess demand leads to price increases, 

even in locations that have been less in 

demand so far 

• Demand remains high in the luxury segment 

- but requirements are also uncompromisingly 

high 

• Barrier-free construction and the singlehousehold 

trend are changing layout 

planning 

have been postponed until this year. On the 

other hand, preparations are already underway 

for a large number of sales processes for marketable 

properties that are well absorbed by the 

market due to the investment-friendly capital 

market environment and the high demand 

from both institutional and private investors. 

Yields will continue to fall at least in the first 

half of the year, after which a "lateral movement" 

is expected. "Despite the many new 

properties coming onto the market, we expect 

investor demand to far exceed supply in 2019 

and that this will continue to be the limiting 

factor for volume development.” Pöltl expects 

a further increase in investors' involvement in 

alternative asset classes, for example, demand 

is very high in the area of logistics. "With the 

growing online trade, logistics investments are 

certainly particularly promising investments 

for the future; but above all in this segment, 

there are far too few properties on the market 

in Austria to even begin to meet demand.” n 


27


Trend towards 

serviced office space 

Boom. The Vienna office market in 2018 was characterised by the highest completion rate in more than ten 

years. A total of 260,000 square metres of high-quality office space came onto the market. In 2019 the figure will 

be just under 38,000. 

by:Michael Neubauer 

T 

he Vienna office market in 2018 

was characterised by the highest 

completion rate for more than ten 

years. A total of 260,000 square 

meters of high-quality office space came onto 

the market, including major projects such as 

the Austria Campus (160,000 square meters) 

at Praterstern, The Icon Vienna (74,200 square 

meters) at the central railway station (Hauptbahnhof) 

and the ViE (13,800 square meters) 

in the Erdberger Lände. 

"It may not be a record year, but it is a very 

favourable one," says Andreas Ridder, Managing 

Director CBRE Austria & CEE. This wave 

of completions was very well received by the 

market and some of the properties have a preutilisation 

ratio of up to 70 percent. "This is particularly 

remarkable since rents in these ultramodern 

new properties in low-rise buildings 

are up to 18.00 Euros per square meter, which 

is after all higher than the average rent of 14.80 

Euros per square meter," says Stefan Wernhart, 

Managing Director of EHL Gewerbeimmobilien 

GmbH. It is a sign that companies have increasingly 

been on the lookout for high-quality 

first-time occupancy space in which the demands 

placed on modern work and organisational 

concepts can be ideally implemented. 

Among the largest office projects that have 

provided important impulses are The Icon Vienna, 

Austria Campus, Messecarrée, QBC6 and 

ViE Erdberger Lände. Fast economic growth of 

the past two years has also had an increasingly 

positive effect on the demand from office 

tenants for new, higher-quality office spaces. 

"Finally, we were able to meet the demand and 

offer attractive new locations and office space 

to potential tenants. Because of the interesting 

properties, more large lettings were also possible 

than in previous years. As a result, nine 

large leases, each with more than 5,000 square 

meters, were signed," detailed Ridder. "Due to 

increased demand and attractive supply, top 

rents in good and average locations outside the 

CBD have risen by up to 9 percent compared 

with the previous year. At the end of last year, 

prime rents in top locations amounted to 25.50 

Euro per square meter, in good locations to 

18.50 Euros per square meter and in average 

locations to 15.50 Euros per square meter. 

Vacancy rate up only slightly 

The robust market activity is also the reason 

why the vacancy rate rose only slightly to 5.3 

percent despite the increased space production. 

In 2018, more large-volume lettings were 

Vienna Office Market 2011 – 2019 

Deliveries in sqm Vacancy Rate (%) 

Take-up in sqm 

* Forecast 

300,000 sqm 

225,000 sqm 

150,000 sqm 

75,000 sqm 

185.000 

220.000 

180.000 

210.000 

180.000 

260.000 

120.000 

220.000 

130.000 

200.000 

60.000 

320.000 

150.000 

185.000 

260.000 

270.000 

38.000 * 

2011 2012 2013 2014 2015 2016 2017 2018 2019 

Source: EHL-Market Research | Ql 2019 

8,00% 

7,00% 

6,00% 

5,00% 

4,00% 

28 ImmoFokus

Projects & Completions 2019/2020 

2019 

PROPERTY SIZE LOCATION 

Inno Plaza 11.000 sqm 1120, Pottendorfer Straße 23-25 

Silo Plus 11.000 sqm 1230, Lemböckgasse 57-59 

HoHo Wien 7.700 sqm 1220, Janis-Joplin-Promenade 26 

Technologiezentrum Seestadt, BT2 7.100 sqm 1220, Christine-Touaillon-Str. 11 

2020 

PROPERTY SIZE LOCATION 

QBC 1+2 34.000 sqm 1100, Wiedner Gürtel 5, Am Belvedere 10 

Office Park 4 26.000 sqm 1300, Towerstraße 

The Brick - Biotope Offices am Wienerberg 19.000 sqm 1100, Triester Straße 89-91 

Haus am Schottentor* 14.500 sqm 1010, Schottengasse 6-8 

myhive am Wienerberg, WBS 7-9* 10.000 sqm 1100, Wienerbergstraße 7-9 

Rathausstraße 1** 9.000 sqm 1010, Rathausstraße 1 

myhive Ungargasse* 7.000 sqm 1030, Ungargasse 37 

Prater Glacis 4.000 sqm 1020, Perspektivstraße 4 

"In new office buildings, 

the areas for Co-Working 

providers should 

be part of the planning 

concept, in order to be 

able to meet the changing 

requirements of 

the companies." 

Stefan Wernhart, 

EHL Commercial Real Estate 

Source: EHL Market Research | Q1 2019 

This table only contains projects where the decision to build has already been made or construction has begun. 

*Refurbishment **owner-occupied 

Fotos: EHL, CBRE 

recorded than in previous years; the average 

of all lettings with more than 1,000 square 

meters was approximately 2,900 square 

meters in 2018. The increase in rentals over 

10,000 square meters such as Austro Control 

with 12,700 square meters or Volksbank with 

14,300 square meters in the East/Erdberg 

region can also be rated positively. The most 

mobile tenants in 2018 came from the service 

sector (approximately 32 percent) and from the 

public sector (approximately 22 percent). The 

most popular location in 2018 was the inner 

city, followed by Erdberg, Wienerberg and Donau 

City/Lassallestraße. With a share of more 

than 12 percent, leases to providers of serviced 

office space made a significant contribution to 

the positive result on the office market. Due to 

further expansion plans and new market entries, 

the trend towards serviced office space is 

expected to continue in 2019. 

Co-Working Boom needs space 

Co-Working providers were a noticeably 

stronger driving force behind the letting 

performance compared to last year and, 

with a share of approximately 13 percent of 

total take-up, have risen to become an important 

demand group - in 2016 the figure 

was only one percent. Between 2018 and 

"Project-related 

work and 

fluctuating 

employee 

numbers are 

the reality for 

more and more 

companies." 

2020 over 40,000 square meters of serviced 

office space should be opened since there is 

a huge demand. The largest providers are 

currently Regus, Spaces and weXelerate, 

but the US provider WeWork is also considering 

coming to Austria. Suppliers such 

as Talent Garden with approximately 4,900 

square meters in the Liechtensteinstraße, 

Spaces with approximately 8,000 square 

meters in Square Plus and approximately 

5,000 square meters in The Icon Vienna 

follow the trend towards more flexibility 

in the office market, according to Wernhart: 

"Project-related work and fluctuating 

employee numbers are becoming a reality 

for more and more companies. Therefore, 

it makes sense that in new office buildings 

the areas for Co-Working providers should 

be part of the planning concept, in order to 

be able to meet the changing requirements 

of the companies.” Wernhart predicts a year 

of consolidation on the Vienna office market 

in 2019. "Due to the production of new space 

of only 38,000 square meters this year, the 


29


CZ 

PRAG 

A22 

Office Buildings 

10.00 € - 14.00 € 

Office Towers 

13.00 € - 17.50 € 

NORTH 

U6 


11.00 € - 14.00 € WEST 

U4 


11.00 € - 16.50 € 

D 

MÜNCHEN 

SALZBURG - LINZ 

INNER DISTRICTS 

A1 

U4 

Office Towers 

14.00 € - 21.00 € 

U3 

Vienna 

Hauptbahnhof 

U3 


11.00 € - 16.00 € 

Office Towers 

13.00 € - 21.00 € 

SOUTH 

A23 

U6 

S1 

U1 

Source: Modesta Real Estate | Büromarktbericht 2018 

SALZBURG - LINZ 

D 

A 1 / A 21 

IT SLO 

A2 GRAZ 

A3 / A2 HU 

30 ImmoFokus

U1 

CZ BRÜNN S1 

NORTH-EAST 


11.50 € - 14.50 € 

Office Towers 

13.00 € - 24.00 € 

remaining first occupancy space of the 2018 

wave of completions will be well absorbed 

by the market and the vacancy rate will fall 

again in the course of the first half of 2019 

after the short-term increase in the fourth 

quarter of 2018.” Due to the lower supply of 

available first-occupancy space compared 

to the previous year, Wernhart expects an 

increase in the letting performance of highquality 

refurbished second occupancies in 

2019. "Because of the very good rate of preutilisation 

of the completions from 2018 and 

the very good demand situation, the chances 

of landlords of high-quality refurbished second-occupancy 

units in 2019 to re-let them 

at attractive prices are better than they have 

been for a long time.” 

U2 

CITY CENTER 

SOUTH EAST 


12.25 € - 26.00 € 

Office Towers 

15.00 € - 26.00 € 


10.00 € - 14.00 € 

Office Towers 

13.00 € - 18.00 € 

"The letting 

opportunities 

of high-quality 

refurbished 

second leases at 

attractive prices 

are better for the 

landlords in 2019 

than they have 

been for 

a long time." 

Vienna 

International 

Airport 

A4 

A4 / A6 

SK 

BRATISLAVA 

BUDAPEST 

HU 

Low completion rate 2019 

The office market in Vienna should also develop 

well in 2019 - in line with the situation in 

Europe - but with less rental growth than last 

year. "The low completion rate of only approximately 

38,000 square meters in 2019 could 

become a challenge for office tenants looking 

for large interconnected spaces. There will 

only be a slight let up here in 2020/2021 when 

larger office developments such as QBC 1 and 


31


2 or the Forum Donaustadt are ready to be 

occupied," said Ridder. After the record year 

2018, the existing vacancies should fill up 

quickly this year with the completion of some 

major projects. Rising office rents are quite 

possible, especially if an international major 

tenant is looking for space. The yield for offices, 

like that for apartments, is just over three 

percent, while specialist shops have a yield 

of 5.5 percent. The new Buwog headquarters 

in Rathausstraße 1 will be completed in 

2019. Silo Plus, HoHo, Haus am Schottentor, 

The Silo extension "Silo Plus" of Immorent 

in Liesing are on the list of Viennese office 

real estate brokers for 2019, as are the HoHo 

in Seestadt (Cetus/ Kerbler Holding) and the 

InnoPlaza of the S+B Group in Meidling. The 

"Haus am Schottentor" should also be occupied 

next year, and the first expansion of the 

Seestadt Technology Centre should also be 

completed. Compared to 2018, which saw 

around 260,000 square meters of new space, 

this will be quite a turning point in the statistics; 

but if The Brick on the Wienerberg is 

completed in 2019 instead of 2020, then the 

completion statistics will show that around 

25,000 square meters will move up from 

2020 to 2019. n 

"The low completion rate in 

2019 will be a challenge for 

office tenants looking for 

large interconnected spaces." 

Andreas Ridder, 

CBRE Austria & CEE 

Selected Lettings 2018 

TENANT SIZE PROPERTY 

Volksbank 14.300 sqm 1030, Dietrichgasse 17-25 

Austro Control 12.700 sqm 1030, Austro Tower, Schnirchgasse 17 

Asfinag 9.400 sqm 1030, Austro Tower, Schnirchgasse 17 

Spaces 8.700 sqm 1010, Haus am Schottentor, Schottengasse 6-8 

Spaces 8.000 sqm 1190, Square Plus, Leopold-Ungar-Platz 2-3 

RHI 7.600 sqm 1120, Euro Plaza 6, Kranichberggasse 6 

Wiener Wohnen 6.500 sqm 1030, Erdbergstraße 200 

Spaces 

5.000 sqm 

1100, Euro Plaza 6, Gertrude-Fröhlich-Sandner- 

Straße 3 

Talent Garden 4.900 sqm 1090, Liechtensteinstraße 111-115 

Rewe 4.200 sqm 1120, Euro Plaza 4, Am Euro Platz 2 

A1 Telekom 4.000 sqm 1220, Andromeda Tower, Donau-City-Straße 6 

Uniqa 3.800 sqm 1020, Aspernbrückengasse 2 

Kammer und Akademie der Wirtschaftstreuhänder 3.700 sqm 1100, QBC 2a, Wiedner Gürtel 5/Am Belvedere 10 

Daikin Airconditioning 2.500 sqm 1230, Silo Plus, Lemböckgasse 57-59 

Rexel Austria 2.400 sqm 1020, Austria Campus, Walcherstraße 1 

Source: EHL Market Research | Q12019 

TAKE-UP - BY OFFICE SUBMARKET 

29 % 

18 % 

1 % 

6 % 

7 % 

16 % 

Rentals from 1,000 m² taken into account 

Source: EHL Market Research / Q1 2019 

10 % 

13 % 

Neu Marx | Erdberg 

Wienerberg | Southern Region 

Inner City and directly adjacent locations 

Lassallestraße | Messe | Prater 

Central Station | Quartier Belvedere 

North Region 

Vienna DC 

Western Region 

BY SECTOR 

1% 

3% 

5% 

25% 

6% 

12% 

17% 

15% 

16% 

Public sector 

Serviced office 

IT | High-Tech 

Banks and insurances 

Retail and services 

Construction, real estate 

Law firms and consultants 

Educational and 

training facilities 

Pharma and health 

32 ImmoFokus

Analysis Submarkets Vienna Q4/2018 

SUBMARKET NAME 

ACTIVE PROPERTIES 

TOTAL SPACE IN SQM 

I 

n the fourth quarter of 2018 take-up 

on the Vienna office market totaled 

approx. 80,800 square meter - around 

38 percent more than in the fourth 

quarter of 2017 and 117 percent more than in 

the third quarter of 2018. This is what the results 

of the Vienna Research Forum (VRF) show after 

evaluating the current key data of the Vienna 

office market. 

The VRF only takes into account modern office 

space built since 1990 or completely renovated 

and office space which meets certain quality 

criteria such as indoor climate, elevators or IT 

standards. According to the Vienna Research 

Forum, the largest take-up (pre-letting) was 

the lease of approx. 14,250 square meter in the 

Inner Districts - CBD submarket. This corresponds 

to approx. 18 percent of the total take-up on 

the Vienna office market in the fourth quarter. 

Further large-scale lettings were also registered 

in the Inner Districts - CBD submarket with 

ACTIVE PROPERTIES TOTAL 

SPACE IN SQM CLASS A 

ACTIVE PROPERTIES TOTAL 

SPACE IN SQM CLASS B 

Vienna: Results of the 4th quarter 

approx. 8,700 square meter (pre-letting) and 

in the Donaucity submarket with approx. 4,000 

sqm. A total of 78 lettings were recorded in the 

fourth quarter - 36 more than in the previous 

quarter and one less than in the fourth quarter 

of 2017. A closer look at take-up based on type 

of rental shows that 84 percent account for new 

leases and 16 percent for pre-lets* 

Increase of vacancy rate 

to 5.7 percent in 4th quarter 

In the fourth quarter of 2018, the vacancy 

rate in the VRF portfolio of modern office 

buildings in Vienna amounted to 5.7 percent, 

which is an increase over the previous 

quarter (4.8 percent) and 0.3 percent higher 

than in the same period of the previous year 

(Q4 2017). The submarket with the lowest 

vacancy rate was the Airport City Vienna 

with 2.2 percent and the submarket with the 

highest rate was North with 10.0 percent. 

For the first time in September 2016, the VRF 

VACANCY RATE 

IN % 

TAKE-UP 

Inner Districts - CBD 2,263.090 1,009.213 1,253.877 3,5% 31.686 

Donaucity 528.936 278.834 250.102 2,5% 8.077 

Prater/Lasallestraße 722.793 621.405 101.388 6,8% 15.930 

Erdberg - St. Marx (East) 668.326 552.707 115.619 7,3% 6.850 

Central Station 529.566 386.265 143.301 8,7% 7.200 

Wienerberg (South) 535.629 300.248 235.381 8,4% 5.740 

North 454.042 237.017 217.025 10,0% 1792 

West 255.989 140.693 115.296 6,6% 873 

AirportCity 82.800 46.000 36.800 2,2% 2629 

Total 6,041.171 3,572.382 2.468.789 5,7% 80.777 

Source: Vienna Research Forum 

collected the total stock of modern office 

space for Vienna which it updated at the end 

of the fourth quarter of 2018: it amounts to 

6,041,171 square meter **, of which 59 percent 

belong to class A and 41 percent to class B 

real estate according to VRF standard. In the 

fourth quarter of 2018 the projects Austria 

Campus (still without construction part 1) 

in the Prater Lassallestraße submarket, and 

The Icon Vienna and G5 in the Central station 

submarket were included in the portfolio. 

In addition, after a further inspection of the 

CBD submarket, projects were added to the 

portfolio or surfaces adjusted. The total takeup 

in the VRF market for 2018, including 

subsequently recorded take-up, amounted to 

225,100 square meter. n 

* The take-up registered by VRF only refers to new leases and 

pre-lets, renewals of rental agreements are not included. 

**The stock of office space can change from quarter to 

quarter due to regular adaptations of unclassified objects, 

conversions and completions. 

Factbox 

• Take-up in the fourth quarter at approx. 

80,800 square meter 

• Largest rental accounts for nearly 18 percent 

of the total take-up 

• Vacancy rate amounts to 5.7 percent 

• Take-up in 2018 totaled 225,100 square meter 

About the Vienna Research Forum 

The Vienna Research Forum initiator is the Association for quality promotion in the 

real estate sector (immQu) with the leading Vienna commercial real estate companies, 

CBRE, Colliers International, Immobilienmakler, EHL Immobilien, ORAG Immobilien, 

OTTO Immobilien and Spiegelfeld International. They provide anonymously 

and independently of each other key parameters, such as take-up, vacancy rates, 

completions, to the VRF database. The data is then published quarterly to provide a 

comparative analysis which helps investors and companies. 


33


E-commerce has 

definitely arrived 

Structural effects. City center prime locations remain in demand, but there are hardly any customers for the 

vacant Class B and Class C locations in the meantime. "The last stronghold of the Austrian cities, the fashion trade, 

is being dismantled bit by bit by e-commerce," says the Standort + Markt Managing Partner Hannes Lindner. 

by:Andreas Altstädter 

D 

igital change has propelled online 

retailers such as Amazon 

and Alibaba into the ranks of 

the world's most successful 

companies. In Austria, however, stationary 

retailing (still) dominates. Still. "Thanks to the 

economic boom. Although retail space growth 

is declining from year to year and was only at 1 

percent recently, at least there is still growth," 

emphasizes Hannes Lindner, Managing Director 

of Standort + Markt, who has evaluated the 

structural effects of e-commerce on stationary 

retail in a study. For this purpose, the retail 

space in the 15 most prominent Austrian cities 

was examined. The view of the provinces 

includes the nine provincial capitals and six 

other cities with large populations. 

Does the vigorous demand for stationary 

space mean that e-commerce does not afflict 

the stationary retail in Austria after all? 

Unfortunately not. The truth will only be 

revealed when the change in the structure 

of the sector is analysed in detail: One of the 

main reasons for visiting the city, namely the 

fashion stores in the city centers, is steadily 

losing significance. "How high the decrease 

in turnover actually is as a result of the 

e-commerce campaign is not being openly 

discussed in the industry. What is clear, 

however, is that the fashion trade is quite 

obviously reevaluating the stationary space 

and successively distancing itself from it," 

Lindner is convinced. The last stronghold of 

the Austrian cities, the fashion trade, is being 

dismantled by e-commerce bit by bit. "With 

an e-commerce share of almost 20 percent, 

fashion is one of the three most important 

purchasing groups in online shopping and 

indicates growth rates of almost 10 percent. 

Of course, we also see this in the shop sales," 

confirms Rainer Will, Managing Director of 

the Handelsverband. In addition to clothing, 

books and electrical appliances are among 

the largest segments in home shopping. 

Change of the space use mix 

The shift of retail sales to the web will continue 

to increase, at least in the medium term. 

"E-Commerce is the driving force behind 

the current growth in retail sales. Online 

business is currently growing 10 times faster 

Foto: Pavel Losevsky 

34 ImmoFokus

Resourceful 

Strategic 

Creative 

www.chsh.com 

CHSH Austria Belarus Bulgaria Czech Republic Hungary Romania Slovak Republic 


35


than stationary retail. Stagnation is not foreseeable, 

on the contrary: "In the future at 

least every third Euro generated in non-food 

retailing will be online,” Will is convinced of 

that. Currently, the online share of the total 

retail trade-relevant expenditure is around 8 

to 10 percent, with online shopping being a 

question of age. The younger the consumers, 

the more frequently they shop online - preferably 

on their smartphones. 

In the course of e-commerce growth, one 

asks the question which uses - instead of 

fashion - have become more firmly anchored 

in the spatial structure of cities? For one, 

there are the leisure-oriented service providers 

such as fitness centers and casinos, 

whose share of space (2.5 percent) in the 

cities is still rather low despite considerable 

increases in the past four years (+25 percent). 

In terms of space, however, restaurants are 

much more important, because they account 

for 13.1 percent of the city shop spaces and 

have increased by 7 percent in terms of space 

within four years. These two sectors have absorbed 

at least apart of the former fashion 

shop areas. 

"The answer lies in 

digitization of the 

space and strategic 

linking of online 

shopping with the 

store branches." 

Rainer Will, 

Trade Association Austria 

E-commerce drives 

vacancy dynamics forward 

While the vacancy rate in the 15-City Sample 

Study in 2013 was still at 4.0 percent, it has 

since climbed continuously to 5.9 percent. 

It is astonishing that the total shop space of 

the 15-City Sample Study has increased by 

2.5 percent in the same period. Furthermore: 

"In the smaller district capitals, the vacancy 

rate is already at 13.5 percent." Here the consumer 

is driven into online shopping. This 

is due to many factors, including changes in 

consumer behavior, but also to the lack of 

digital infrastructure in many places - keyword 

5G," explains Will. 

Despite e-commerce, 

Class A locations remain in demand 

However, there is still a more or less brisk 

demand for space, especially for Class A 

locations, although it can be observed that 

Class B and Class C locations are being replaced 

by Class A locations in the course of improvement 

measures for branch networks. 

In the meantime, there are hardly any customers 

for the Class B and Class C spaces and 

they remain vacant. Even the much-quoted 

hype in the catering trade obviously does 

DEVELOPMENT OF RETAIL AND 

SHOP AREAS OF THE 15 CITIES' SAMPLE 

100 % 

90 % 

80 % 

70 % 

60 % 

50 % 

40 % 

30 % 

20 % 

10 % 

0 % 

4,0 % 

2,0 % 

12,3 % 

6,7 % 

17,9 % 

8,7 % 

3,7 % 

35,5 % 

9,3 % 

4,5 % 

2,0 % 

12,9 % 

6,7 % 

17,9 % 

8,7 % 

3,7 % 

34,7 % 

9,3 % 

17,9 % 

2,4 % 

12,9 % 

6,7 % 

17,9 % 

8,7 % 

3,7 % 

34,4 % 

9,3 % 

17,9 % 

2,4 % 

13,0 % 

6,7 % 

17,9 % 

8,7 % 

3,7 % 

33,9 % 

9,3 % 

17,9 % 

2,5 % 

13,1 % 

5,8 % 

17,9 % 

9,0 % 

3,2 % 

33,2 % 

9,4 % 

2013/14 2014/15 2015/16 2016/17 2017/18 

Vacancy becoming a topic 

Fitness Center, Casino! 

Gastronomy slowly increasing 

Home Accessories! 

Vacancy 

Other Leisure Areas 

Gastronomy 

Services 

Other Selection Needs 

Home Furnishings 

Electrical and Household Goods 

Clothing and Footwear 

Short-term Needs 

Electronics - change completed 

Fashion is under heavy pressure 

Local supply remains constant 

36 ImmoFokus

DEVELOPMENT OF RETAIL AND 

SHOP AREAS OF THE 15 CITIES' SAMPLE 

6.000 

5.500 

5.000 

5.236 

5.448 

5.520 

5.584 

5.639 

Shop areas of the "Big 15" 

increased by 7.7% in 5 years 

Thousand m* 

4.500 

4.412 

4.587 

4.644 

4.696 

4.734 

Retail areas of the “Big 15” 

increased by + 7.3% in 5 years 

4.000 

3.500 

3.000 

2013/14 2014/15 2015/16 2016/17 2017/18 

Retail sale area in square meters 

Total shop area in square meters 

not need the available space - the restaurant 

trade is also increasingly focusing on Class 

A locations. In the end this might lead to a 

situation in which a shop space in a certain 

location can realistically no longer be put 

to use. This scenario means either leasing 

the shop space for a different use outside 

the "consumer" area (e.g. as offices or doctors' 

surgeries) or the space remains empty. 

Former shop spaces that are no longer used 

or can potentially be used as such, lead to a 

decline in available shop spaces. A development 

that will probably be observed more 

frequently in the urban landscape in the 

near future. 

Does creating more retail 

space still make sense today? 

The answer here is a clear "yes". "The demand 

for high-quality shop space in prime locations 

is still high, and in addition, due to the 

economic situation, there is still sufficient 

"How high the decrease 

in turnover actually is as a 

result of the e-commerce 

campaign is not being 

openly discussed 

in the industry." 

Hannes Lindner, 

Location & Market 

liquidity to be invested in modern, highquality 

shop space," explains Lindner. Some 

locations, including weak Class B and Class C 

locations, will probably have to be abandoned 

in the course of modernizing the commercial 

landscape, which will have a notable impact 

on the value of real estate. 

Many medium-sized retailers are justifiably 

asking themselves whether their business 

model is still attractive for the target group of 

online enthusiasts under the age of 30. "The 

answer lies in the digitalisation of the space 

and in the strategic linking of online shopping 

and store branches. Of course, shops in 

less frequented Class B and Class C locations 

are increasingly being replaced by web shops, 

but business always takes place where the 

people are. Now the politicians must also 

ensure that taxes are levied where consumers 

are. That's what we understand by FairCommerce," 

is Will's optimistic conclusion. n 


37


E-Commerce Austria 2018 

The "E-Commerce Study Austria 2018: Home Shopping Consumer Behavior " by the Austrian Trade Association and the "Mail Order and E-Commerce" 

platform in cooperation with the Austrian Institute for SME Research shows a 2 percent increase in the number of buyers for 2018 and a 4 

percent increase in expenditure in home shopping (classic mail order + e-commerce), a change in purchasing behavior and a massive increase of 

20 percent in smartphone shopping. 

According to the study, almost five million Austrians made home shopping purchases locally and abroad during the 2018 analysis period, spending 

a total of around 7.9 billion Euros. This corresponds to more than one-tenth of retail-relevant consumer spending. The top product groups are 

clothing (1.8 billion Euros), electrical appliances (1.1 billion Euros) and books (0.7 billion Euros). 

Online shopping is growing dynamically, as does outflow abroad 

More than 90 percent of home shopping spending is already done online (7.2 billion Euros), which corresponds to an increase of 6 percent over the 

same period last year. However, 57 percent of consumers now buy from foreign online merchants, and loyalty to domestic providers continues to 

decline. Spending in the traditional mail order business has also declined, with a minus of 12 percent or 100 million Euros. 

Smartphone Shopping & Voice Commerce on the advance 

The dynamics of online shopping are even surpassed by the boom in smartphone shopping. A quarter of Austria already buys on the Internet 

using the smartphone, spending currently stands at 640 million Euros. The megatrend Voice Commerce has just began in Austria. Nevertheless: 3 

percent or 200,000 Austrians already use Internet-based personal assistants such as Amazon Echo or Google Home, and 0.2 percent have already 

made purchases using them. 

E-Commerce Study Austria 2018 | Home Shopping Consumer Behavior 

HOME SHOPPING 

• Mail Order 

• Internet Retail 

• Internet via Smartphone 

+100,000 

= 2 % 

5.0 million Home Shoppers 

= 67 % of Austrians (from age 15) 

+300 million Euros 

= 4 % 

7.9 billion Euros spent 

shopping locally & abroad 

11 % 

of total, 

retail-relevant 

consumer spending 

ONLINE SHOPPING 

• Internet Retail 


+200,000 

= 5 % 

4.3 million Online Shoppersr 



= 6 % 

7.2 billion Euros spent 

shopping at home or abroad 

10 % 

of total, 



SMARTPHONE SHOPPING 


+300,000 

= 20 % 

1.8 million Smartphone Shoppers 



= 20 % 

640 million Euro spent 

shopping at home or abroad 

1 % 

of total, 



38 ImmoFokus

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39


Changing Face 

of Retail Trade 

Transformation. The market for retail properties is currently the most 

difficult segment of the Austrian real estate market. Nevertheless, some 

positive signs could recently be noted. The decline in floor space has 

slowed down lately. 

by:Andreas Altstädter 

A 

ustria also started from an extremely 

high level and was rather 

oversupplied with retail space 

compared with rest of Europe as 

a whole," explains EHL retail trade expert Jörg 

Bitzer. "The consolidation is therefore good for 

the market in any case.” The low production of 

new floor space and the increased alternative 

use of the ground floors are exerting additional 

pressure on the market. The retail market is the 

one that is developing and changing most dynamically 

due to the rapidly changing shopping 

behaviour of the consumers. "There is no way 

that things will get boring in the retail sector,” 

says Walter Wölfler, Head of Retail Austria & 

CEE CBRE. 

The stock of shopping space in Austria is growing 

moderately, with around 43,000 square 

meters of new shopping space having been 

Trend 1 

SITE OPTIMIZATION 

AND AREA REDUCTIONS 

The High Street reacts to Amazon & Co. 

While online shares have reached one 

third of the market volume in some sectors, 

expansion in stationary retail trade 

has become extremely restrained. Site 

optimization and area reductions have 

come to the forefront. 

built in 2018 - primarily extensions of existing 

shopping centers. In line with the trend, great 

importance was attached to food & beverages 

and entertainment in the course of the expansions. 

All in all, Mr. and Mrs. Austria have around 

13.7 million square meters of shopping space at 

their disposal, still a top European figure. At the 

end of the year, the top rent in the retail sector 

was 310 Euros per square meter and was achieved 

in the inner city of Vienna. 

The dominant topic is the continued disproportionate 

development of e-commerce, in 

particular that of Amazon. Although the traditional 

shops remain the most important sales 

channel, their function is expanding. They 

have a positive influence on the development 

of online sales in a region (a "halo effect"). In 

addition, they will be upgraded for convenient 

processing of "Click & Collect" orders. Retailers 

tend to focus on fewer locations, but on larger 

areas to showcase their companies and brands. 

"Retailers are becoming more selective, taking 

a closer look at the space and considering market 

entries as well exits very carefully," says 

Wölfler, pointing out the 25 new entries in Austria 

in 2018 (compared to 32 in 2017) - including 

brands such as Apple, Decathlon, Manufactum, 

& other stores like Le Creuset and Hema. Bitzer 

assesses the prospects as overall positive, "Vienna 

in particular is an excellent retail location 

in the medium and long term due to its rapidly 

growing population, its high economic power 

"In 2018 the 

total selling 

space declined 

by just over 

1.9 per cent, 

by 2017 it had 

already been 6 

per cent." 

Fotos: Michael Nagl, CBRE, Alexander Schleissing 

40 ImmoFokus

MILLENIUM CITY 

and booming tourism, and is one of the most 

sought-after expansion destinations of global 

chains. Of course, newcomers initially only 

need limited space, but if the start is followed 

by an Austria-wide roll-out, these new players 

will very quickly become noteworthy clients 

demanding further locations.” 

Enough shopping space in Austria 

The decline in floor space will also continue at a 

moderate rate in 2019. In the meantime, Austria 

is only number five in the EU in terms of sales 

area/population, an important key figure, since 

a few years ago, it was still at the top of the rank. 

"There is certainly enough shopping space 

"There is no way that 

things will get boring 

in the retail sector." 

Walter Wölfler, 

CBRE Austria 

in Austria overall, but not always in the right 

place," says Bitzer. "Particularly where there is 

still strong demand from Austrian and international 

chains, such as in the city of Salzburg, 

there is hardly any chance of obtaining permits. 

On the other hand, in Burgenland, which is already 

very well supplied with shopping centers 

and specialist retail centers, further reclassifications 

for retail space are obviously quite easy to 

acquire." 

In the top Viennese locations on Kohlmarkt and 

Graben, no new space can be conjured up - nevertheless, 

demand here would be higher than 

in any other domestic retail location. As a re- 


41


Trend 2 

THE BIG NAMES ARE MISSING 

According to a recent annual survey conducted 

by RegioData Research on more 

than 800 chain stores and franchise 

systems, approx. 460 Austrian retail and 

commercial companies are planning to 

expand this year. This figure is about 15% 

down from the previous year and about 

40% less than 5 years ago. A few years 

ago the big chain stores trading in clothes, 

shoes, furniture, etc. were looking for new 

locations. In the meantime this role has 

been taken over by smaller companies. 

Food retailers represent the exception – in 

this sector expansion remains vigorous. 

Trend 3 

SUPPLY OF SPACE 

EXCEEDS DEMAND 

If one balances the expansion requirements 

for 2019 against the anticipated 

branch closures, then this year (for the 

first time in ten years) will see more abandoned 

sites than new openings for retail 

and commercial services (system gastronomy, 

banks, travel agencies, hairdressers, 

etc.). A decade ago, this was down to 

the impact of the economic crisis - now 

it is online trading that leads to closures. 

Consequently, this trend does not apply 

to sectors that are not or little affected by 

online retailing: food retailers, chemists 

and system gastronomy. 

Trend 4 

THE HIGH-FLYING SECTOR: 

SYSTEM GASTRONOMY 

The system gastronomy sector is seeking 

the majority of sites. Since both Austrians 

and tourists are spending more and more 

money on eating out year upon year, the 

potential as well as the possibility of expansion 

strongly increase. But even here 

it's no longer only the big players, but many 

new, small companies that are testing 

their fortunes with innovative concepts. A 

total of 76 different gastronomic concepts 

are looking for new locations this year. 

sult, prime rents in the city center were able to 

maintain their high level, while investors in virtually 

all other locations had to accept price 

reductions for new and subsequent-rental 

properties recently. With a stable 400 Euros 

per square meter in the luxury locations in 

the first district, Vienna remained one of the 

ten most expensive high-street locations in 

the world in 2018. 

Bitzer expects the trend of retail space in large 

shopping centers to be partially replaced by 

gastronomy, entertainment and services to 

increase. "One used to assume that a shopping 

Rents in shopping centres & retail parks / Q4/18 

NET RENT EURO/SQM/M 

TREND 

Prime location 40 - 120 stable 

SCS, Donauzentrum, Auhof Center etc. 

Secondary location 15 - 40 slightly decreasing 

Q 19, Lugner City, BahnhofCity Wien West 

District centres 8 - 12 slightly decreasing 

Retail parks 8 -13 stable 

Source: EHL Market Research, Q1 2019 

Rents in top shopping streets / Q4/18 

SHOPPING STREET 

NET RENT EURO/SQM/M 

Kohlmarkt 250 - 400 

Graben 190 - 300 

Kärntner Straße 110 - 300 

Innere Mariahilfer Straße 30 - 110 

Rotenturmstraße 30 - 120 

Favoritenstraße 15 - 55 

Neubaugasse 15 - 55 

Landstraßer Hauptstraße 10 - 50 

Meidlinger Hauptstraße 10 - 30 


center without a strong anchor tenant, such as 

one from the electronics sector had a problem. 

Today an attractive selection of restaurants 

has become a must-have. In the coming years 

innovative entertainment offers will become 

vital. Unique experience, variety and individualisation 

are the trends of the future, which 

developers and operators have to face in order 

to make the stationary retail trade attractive in 

the long run.” These would include the integration 

of interactive locations such as language 

schools and sports facilities, but also greater 

regionalisation and individualisation both in 

design and in variety of shops. 

n 

"In 2018, around 43,000 square 

meters of new shopping space was 

built - primarily as extensions of 

existing shopping centers." 

42 ImmoFokus

I 

M 

M 

O 

SHOPPING CENTER 

Trend 6 

CLOTHING RETAILERS 

LEAD WITH EXPANSION- 

ORIENTED DISTRIBUTION LINES 

Shopping Center Vienna 2018 

… PROPERTY GLA 

Donauzentrum 1220, Wagramer Straße 81 123,900 sqm 

Auhofcenter 1140, Albert Schweitzer Gasse 6 54,000 sqm 

Millennium City 1200, Handelskai 94-96 51,800 sqm 

Huma Eleven 1110, Landwehrstraße 6 50,000 sqm 

Lugner City 1150, Gablenzgasse 5-13 38,300 sqm 

Shopping Center Nord 1210, Ignaz Köck Straße 1 32,000 sqm 

Gerngross City Center 1070, Mariahilfer Straße 42-48 31,000 sqm 

Wien Mitte - The Mall 1030, Landstraßer Hauptstraße 1C 28,900 sqm 

Stadion Center 1020, Olympiaplatz 2 27,700 sqm 

BahnhofCity Wien Hauptbahnhof 1100, Am Hauptbahnhof 1 23,000 sqm 

Riverside 1230, Breitenfurter Straße 372 22,000 sqm 

Zentrum Simmering 1110, Simmeringer Hauptstraße 96a 21,000 sqm 

BahnhofCity Wien West 1150, Europaplatz 3 20,000 sqm 

Kaufpark Alt Erlaa 1230, Anton Baumgartner Straße 44 18,900 sqm 

Gasometer City 1110, Guglgasse 6-14 18,000 sqm 

City Gate 1210, Wagramer Straße 195 17,500 sqm 

Columbus Center 1100, Columbusplatz 7-8 17,300 sqm 

Trillerpark 1210, Trillergasse 4 15,500 sqm 

Shopping centers with more than 15,000 sqm of retail space are listed 


Even though the stationary clothing 

trade is severely affected by the online 

trading of "pure players" such as Amazon, 

Zalando, Universal, Otto, etc., more 

than 100 sales lines are planning to 

expand this year (as opposed to 162 in 

2017). This development does, however, 

not feature the big, popular chain stores, 

but rather very small, specialized labels 

or discount-oriented traders (like Kik 

and Takko). 

Trend 7 

EXPANSION ALMOST 

EXCLUSIVELY IN MALLS 

AND THE HIGH STREET 

93 percent of all expanding companies 

are seeking sites within a shopping 

centre or an inner-city high street - only 

the best locations are attractive, while 

anywhere else is barely worth a mention. 

Additionally, 35% of the examined 

sales lines are looking for locations with 

less than 200 sqm of retail space, a significantly 

higher percentage than only a 

few years ago. 

Trend 8 

Trend 5 

FRANCHISE ON THE RISE 

After branch systems or marketing organizations 

and groups (such as Intersport, 

Red Zac, Garant Furniture, RingSchuh) 

have shaped the retail landscape over the 

last decades, it is franchise systems that 

are now becoming increasingly important. 

Within the clothing and gastronomy sectors 

in particular, the number of sites operated 

by franchisees is constantly increasing. 

This is true both for large companies 

such as New Yorker, Mango, Tom Tailor, 

McDonald's, Burger King or Starbucks, but 

also for many small, new companies that 

are relying on this form of distribution. 

"Austria has a surplus 

of retail space." 

Jörg Bitzer, 

EHL Commercial Real Estate 

FOOD RETAILERS 

ARE UNIMPRESSED 

The changes currently taking place in the 

retail sector have left food retailers completely 

unimpressed: the market leaders 

as well as the small, specialized companies 

are expanding (and have been for 

years), be it cash-and-carries, supermarkets, 

discounters or bakeries. Hardly 

surprising, considering that the market 

volume in the food trade has been rising 

above inflation for many years, the 

environmentally and health-conscious 

consumers are buying more expensive 

products and the food trade seems to 

be feeling immune to the internet. The 

same applies to the drugstores. 


43

About 

Stefan Goigitzer is one of Coore’s managing partners 

and is responsible for retail and retail investment. He is a 

qualified real estate fiduciary and has been in the 

industry for 25 years. 

Active management is the order of the day 

Comment: Stefan Goigitzer 

n Although stationary retailing was able to record an increase in 

2018, above all thanks to significant growth in the DIY/home improvement 

supplies and sporting goods sectors, the growth rates of 

2017 could not be achieved. Both the textile trade and the leather and 

footwear sectors suffered a considerable decline. This deficit is not 

surprising, since these two segments are in strong competition with 

online trade. Expectations are that the stationary textile trade will 

continue to come under pressure, notwithstanding this segment's 

efforts of streamlining concepts and increasing efficiency. The 

merging of online and stationary trading is still on the rise, multichannel 

being the word de jour. 

But what does that mean for the retail sector and the high streets in the 

federal capital? In the last 10 years, rents have risen steadily, particularly 

in Vienna. The increases reached levels that required peak sales 

in order to afford these rents. This development seems to have ground 

to a halt for the time being. Does this mean the end for our beloved 

shopping streets in the long run? Certainly not! 

But we are noticing that, in many cases, retailer are struggling to pay 

the (too) high rents. Tenants are therefore no longer willing to make 

long-term commitments – something that other sectors have experienced 

for a long time already. In future, retail leases will become shortterm, 

more flexible and sales-dependent. The active management of 

retail spaces is the order of the day. Large shopping centres find it 

easier to adapt to new circumstances and to respond accordingly due 

to their active space management, however, they do not have the natural 

footfall of an inner-city high street. But why shouldn't real estate 

owners on a shopping street hand over their retail space to an operator 

who looks after advertising, marketing and an attractive tenant mix 

that guarantees the sustainable stability of the street? Such a concept 

would benefit mainly smaller shopping streets. The major shopping 

streets in Vienna's Inner City – Graben, Kärntner Straße and Kohlmarkt 

- on the other hand, greatly benefit from tourists. It is, however, 

worth noting that even here rents can no longer be achieved easily and 

smaller-scale concepts are on the rise. 

No question: retail is changing. But was this not always the case? A 

look back proves that this is not a new development. From the small 

grocery store to the supermarket, from the tailor around the corner 

to the multinational textile chain. Retail has always adapted and will 

continue to do so. Despite online trading: Our shopping streets will 

continue to be heavily frequented, will generate good sales and will 

not deteriorate into outsized packing stations. 

44 ImmoFokus

More competence. 

More determination. 

Your success. 

Dr. Anton Bondi de Antoni 

OUR SERVICES RANGE COMPRISES ALL 

SERVICES CONNECTED TO REAL ESTATE: 

• Land acquisition, determination of needs and 

process organization as well as planning 

• Construction and turnkey delivery of properties 

• Project management and controlling 

• Due dilingence on properties or portfolios 

on behalf of investors 

• Structuring, coordination and 

negotiation of acquisition and 

Winter 2018 45 

sale of real estate 

WWW.BONDICONSULT.COM

Positions & Options 

Wordrap - amongst 

real estate managers 

"Engaging the Future,” the central topic of MIPIM 2019, will take a look at the next 30 years of 

tthe real estate industry. Ecological sustainability is a focal issue. High energy costs, climate change and new 

government regulations are changing the traditional platforms and practices of the industry. There will also be 

debates on how disruptive technologies such as virtual reality, artificial intelligence and big data will optimize real 

estate business management and profitability in the digital age. 

ImmoFocus has been talking to the leading real estate managers. 

THE QUESTIONS 

Virtual reality, augmented reality, big data, blockchain? Which technologies will change the real estate 

industry in the long term? 

An endless real estate cycle? Is time running out on the real estate clock? Is it already 5 to 12? Or will it carry 

on for a while? 

I am convinced that BigData will probably bring about the biggest changes in the real estate industry. 

Just a small example of this: Until now, the catchment area of shopping malls has been surveyed 

by means of concentric circles and it has been assumed that people in more distant circles will shop 

less often. Today, we have a product called Calibrate, which, based on mobile data, can pinpoint 

the exact shopping habits of people from a certain residential area of workplace. Furthermore, 

self-driving cars will probably have a tremendous impact on particular location qualities, but also on 

the need for parking spaces. No stone will be left standing – literally. 

We believe that the current cycle is slowly coming to an end; for example, we do not expect any significant 

increases in value. On the other hand, we do not expect prices to fall sharply in the foreseeable 

future either. This is mainly due to the interest rate expectations: these will probably no longer 

rise significantly, leaving with this very unusual "low interest rate landscape", which has – of course 

- been responsible for the property boom of recent years. 

2 

Andreas Ridder, 

CBRE Austria & CEE 

46 ImmoFokus

Thomas Belina, 

Colliers International 

2 

The speed of technological development is increasing disproportionately, proptech is the concept 

of the hour and new companies offering solutions in this area are appearing on the market in large 

numbers. For some years, we have been using smartphones and loading apps onto our devices. 

We use some applications regularly and over a longer period of time, while many do not deliver the 

expected added value and are deleted again. The same is true of services offered for the real estate 

industry (and this also applies to all other sectors of the economy): we are in a state of transformation, 

of invention, of trail-and-error. What is certain is that the industry will change significantly 

over the next few years - and as a service provider we will have to change with it. Nevertheless, we 

are convinced that the professional, personal service will continue to have its place in the future. 

Technological aids such as VR will support and facilitate, but not completely replace the work of the 

real estate agent. 

Would say we are in about the ninth hour on the real estate clock - and if we look at the real 

estate market retrospectively, we have been there for about 3 years. We believe this will remain 

unchanged for the next 1 to 2 years, as we continue to expect low interest rates, ongoing strong 

demand and sufficient liquidity in the market for the time being. 

Join us at 

MIPIM, Cannes, 

12.–15.3.2019, 

stand R7.E2 

www.erstegroup.com 

Take new perspectives to find 

new possibilities in real estate. 

We see the big picture and manage the details that are necessary to develop commercial 

real estate projects all over Central and Eastern Europe. Erste Group offers financing 

solutions for your visions across the entire real estate value chain. 

Time to believe. Time to invest. 


47


Within the real estate industry longevity is a key feature as opposed to the digital world, which is 

rather short-term or fast-moving. In order to unite these two worlds in a meaningful way, it is necessary 

to carefully evaluate which technology can be used to an advantage and to keep an eye on 

future prospects. In general, the real estate industry can not escape the digitization trend. For example, 

virtual reality is playing an increasingly important role in commercial realisation as the topic of 

Big Data in the asset management of retail space. 

There is no one singular real estate cycle. You always have to look at every single market - 

even within a region or country - and every asset class separately. Overall, we are currently 

experiencing a boom in several markets and there are some indicators that suggest this will 

continue for a while. The real estate markets are booming, interest rates are still at a very low 

level and there is a lot of money in the markets. For the real estate industry these are very good 

conditions. Some markets have already become too expensive for us to acquire properties 

there, but with the right know-how and corresponding market expertise you can still find real 

estate with the potential for increased value. 

2 

Ernst Vejdovszky, 

S IMMO 

The digitization of the real estate industry will intensify massively in the coming years. In the further 

development and marketing of the AirportCity Vienna, we already use Virtual Reality in order to 

provide our customers with a realistic impression of the Office Park 4 under construction at an early 

stage. But augmented reality will also play a major role in the usage pattern of our tenants as well 

as passengers in the coming years. 

Wolfgang Scheibenpflug, 

Vienna International Airport 

2 

We are clearly in a late-stage economic phase, with factors such as central bank interest rate policy 

and political developments playing a key role and consequently requiring intense scrutiny. 

The big challenges of the coming years will be blockchain and how we deal with the ever larger 

amounts of data that are being evaluated and processed. Especially in the area of property management, 

the requirements and possibilities are increase exponentially. All technical systems, 

machines, entire buildings and their users will probably be connected, communicate and interact 

with each other in the future. Virtual and augmented reality are also developing rapidly. Potential 

users can see and understand things in the real estate construction phase without actually being 

there. Artificial intelligence also allows chat bots to serve customers faster and more efficiently 

around the clock. All in all, there is great technological momentum which will change dimensions in 

the years to come. 

The decline in real estate yields, especially in the last two years, is motivating many market participants 

to keep a close eye on the continuous development of both prices and yields. None of us 

have found a definite answer to this question, but if you look at the causes for the strong demand, 

like interest rates, high liquidity, new investors from exotic countries, etc., then the next 18 months 

– at least – will not bring any real change to the market. Our perceptions among customers also 

suggest that there will be no significant trend reversal in the medium term. 

2 

Michael Ehlmaier, 

EHL 

48 ImmoFokus

While virtual reality and augmented reality provide positive support for object presentations, 

but I don't see the disruptive potential as much as with big data and blockchain. Big data has 

been used by many professionals in the branch for a long time and has already changed some 

of the processes that are customary on the market. When it comes to blockchain the industry 

as a whole is only just beginning and there is no doubt that first movers have a great opportunity 

not only to sustainably change the market but above all to play a decisive role in shaping it. 

Richard Lemon, 

Danube Property Consulting 

2 

It’s been 5 to 12 for over for two minutes and until the clock strikes 12, developers in particular still 

have time to bring their sheep in out of the rain. The increase in the key interest rate is coming 

noticeably closer and in the medium term, a level will be reached that will change the investment 

behavior of institutional investors and thus also be of great relevance for the real estate market. 

Virtual Reality, Augmented Reality and BigData have been defining features for customers and service 

providers in the real estate industry in recent years and have already fundamentally changed 

our business. Virtually complete smartphones coverage and the upcoming 5G standard will further 

increase the pace of change! Let us cross the bridge when we get there! 

We seem to have been at the eleventh hour for a couple of years now and will continue to be there for 

a few more, depending on the sector in question. Stable and, in international comparison, conservative 

markets such as Vienna still show no overvaluation and therefore no potential for correction. Price 

development is, however, slowing down and excess supply is limited to certain market segments. 

2 

Otto Eugen 

Otto Real Estate 

Join us at 


12.–15.3.2019, 

stand R7.E2 


We believe. We realize. 

Eiffel Palace, Budapest 

Landmark building in CBD Budapest, designed by Gustave 

Eiffel and fully redeveloped into a state of the art A class office 

building, rentable area: ca. 15,300 m 2 , fully let. Acquired by 

DEREIF SICAV-FIS, a DEVK Group fund – financed by Erste Group. 

Commercial Real Estate Finance – 

Your Banking Partner for Central Europe. 



49 

© Horizon Development Kft


The digitization of the real estate industry is already a reality and we are in the middle of fundamental 

change. Artificial intelligence and smart buildings are concepts that are playing an increasingly 

important role in the elevator industry. On the one hand, there is demand to connect existing systems 

and creating added value for customers and users by means of data analysis tools, by further 

increasing the comfort, safety and availability of our systems. On the other hand, new technologies 

allow the development of tools and concepts that were previously unreasonable or simply impossible. 

Smart building access, smartphone operation, digital blackboard, re a few concepts that come 

to mind. However, what we should not lose sight of are the needs of the user. We have to give them 

the chance to see the benefits of new technologies and not to overload them with complicated processes. 

In the long run, however, I'm convinced that everything that makes life easier will prevail. 

The economic drivers are intact and there continued investor interest in real estate. Despite these 

stable conditions for the Austrian real estate market, this cycle will also come to an end at some 

point. Regardless of the level of interest rates or the current high, we are pondering the question of 

how the needs of property users are evolving. How do we live and work, how do we shop and how 

do we organise our leisure time tomorrow? These questions are what drives us as a manufacturer 

and defines our offers for new construction and modernization. 

2 

Gernot Schöbitz, 

KONE 

Only technologies that yield significant benefits and are easy to use will prevail in the long term. For 

example, we have been using Virtual and Augmented Reality for a while in order to present projects 

to interested parties even before the start of construction or in the shell construction phase. The 

possibilities are manifold, from planning to management and trading we still have a lot of digital 

potential. However, the protection of personal rights – think GDPR – is a limiting factor that can not 

yet be fully assessed. 

Andreas Quint, 

CA Real Estate 

2 

We do not expect a decline of the good market situation in Central and Eastern Europe any time 

soon. Our existing portfolio is fully let, demand and price levels are high to stable. We see no signs 

of a cycle change, rather the beginning of stabilization at a high level. 

Currently, numerous digitization trends are gathering strength. Which of these prevail only time will 

tell. However, one thing is already clear: Living no longer stops at the front door of the apartment 

and one's own four walls. The digital network of the object, property management, residents and 

the neighbourhood will be an integral part of our business in the future. The digital infrastructure of 

a particular borough will also play a decisive role in the creation of the 'living experience'. Innovative 

apps - such as "puck. - invite the good spirit into the house "- will significantly advance digitization. 

An end to the real estate cycle is certainly not on the horizon, due to the high demand, which in turn 

is caused by a lack of investment opportunities in other resilient asset classes, and continuing low 

interest rates. It is expected that at this level, we will essentially see a sideways market movement 

over the next few years. In particular, the economic conditions, the unforeseeable consequences of 

BREXIT, the protectionist customs and foreign policy of Donald Trump and the associated need for 

secure investment forms, will ensure that demand in all major real estate asset classes continues 

to be buoyant. 

2 

Daniel Jelitzka, 

JP Real Estate 

50 ImmoFokus

Anton Bondi de Antoni, 

Bondi Consult 

We are currently confronted with an abundance 

of new digital and virtual processes, all 

of which will have an influence on the further 

development of real estate. This concerns 

the planning as well as the operation (facility 

management). The project development, the 

feeling for trends and requirements cannot be 

replaced by any of these procedures. In the field 

of planning, far-reaching changes/improvements 

are to be expected (key word BIM, etc.), 

while in the field of real estate operation a very 

high degree of technological implementation 

already exists and efforts will have to be made 

to make the procedures easily comprehensible 

and applicable for the user (and not only for the 

specialist) in order to be able to draw general 

benefits from the major changes. 

Join us at 


12.–15.3.2019, 

stand R7.E2 


2 

There are already indications that the pace is 

slowing down and that the speed of development 

is diminishing significantly. This certainly 

has something to do with the absurd low 

returns that are currently offered on the market.... 

and for lack of alternatives, also being 

accepted. The prospect of even a slight correction 

in interest rates can be a huge stumbling 

block. We are actually two minutes to twelve, 

but as long as there is so much money in the 

market and supply is scarce, a continuation of 

this rally at the high level is to be expected at 

least for the next two years. However, a further 

drop in yields is no longer to be expected. 

We believe. 

We enable. 

Marriott Hotel, 

Warsaw 

Multi-use real estate property, including the country’s 

biggest 5-star hotel with 523 guest rooms and more 

than 25,000 m² of exclusive inner-city offices and retail 

areas in an outstanding downtown location. Owned and 

managed by Golden Star Estate – financed by Erste Group. 

Commercial Real Estate Finance – Your Banking 

Partner for Central Europe. 



51


We see digitization as an important factor in increasing our customer service. This means a comprehensive 

transformation of our business processes as well as our entire customer communication. 

Against this background we have redesigned our customer relationship management (CRM), 

to name one example. This involved the digitization of the leasing process, as well as central handling 

and processing of customer inquiries and contact data. The myhive app further increases the 

level of service we provide, giving us direct feedback and offering additional services to our tenants. 

I perceive the real estate cycle to be at an advanced stage, especially with regard to the German 

market. It is crucial for us to be well-prepared for any market environment - and we are. Over the 

past few years, we have invested in the quality of our services, significantly increased the occupancy 

rate, reduced financing costs and achieved a sound liquidity situation. At the beginning of 

the year, IMMOFINANZ also received an investment grade rating - another seal of approval for our 

strategy and the strength of our financial profile. As a result, we are in a position to take advantage 

of sudden opportunities in a changing market environment. 

2 

Oliver Schumy, 

Immofinanz 

Wolfgang Hausner, 

Erste Group Immorent 

Virtual reality, augmented reality: I think that both techniques have a significant influence on the 

real estate industry, because they affect consumer behaviour, keyword here is online shopping 

and therefore the classic retail spaces are reduced or changed towards product placements and 

showrooms, but no more shopping, this is done online. This will also change the tenant structures. 

The Amazons of this world are already investing massively in logistics because this segment will 

grow while the retail spaces, which are not local suppliers, will tend to reduce. Hotels are already 

virtually visited and evaluated today. The acquisition and leasing of properties as well as their setup 

will also be made much easier in the future via augmented reality. The future tenant/buyer/user 

can quickly receive important preliminary information. Big data: Data on the asset, its components 

and condition and the associated user behaviour/user data will in future contribute significantly to 

the optimization of running costs/operating costs as well as enhance the architecture and space 

planning. Blockchain: This technology will significantly facilitate and accelerate transactions, whether 

asset transfers or funds/banking, over the entire life cycle of the property, including construction 

phase/development. The documentation quality and its sustainability will remain high and always 

available. Related services that are associated with transactions today, such as contract preparation, 

valuations, etc. will become much easier whereby the need for soft skills and expert knowledge will 

not disappear, since these cannot be replaced. 

Which technologies will change the real estate economy sustainably? 

Building materials: New, lighter building materials that meet all the necessary requirements, concrete 

and steel will become too expensive because it’s energy-intensive and the carbon footprint is 

too high. Building services: Energy-autonomous smart buildings, from photovoltaics, water storage, 

cooling, combined heat and power generation, power storage starting with multipurpose usability, 

supporting flexibility over a lifetime. High Speed Internet 5G and so on: Mobile jobs will reduce the 

space requirement in the shared office to 80% because home office possibilities etc. support this. 

Online commerce, with the implications mentioned above. 

2 

Austria: Price peak has been reached, but liquidity remains, as zero interest rates are likely for the 

next few years, therefore no exit of the investors to alternative investment fields. Yields, therefore, 

remain constant over the medium term – so it is still 10 to 12 in that sense. In my personal opinion 

it will remain so for another 3 years. CEE: Balkan region for local investors, no boom, Romania and 

Poland still in the plus zone, Hungary currently in recovery, Slovakia growing (logistics and trade), 

Czech Republic slight growth. 

52 ImmoFokus

The use of virtual and augmented reality in the real estate industry is only just beginning. But it has 

great potential, especially in the planning and viewing of properties. The change can be seen in the 

large number of start-ups offering new technical solutions and innovative business models. 

Prices on the real estate market have risen rapidly. The fear of a bubble is largely unfounded, as 

there is a high level of equity investment. The boom will continue in attractive cities, although at a 

slower pace than before. Investors should therefore become more selective in 2019. 

2 

Markus Arnold, 

Arnold Real Estate 

Societal change and new technologies are, naturally, having a massive impact on the real estate 

industry. Digitization is taking place in almost all areas of life, and we are currently intensively 

involved in product development. The topic of digital buildings is becoming more and more important 

- from the digital twin from the point of view of BIM, to the use of buildings in terms of a fully 

digitalised building, especially in the commercial sector. Virtual Reality and Augmented Reality will 

soon be indispensable in sales terms. 

Walter Hammertinger, 

IC Development 

2 

The high rate of innovation that currently exists in various economic markets means that other 

asset classes are rapidly leading to a new upturn in the real estate industry. There are currently 

no sustainable signs, neither in the interest rate nor in the demand market, that indicate an end 

of the cycle. 

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53


Christoph Stadlhuber, 

Signa Holding 

Digitization is affecting our everyday lives more and more. Within the real estate industry the pace 

of development has also picked up recently, after many real estate companies deemed the impact 

of digitization on their business as low only a few years ago. At SIGNA, we see digitization as an 

opportunity and want to become a pioneer and driver of digital services and new business models. 

We monitor future trends and are integrating innovative products into SIGNA's value chain. SIGNA 

has been utilising Virtual Reality tours for its office properties under construction since 2015. With 

the help of Oculus glasses in situ, or randomly via tablet and smartphone, interested parties can get 

a clear picture of what the finished object will look like. This technology makes the property tangible, 

illustrates the layout and conveys a feeling for the space, thus creating clarity for the customer 

very early in the decision-making process and thus accelerating it. In housing sales, digital and virtual 

realities of the property are becoming increasingly important for future owners. New technologies 

- such as HTC VIVE – are allowing them to move freely and independently within the rooms. 

This is particularly interesting for the housing sector, since this where we primarily address private 

customers. Another option is the ability to stroll through the future property at a leisurely pace using 

a gamepad. Soon it will be possible for the client to select possible floor and tile options within this 

virtual environment by using the configurator. It makes decisions easier and gives the customer a 

real idea of what their new home will look like. The customer demands more and more individuality 

from the real estate and construction industry. Tools like Virtual Reality aid this enormously and customer 

feedback is very positive. However, no amount of digital technology can ever replace the personal 

advice of an agent. Innovations such as smart data, blockchain or even building information 

modelling pose no threat to established business models, but their added value can lead to greater 

transparency, planning security, speed and savings. In general, it's not just about discovering new 

things, but more about constantly reflecting on the viability of one's business model. Only agile and 

innovative companies anticipate future markets and changing customer needs and thus manage to 

survive in a volatile environment. 

2 

The real estate cycle is dependent on interest rate development. We are currently in a prolonged 

period of low interest rates, which will continue this year. In the foreseeable future we expect only 

moderately rising interest rates. The economy is doing well, the inflow of people into the cities is 

still strong. For this reason, we do not expect an abrupt end to the current real estate cycle. On the 

contrary, the demand of institutional investors for high-quality neighbourhood developments in 

good urban locations, as provided by us, is unwavering. 

All these technologies will influence and change the real estate industry. For example, virtual object 

visits with the help of virtual reality and augmented reality technologies or big data applications, such 

as smart metering in the energy industry, data analysis, etc., as well as smart living functions. From 

a legal point of view, the possible effects of blockchain technology are the most difficult to assess 

because legal framework conditions and formal requirements would also have to be adapted. 

The position of the hands on the real estate clock depends not in the least on the asset class under 

consideration, although in our opinion the clock has not yet reached a level of the proverbial 11th 

hour in any class. Residential real estate, including micro-apartments, continues to be the most 

promising as far as we can see. Therefore, as long as the low interest rate phase continues, things 

will continue to move along. 

2 

Manfred Ton, 

CHSH Cerha Hempel Spiegelfeld Hlawati 

Peter Vcelouch 

CHSH Cerha Hempel Spiegelfeld Hlawati 

54 ImmoFokus

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Cannes, France 

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55 

- MIPIM ® is a registered trademark of Reed MIDEM - All rights reserved


Housing: 

Investors’ Favourite 

Gaining momentum. Austria's real estate market is booming at a high level. In other words: "High demand - 

price sensitivity - shortage of supply.” International institutional investors are buying despite falling yields. 

"The increase in the number 

of inhabitants is somewhat 

lower at the moment than 

in the years 2015 to 2017, 

but the currently low interest 

rate level continues to 

ensure that demand is well 

above supply." 


EHL 

T 

he housing market is booming – 

very much so - especially in the 

nation’s capital. The number of 

completions in 2018 rose again 

compared to last year to around 11,500 units, 

continuing the upward trend seen since 2013. 

This was mainly due to a whole series of notable 

major projects in the urban expansion 

areas. These included Hoch33 (1100 Vienna, 

341 units, Erste Group), 5in22 (1220 Vienna, 

265 units, SIGNA) and the construction activities 

of various property developers in the 

Seestadt Aspern. Although the increase in 

construction activity cannot fully compensate 

for the accumulated housing shortage 

in recent years (due to increased population 

growth), it nevertheless led to a moderate 

increase in rents and housing prices. In the 

quantitatively important medium-price segment, 

rents increased by around 5 percent on 

a Vienna-wide average, with some housing 

prices rising by up to 6 percent. 

After several years characterised by a significant 

increase in supply on the Vienna housing 

market, 2019 could bring an end to or at least a 

significant reduction in the dynamic, although 

the demand for residential space remains very 

high and the price level is correspondingly 

attractive for housing providers. The impending 

slack is triggered by political and judicial 

decisions that have a significant impact on the 

framework conditions for landowners, property 

developers and landlords. But more about 

this later. 

Building regulations 

are cause for concern 

"The increase in the number of inhabitants is 

somewhat lower at the moment than in the 

years 2015 to 2017, but the currently low interest 

rate level continues to ensure that demand 

is well above supply," says Michael Ehlmaier, 

Managing Partner of EHL. Even more important, 

however, are the changes on the supply 

56 ImmoFokus

Fotos: EHL, Buwog, Cityfoto 

side, confirms Sandra Bauernfeind, Managing 

Partner of EHL Living. The current completion 

boom in privately-financed apartments will be 

dampened in the short term by the sharp rise 

in construction prices, and in the medium term 

the new building regulations will lead to declines. 

"If a property was bought at a fair price in 

view of the expected rededication changes and 

suddenly a higher portion of subsidised dwellings 

is mandatory, then the whole calculation 

no longer adds up. At present, many property 

developers are trying to find viable solutions 

by negotiating with the city, but this inevitably 

leads to delays and urgently needed apartments 

will come onto the market later," explains Bauernfeind. 

Construction costs are driving prices up 

The development of prices for building land and 

the ever-increasing construction costs are the 

biggest problems facing housing developers in 

Vienna. The amendment to the building regulations 

announced in autumn 2018 provides for 

a two-thirds share of subsidised apartments in 

buildings on rededicated properties. It remains 

to be seen whether this will lead to a reduction 

in basic costs. 

Andreas Holler, Managing Director 

of BUWOG Group responsible for 

development, explains that although 

price-dampening effects are possible 

in the medium term, the amendment 

could also contribute to a shortage of 

supply in the short term. "Landowners 

whose properties are already dedicated 

to residential construction see an 

opportunity to raise prices once again 

because the new building regulations 

mean that areas still to be redeveloped 

in favour of the subsidised residential 

building will only be available to a 

lesser extent for privately-financed 

residential construction. On the other 

hand, potential sellers of land that has 

"Early changes 

in the demolition 

regulations 

unsettle 

developers." 

not yet been converted would rather postpone 

its sale for the time being rather than 

possibly sell it cheaper under the changed 

framework conditions. 

In locations closer to the centre, the uncertainty 

of property developers following the 

early introduction of restrictive demolition 

regulations has led to a sharp slump in the 

development of new construction projects. 

A ruling by the Supreme Court, which has 

led to drastic restrictions on the permissible 

location surcharges on regulated rents, has 

also had a negative impact on the supply 

of apartments. "With the current strictlyregulated 

rents, often the basic running costs 

Factbox 

can no longer be covered and therefore many 

owners of the old traditional apartment buildings 

leave the dwellings empty.” This development 

has no effect on the current supply 

of apartments because the planning and 

construction period is several years. "If we 

now have a larger gap in property purchases 

by property developers and rededications 

to building land, this will be reflected in the 

housing market in the coming years in the 

form of declining completion figures. 

At the moment, the partly drastic rise in construction 

prices and capacity bottlenecks have 

made themselves felt. "As one of the largest 

clients in residential construction and with consistently 

large-volume projects, BUWOG still has 

manageable and solvable problems," says Holler. 

"But with smaller projects the price increases are 

particularly high and therefore more and more 

projects ready for construction are postponed 

because the realization is simply not worthwhile 

with the current costs. Some smaller developers, 

who want to build despite the high prices, sometimes 

don't even get more offers.” Holler predicts 

that the gap between supply and demand 

on the Viennese housing market will close much 

more slowly than the current boom in completi- 

The development ranges from an inexpensive value of 1,550 Euros per square metre in Eisenstadt 

for a used condominium to 3,790 Euros per square metre in Vienna. The average price per square 

metre for a new building ranges from 3,154 euros in Klagenfurt to 6,401 Euros in Salzburg. It is 

astonishing that the new apartments in St. Pölten and Eisenstadt are still below the statistical 

average limit. 

As in the previous year, the average prices are still the highest in Salzburg, Innsbruck and Vienna 

according to the available land registry information. However, the second largest urban center after 

Vienna, Graz, is still a surprisingly cheap place to buy property. The average price in Linz is 219,000 

Euros for an apartment compared with 180,000 Euros in Graz if one considers the average values 

of used and new apartments as a whole. Salzburg, on the other hand, is 287,000 Euros, Bregenz 

as high as 316,000 Euros, which is even more than Vienna at 293,000 Euros. 


57


"New construction building 

will be dominated by numerous 

privately-financed 

major projects in 2019. 

"Smaller still is hardly possible 

without considerably 

downgrading housing 

quality" 

Sandra Bauernfeind, 

EHL Living 

ons might suggest. "Although we are unlikely to 

see such a dramatic undersupply in the coming 

years as between 2015 and 2017, it will still take 

quite some time before sufficient apartments 

are built to meet the rising demand and reduce 

the backlog from previous years. 

The BUWOG Group will also continue to expand 

its strong new building performance in 

Vienna in the coming years. 1,729 apartments 

are currently under construction, 688 apartments 

will start construction in 2019. With 

more than 800 apartments in seven projects 

in 2019, BUWOG is about to experience one of 

the most active completion years. 

Smaller still is hardly possible 

Meanwhile, the possibilities of offsetting 

rising square metre prices and rents by 

reducing the size of apartments appear to 

be exhausted. "Smaller still is no longer an 

option without considerably downgrading 

housing quality. But there will be no trend 

reversal towards larger apartments as long 

as prices remain high," says Bauernfeind. 

Although owned apartments are becoming 

smaller, they are becoming better and better 

equipped. This is also reflected in the construction 

and renovation costs. A few years 

ago, it was possible to thoroughly renovate an 

older apartment for 600 Euros net per square 

metre. Today the standard price has changed 

to about 1,000 Euro per square meter. Primarily 

responsible for this is the increased demand 

for quality materials, but also the fact 

that more and more technology is moving 

into our living spaces. A central air-conditioning 

system, which can also be used to heat 

in the transition periods, is a sought-after 

extra as the summer temperatures continue 

to rise. Flat or hidden LED lighting, wireless 

WLAN in all rooms, bus systems connecting 

building services and alarm systems are also 

often desired. Apartments with an unobstructed 

view are becoming especially popular. 

With modern technology such as soundproof 

windows in combination with modern living 

space ventilation, it is possible to eliminate 

location disadvantages due to traffic noise 

emissions. This creates new living opportunities 

in less popular (noisy) locations - and 

prices are also rising in this segment. 

District development 

The development of neighbourhoods where 

not only residential buildings but also infrastructure 

facilities such as schools and kindergartens, 

local suppliers and commercial 

properties are integrated into the planning 

is also becoming increasingly important. 

"Simply said, the developer is not looking for 

a good location for his residential buildings 

only, but also making sure that an average 

location could become a very good location," 

explains Andreas Holler, Managing Director 

responsible for development of BUWOG 

Group GmbH. What the city of Vienna is demonstrating 

on a grand scale with the Seestadt 

Aspern, private developers are implementing 

on a smaller scale in other districts. These include, 

for example, the major BUWOG project 

"Rivus" in Breitenfurterstraße (1230 Vienna), 

where around 800 apartments and, among 

other facilities, a school are being built in several 

construction phases. The development 

PREFIX 2010-2018 TOTAL 

Price Offer 

Demand 

7 

6,3 

6 

5,7 

4,9 

5 

5,6 

4,1 

4,5 

4 4,6 4,6 

3,9 

3 

3,4 

2,8 

2,4 2,5 3,9 

2 

2,4 

2,1 2,6 

0,7 

1,3 

1 

1,2 

0 

0,6 

-0,3 -0,3 -0,2 -0,1 

-1 

-2 

-1 

-3 

-2,3 

2010 2011 2012 2013 2014 2015 2016 2017 2018 

Source : RE/MAX 

"Even with the recent 

change of our legal 

form from AG to GmbH, 

BUWOG continues to 

focus its development 

activities in Vienna." 

Andreas Holler, 

BUWOG Group 

58 ImmoFokus

of the right bank of the Danube, for which BU- 

WOG together with IES Immobilien will realize 

a major project with an important message in 

the form of the MARINA TOWER, also falls into 

this category. 

The MARINA TOWER stands for a second major 

trend in Viennese residential construction, 

namely that of residential towers. With this 

and other objects, several towers with a height 

of more than 100 meters will come onto the 

market in the coming years. "If the building 

land is scarce and expensive, we'll just have 

to build upwards," says Holler. "In any case, 

we don't have to worry about the demand for 

apartments with a view over the entire the city." 

The number of completions will not be significantly 

affected yet in 2019 by the changes in 

framework conditions mentioned above. Bauernfeind 

expects the number of completions to 

stabilise at a high level of around 11,500 units 

and the increase in rents and housing prices 

will most likely not be significantly higher than 

the inflation rate. "New construction in 2019 

will continue to be dominated by numerous 

"Restrictions 

on location 

premiums 

lead to more 

vacancies and 

change from 

rental to sale" 

AN OVERVIEW OF THE AVERAGE PRICE RANGE 

ON OWNED APARTMENTS FOR 2018 IN THE STATE CAPITALS 

50% of apartment transactions were within the price range of … 

(25% cost more, 25% cost less) 

New 

Median 

Used 

purchase price in Euros per m² 

Vienna 

3.790 

4.432 

Bregenz 

3.084 

4.497 

Innsbruck 

4.125 

5.424 

Graz 

2.411 

3.407 

Salzburg 

3.648 

6.401 

St. Pölten 

1.818 

Klagenfurt 

1.655 

3.154 

Linz 

2.963 

3.887 

Eisenstadt 

1.550 

1.000 1.500 2.000 2.500 3.000 3.500 4.000 4.500 5.000 5.500 6.000 6.500 7.000 7.500 

Source: Purchase agreements according to the land registry, evaluated by IMMOunited together with RE/MAX 


59


privately-financed major projects. Housing 

will not become cheaper, but apartment seekers 

can choose from a wide variety of very 

different high-quality projects." "Even with 

the recent change of our legal form from AG 

to GmbH, BUWOG continues to focus its development 

activities in Vienna. As one of the 

fastest-growing cities in the German-speaking 

region, there is enormous development potential 

here, which we intend to exploit further 

in the coming years with even stronger new 

construction activities," says Daniel Riedl, 

CEO of Vonovia SE responsible for the entire 

BUWOG business in Austria and BUWOG 

development in Germany.The main focus 

VIENNA AT A GLANCE 

THE MAP OF VIENNA provides an overview of the city districts. 

T H E M A P O F V I E N N A provides an overview of the city districts. 

For better orientation, the map also shows underground metro 

F 

lines 

or better 

and major 

orientation, 

roads / motorways. 

the map 

Metro 

also 

lines, 

shows 

that are 

underground 

planned 

metro 

lines or currently and major under construction, roads/motorways. are shown M etro as broken lines that lines. are planned or 

currently under construction are shown as broken lines. 

PLANNED EXTENSION OF U2 METRO LINE 

PLANNED EXTENSION OF U5 METRO LINE 

CURRENT ROUTE OF U2 METRO LINE, 

TO BECOME U5 METRO LINE 

A22 

21 . 

U Leopoldau 

A1 

14. 

13. 

16. 

U Hütteldorf 

19. 

18. 

17. 

12 . 

15. 

U Floridsdorf 

U Heiligenstadt 

U Spittelau 

7. 

6. 

5. 

9. 

4. 

20. 

U Elterleinplatz** 

U Ottakring 1. 

8. 

U Stephansplatz 

U Karlsplatz 

U Westbahnhof 

3. 

2. 

U Simmering 

U Wienerberg ** 

S2 

U Seestadt 

22. 

11 . 

A4 

23. 

A23 

10. 

U Oberlaa 

** In planning 

A21 

U Siebenhirten 

S1 

VIENNA AIRPORT 

Source: EHL BUWOG - First Vienna Residential Market Report | 2019 

60 ImmoFokus

in the future will be increasingly on rental 

apartments. "After years of building mainly 

condominiums in Vienna, there is a lot of 

catching up to do with rental apartments and 

we are adapting our development focus to the 

current market conditions," explains Riedl. 

"In the medium term, the new construction 

of rental apartments will account for about 

40 percent of our output.” Present BUWOG 

rental apartment projects include the Nordbahnhof 

II in Vorgartenstrasse with 168 WBI 

rental apartments and ERnteLAA in Liesing 

with 191 residential units, 160 of which are 

also part of the Wiener Wohnbauinitiative 

(city housing project). 

n 

THE TABLE contains all key data and facts regarding population, income, property prices, and rents. The quoted prices 

are not asking or advertised prices but the prices that were actually paid upon signing of the contract. 

HE SECTIONS BELOW provide more detailed information on the individual districts, including key demographic data, 

statistics, and special features within the districts. 

Districts Residents Income* Sale Prices on Conclusion Rents on Conclusion 

FIRST 

OCCUPANCY 

OTHER 

FIRST 

OCCUPANCY 

1010 Vienna · Innere Stadt 16,450 34,482 € 18,600 € 11,200 € n/a** n/a** 

1020 Vienna · Leopoldstadt 105,574 21,527 € 5,200 € 3,800 € 12.10 € 10.20 € 

1030 Vienna · Landstrasse 90,712 24,525 € 5,300 € 3,800 € 12.20 € 10.70 € 

1040 Vienna · Wieden 33,319 25,325 € 5,400 € 3,900 € 13.00 € 11.20 € 

1050 Vienna · Margareten 55,640 20,056 € n/a*** 3,700 € 11.80 € 10.60 € 

1060 Vienna · Mariahilf 32,069 23,570 € 5,300 € 3,850 € 13.00 € 11.00 € 

1070 Vienna · Neubau 32,467 24,654 € 5,750 € 4,400 € 13.00 € 11.00 € 

1080 Vienna · Josefstadt 25,662 24,464 € n/a*** 4,500 € 13.00 € 11.30 € 

1090 Vienna · Alsergrund 42,547 24,091 € 5,750 € 4,300 € 13 .10 € 11.20 € 

1100 Vienna · Favoriten 201,882 19,122 € 4,150 € 2,700 € 10.90 € 9.10 € 

1110 Vienna · Simmering 101,420 20,568 € 3,600 € 2,300 € 10.00 € 8.90 € 

1120 Vienna · Meidling 97,624 20,083 € 4,150 € 3,100 € 11.20 € 10.00 € 

1130 Vienna · Hietzing 54,265 29,357 € 5,700 € 4,150 € 12.80 € 11.00 € 

1140 Vienna · Penzing 92,752 23,726 € 4,300 € 3,100 € 11.30 € 10.30 € 

1150 Vienna · Rudolfsheim 79,029 17,893 € 4,150 € 2,850 € 11.20 € 10.10 € 

1160 Vienna · Ottakring 104,627 19,860 € 4,200 € 2,850 € 11.20 € 10.20 € 

1170 Vienna · Hernals 57,546 21,091 € n/a*** 3,000 € 11.30 € 10.00 € 

1180 Vienna · Währing 51,647 25,560 € 5,550 € 3,800 € 12.60 € 10.80 € 

1190 Vienna · Döbling 72,650 26,728 € 6,200 € 4,200 € 13.00 € 10.90 € 

1200 Vienna · Brigittenau 87,239 18,738 € 4,150 € 2,700 € 10.70 € 9.90 € 

1210 Vienna · Floridsdorf 162,779 22,338 € 4,050 € 2,750 € 10.80 € 9.70 € 

1220 Vienna · Donaustadt 187,007 24,427 € 4,200 € 2,700 € 11.20 € 10.00 € 

1230 Vienna · Liesing 103,869 25,209 € 3,750 € 2,850 € 10.50 € 9.80 € 

OTHER 

* Source: Statistics Austria, wage tax statistics for 2016, average annual net income for employees in total, in euros, valid as of December 2017 

** The report assumes residential rents that are not subject to the full scope of the Austrian Tenancy Act. The sample from the First District was too small to deliver any valid information, and has 

been omitted in the rent levels statistic. 

*** The sample observed was too small to deliver reliable and accurate information. 

Source: EHL BUWOG - First Vienna Residential Market Report | 2019 


61


Local private investors 

seize their chance 

Mainly Austrian private investors. After an above-average first half of the year, with a transaction volume 

of more than 230 million euro, the second half of the year lagged a little behind the first. Across the entire year, 

a transaction volume of about 420 million euro was achieved, which - in terms of volume - represents the third 

strongest result in long-term comparison. It is worth noting that in the past year, mainly Austrian private investors 

have emerged as buyers. 

T 

he trend of fewer but larger transactions 

during the first half of the 

year continued in the second half 

of 2018. Overall, there were only 

about half the number of transactions compared 

to 2017, but the volume was significantly larger. 

Simon Kronberger, Associate Director at Christie 

& Co, said, "At a total volume of € 420 million, 

the third-strongest annual result since records 

began has been achieved, following two previous 

record years. Surprisingly, volumes in the second 

half of the year were slightly lower compared to 

those of the first six months.” Previous years 

had seen a large amount of transactions, which 

meant that at the beginning of 2018, especially 

in the cities, comparatively few hotels were on 

the market. However, some transactions, which 

had already begun in 2017, were moved to 2018. 

These included the 400-room Motel One at 

Westbahnhof, which was sold to the Real I.S. as 

part of a mixed-use property. In addition, Christie 

& Co was able to facilitate the sale of the 

Gartenhotel Altmannsdorf and the 7 Days Premium 

Hotel Vienna, carried out on behalf of the SPÖ. 

Reopen as "Max Brown Hotel" 

In Vienna, the Falkensteiner Schottenfeld was 

also sold, which closed its doors in October 

2018 and is scheduled reopen in May 2019 

as the "Max Brown Hotel". Towards the end 

of 2018, a conference hotel with around 200 

rooms in one the most important business 

locations in Vienna was sold to a private investor. 

More than 40 percent of the total volume, 

more than 170 million euro, was spent in the 

capital city of Vienna. In the remaining provinces 

it was comparatively quiet in 2018 - at the 

beginning of the year 50 percent of the shares 

of the 175-room Hotel Park Inn Linz were sold 

by UBM to the co-owner, List Group. There 

were also individual transactions in Salzburg, 

where all the hotels were part of a mixed-use 

property. In addition, the Romantik Hotel 

Post in Villach with 64 rooms was sold in the 

middle of the year and Christie & Co also sold 

Selected Hotel Transactions Austria 2018 

LOCATION HOTEL ROOMS SELLER BUYER 

Heiligenblut Hotel Post 50 Hunguest Hotels Private Investor Hungary 

Heiligenblut Hotel Heiligenblut 113 Hunguest Hotels Private Investor Hungary 

Kitzbühel Grand Tirolia 81 Beneco Privatstiftung Private Investor 

Linz 

park inn Linz 

(50%) 

175 UBM List Group 

Obertauern Hotel Petersbühel 82 Private Valamar 

Wien Falkensteiner Schottenfeld 144 FMTG Confidential 

Wien Hotel zur Staatsoper 22 Private Privat 

Wien Motel One Westbahnhof 400 

Acron Helvetia II 

Immobilien AG 

Real I.S. 

Wien Gartenhotel Altmannsdorf 95 SPÖ/Renner Institut UM Bau 

Wien 7 Days Premium Hotel Vienna 95 SPÖ/Renner Institut Private Investor 

Wien Romantik Hotel Post 64 Private Private Investor 

Bruck an der Mur Hotel Landskron 44 HB1 Hotels Private Investor 

Source: Christie & Co Research 

62 ImmoFokus

the 44-room Hotel Landskron in Bruck an der 

Mur to a private Austrian investor. The year 

saw heightened activity within the leisure hotel 

industry. A the beginning of the year, the 

Grand Tirolia Hotel with its 81 rooms in the 

well-known ski resort of Kitzbühel was sold 

by the Beneco Private Foundation to a private 

Austrian investor. This is now the first hotel of 

the young Hilton brand "Curio Collection" in 

Austria. The two Hunguest Hotels in Heiligenblut 

(Hotel Heiligenblut with 113 rooms and 

Hotel Post with 50 rooms) found a new owner 

in a private investor from Hungary. 

is accounted for by private Austrian buyers. 

In addition, the List Group took over the park 

inn Linz completely, and the Gartenhotel Altmannsdorf 

in the Viennese district of Meidling 

was secured by UM Bau. Across all types of 

investors, 60 percent of the total volume went 

to Austrians, followed by investors from the 

Germany, who are responsible for major takeovers, 

such as the Motel One at the Westbahnhof 

and some leisure hotels as well as buyers such 

as the Croatian Valamar Group and a private 

Hungarian investor. 

n 

Valamar Group acquired 

its first property in Austria 

A further 100 million euro were realised in sales 

of leisure hotels, ranging from Lech and Zürs, 

across Obertauern, Bad Gastein and Sölden, 

to Galtür and Tamsweg. Here, in addition to 

private investors, the Croatian Valamar Group 

acquired its first property in Austria. "The type 

and origin of the investors is particularly interesting 

this year. Although we have facilitated 

some of these transactions, we are surprised 

that private Austrian individuals are making 

up such a significant share of buyers this year, 

with 60 percent of all individual transactions," 

Kronberger notes. When measured in terms of 

transaction volume, almost half of the total of 

420 million euro (a little over 200 million euro) 

"Overall, there 

were only about 

half the number 

of transactions 

compared to 2017, 

but the volume 

was significantly 

larger." 

Simon Kronberger, 

Christie & Co 


63


Logistics real estate 

on the upswing 

Demand continues to be very high. International developers have discovered the domestic logistics market 

for themselves. One of the driving forces is the growing online trade. What’s more, this is also changing the 

logistics real estate market. 

by Ursula Rischanek 

A 

ustria as a logistics location 

had received good grades 

last year: the Alpine republic 

ranked fourth in the World 

Bank's highly regarded international Logistics 

Performance Index (LPI). Since 2007, 

Austria was once again ranked top five in 

2018 and most recently before that, it ranked 

seventh. The reasons for this advance are the 

know-how of the companies, a high level of 

training among the staff and the well-developed 

infrastructure. Arguments that outweigh 

the high labour costs. 

Some newcomers to the market 

It’s no surprise that international developers 

are increasingly interested in the domestic 

"The layout of our 

modern logistics halls 

is as if tailor-made for 

the requirements of 

Post Systemlogistik." 

Christian Vogt, 

DLH Austria 

logistics market. One example is DLH Real 

Estate Austria, a subsidiary of the Zech Group 

from Bremen, which specialises in the development 

and implementation of logistics 

properties and is building the "Industrial 

Campus Vienna East" in Enzersdorf an der 

Fischa in Lower Austria. According to their 

own estimation, it is the largest logistics park 

in Austria. The existing space is to be expanded 

by a further 40,000 square meters by 

autumn. The company claims that the final 

planning for the construction of three additional 

halls with an area of 17,000 square meters 

is currently underway and talks are also 

being held with a company interested in the 

realisation of a further 21,000 square meters 

of logistics space. In addition, they recently 

received an enquiry for a new project with a 

total area of 27,000 square meters. In the end 

the total area of new logistics space should be 

160,000 square meters. 

As a first step, Post Systemlogistik rent a hall 

with 6,300 square meters of storage space at 

the ‘Industrial Campus Vienna East’ and subsequently 

a second, congruent hall directly 

adjacent to it. The Post subsidiary will also 

move into a 300 square meters office space. 

"Post Systemlogistik has been looking for a 

location that combines ideal transport connections 

with modern in-house logistics for 

some time now. The site in Enzersdorf an der 

Fischa is proving to be an excellent property 

that meets our requirements", says Wolfgang 

Einer, Head of Logistics Services at Österreichische 

Post, which the subsidiary "Post 

Systemlogistik" is also part of. "The layout of 

our modern logistics halls is as if tailor-made 

for the requirements of Post Systemlogistik", 

says Christian Vogt, Country Manager DLH 

Austria. 

Speaking in favour of this location is the fact 

that Vienna International Airport is in the 

immediate vicinity, the city centre of Vienna 

and the Post logistics centre in Inzersdorf 

are just 30 minutes away. The new parcel 

centre in Hagenbrunn, which will go into 

operation in mid-2019, can also be reached 

in just 60 minutes. In addition, the location 

to the east of the capital provides ideal 

connections to the neighbouring countries 

Slovakia, the Czech Republic and Hungary. 

Hamburg-based Garbe Industrial Real Estate 

has also entered the Austrian market. The 

ground-breaking ceremony for a 20,500 

square meter logistics center in Steyr (Upper 

Austria) began in December last year and the 

completion is scheduled for August 2019. 

Industrie-Logistik-Linz will then provide 

contract logistics services there on behalf of 

BMW Motorenwerk in Steyr. Garbe Industrial 

is investing around 18 million Euros in the 

project. The building will be equipped with 10 

rear-unloading doors and 6 sectional doors 

for side unloading. In addition, there will 

be about 550 square meters for offices and 

socialising areas. The 42,000 square meter 

site is not only in the immediate vicinity of 

the BMW Group Motorenwerks Steyr, it is 

also close to the production site of the commercial 

vehicle manufacturer MAN Truck 

& Bus. "The Austrian market for logistics 

64 ImmoFokus

eal estate has a relevant size. Companies 

are increasingly discovering that rent can be 

a more attractive option than making their 

own investments. Following acquisitions, we 

now want to have a stronger presence in this 

market with developments,” said Jan Dietrich 

Hempel, CEO of Garbe Logistic. 

Belgian VGP is also showing its presence in 

Austria: at the end of last year, the Group 

acquired a leased warehouse building in 

the Styrian provincial capital of Graz. The 

warehouse, with around 17,000 square meters 

of rentable space, is presently being used 

by the automobile manufacturer of Magna 

Steyr. In addition to the existing property, 

VGP also has the opportunity to develop a 

further 45,000 square meters of rentable 

space for future customers. 

Already in July 2018, the iLogistics Center 

was put into operation to expand the cargopartner 

logistics company's business location 

in Fischamend, also in Lower Austria. With a 

total area of 12,250 square meters, the logistics 

center located in the immediate vicinity 

of Vienna Schwechat Airport, offers 24,500 

pallet storage spaces as well as a small parts 

"The Austrian market 

for logistics real estate 

has a relevant size. 

Companies are increasingly 

discovering 

that rent can be a more 

attractive option than 

making their own 

investments." 

Jan Dietrich Hempel, 

Garbe Logistic 

warehouse with 32,000 containers. Speaking 

of the airport, there is around 40,000 square 

meters of logistics space available in the Airport 

City itself. 

Amazon in Lower Austria 

The distribution center of the Internet giant 

Amazon in Großebersdorf, Lower Austria, 

has also been in operation since October 

2018. In the warehouse of around 9,800 

square meters near the Eibesbrunn motorway 

junction, parcels from other European Amazon 

logistics centers are now being processed 

for delivery to local customers. 

The latter two projects also represent two 

strong trends: on the one hand, the growth 

of online trade leading to increasing demand 

for logistics space and on the other hand, 

in addition to the storage space for pallets, 

there is an increasing demand for small 

parts warehouses as a result of the growing 

practice of shopping from home. This is not 

only where the goods are stored, but also 

where the parcels are packed. 

Hotspots Vienna, Linz, Graz 

In addition, another fact has become very 

clear: the hotspots of the Austrian logistics 

market continue to include Vienna and its 

surroundings as well as Linz and Graz. According 

to data of RE/MAX Commercial, the 

demand of logistics specialists, who want to 

settle in the greater Wiener Neustadt area, 

continues to be very high. The result is rising 

land prices: according to RE/MAX a price 

of 170 and 250 Euros per square meter are 

already being paid around Wiener Neustadt. 

A similarly high demand is driving the prices 

upwards within the range south of Vienna, 

for example in Himberg. The current price 

for a square meter there is approximately 150 

Euros. In the greater Linz area, the land prices 

meant for logistics development - depending 

upon proximity to the main transportation 

routes - run between 100 and 130 Euros and 

rising according to RE/MAX. 

The commercial real estate specialist CBRE 

expects that the already fierce competition 

for land reserves on the outskirts of the city 

will continue to grow since the international 

participants have entered onto the parcel logistics 

market. Based on the good economic 

situation and the increasing on-line trade, the 

"Post Systemlogistik 

has been looking for a 

location that combines 

ideal transport connections 

with modern 

in-house logistics for 

some time now." 

Wolfgang Einer, 

Logistic Services 

Österreichische Post 

high demand by international developers will 

continue. CBRE outlines the trends for 2019 

in the Austrian real estate market, saying that 

the increasing completion volume of thirdparty 

project developments and the growing 

interest in sale and lease-back transactions 

will lead to higher investment activity in the 

domestic industrial and logistics market in 

2019. The present conversion potential of 

existing Class B and Class C properties will 

therefore continue to gain importance in the 

future. 

Trend towards city logistics 

City logistics, better known as stations on the 

way between the large logistics centers on 

the outskirts of the city and the consumers 

is also becoming an increasingly important 

topic. Delivery services, but not only those, 

are renting empty shops in the cities or setting 

up containers from which the goods 

are either distributed further or collected by 

the customers. In Austria, for example, DPD 

operates hubs in such a way in Vienna, Linz 

and Salzburg. But it is not only the delivery 

staff who are interested in inner-city logistics 

space. More and more commercial enterprises, 

in fact not only the huge online retailers 

such as Zalando or Amazon, are stirring up 

the market conditions and setting up their 

own logistics structures. 

n 


65


ImmoVision 2.019 

Highlights and trends. This is what industry professionals have to say about the property trends of 2019. 

Which trends will move Austria in 2019? ImmoFokus asked market participants with a record of sustained 

success about it. 

interviewed by Michael Neubauer 

Roman Ascherov (AIRA Development 

Group), Thomas Belina (Colliers International), 

Michael Ehlmaier (EHL), Heinz 

Fletzberger, Heinz (SÜBA), Gerald Gollenz 

(WKO Steiermark), Manfred Kunisch (TPA), 

Roland Pichler (DWK), Dietmar Reindl (Immofinanz), 

Michael Schmidt (3SI), Gerhard 

Schuster (Aspern) and Georg Spiegelfeld 

(Spiegelfeld Real Estate) 

n 

THE QUESTIONS 

Will the conditions for the real estate industry improve or worsen? Are you beginning the New Year with an 

optimistic or a pessimistic outlook? 

What will be the asset class of the year 2019? 

Have we reached historic highs in real estate prices? Is there still no end to the real estate cycle in sight? 

4 

5 

Which three topics will influence the real estate industry most? 

Your plans and goals for your company in 2019? 

66 ImmoFokus

Due to the high demand for apartments in Vienna, intensive construction activity is necessary. 

However, the apartments must remain financially viable, because the banks require a high equity 

ratio for financing. 

We are optimistic about the new year since we have a number of interesting projects in the pipeline. 

Our innovative architectural style gives us a decisive competitive advantage. 

2 

Investor real estate 

Roman Ascherov, 

AIRA Development 

3 

4 

There is still a great demand, which in turn means that prices are rising. However, you have to be 

careful not to overvalue the properties to avoid the risk of a real estate bubble. 

As property developers, we are called upon to build affordable apartments. In Austria, residential 

property is still affordable by international standards. Due to low interest rates, it is still attractive to 

invest in real estate. 

The digitization or connecting of new building technology systems. The consolidation of economic 

areas is also an issue as well as innovative construction. 

5 

We want to continue building "affordable" housing, which also means remaining close to our customers. 

Personal contact with the customers is very important to us because trust and credibility 

are decisive factors here. Our goal is also a continued healthy growth of our company. 

In principle, I assume that the general conditions will be similar to those of recent years. The 

low interest rate environment and pressure to invest make me feel positive that 2019 will 

also be a good investment year. On the other hand, the amendment to the building regulation 

will continue to generate much discussion in the coming years and planned project 

developments will have to be revised. 

We continue to see strong demand for investments in all asset classes - in contrast to that, supply 

in most asset classes in the core area is very limited. We assume that housing will continue to gain 

a share in the market. There is currently a demand for many residential construction projects in the 

pipeline from institutional investors as well. 

2 

Although we have seen a levelling-out of yield developments in the last 12 to 18 months - 

investors are becoming more cautious, an end to the cycle is not really in sight. The latest 

developments in core office real estate show that it is difficult to forecast top yields or top pric- 

Amendment to the building regulations with the 2/3 regulation regarding subsidised residential 

construction, e-commerce vs. stationary retail, e-commerce and the requirements for 

logistics properties (City Logistics, last-mile-delivery). 

3 

4 

Thomas Belina, 

Colliers International 

We are currently working on numerous exciting projects in various areas - we are therefore 

very confident that the current year will also be very positive for Colliers International in Austria. 

5 


67


According to the latest statements by the ECB, interest rates will remain at their current level for 

the foreseeable future, so we are very optimistic as far as the price trends and stable value of real 

estate are concerned. Furthermore, the rental markets - both in the commercial and the residential 

sector - are also performing very well, resulting from Austria's good overall economic development. 

On the other hand, we also see some challenges for the real estate sector with regard to the land 

property situation, the development of construction prices and the occasional lengthy approval procedures. 

On the whole, however, we are very confident about the development of the industry. 

2 

The residential asset class will continue to be the fastest-growing sector in the real estate industry 

this year, driven by demographic developments and the progress of urbanization. 


EHL 

3 

4 

From our point of view, there is still scope, even if limited, for further price dynamics. Over the medium 

term, we expect prices to move sideways. As long as other asset classes, in particular government 

bonds, perform comparatively poorly, we do not expect an abrupt end to the real estate cycle. 

Land prices, construction costs and of course interest rates, accompanied by economic growth, 

demographic trends and legal and political stability, form the foundation for the development and 

stability of the real estate industry. 

5 

In 2019 we will continue to do everything in our power to achieve our ultimate goal of customer satisfaction. 

In addition - as in previous years - we will prepare our company for the current challenges 

posed by digitization and adjust it in such a way that our customers may continue to expect the 

best range of services from us in the future. 

68 ImmoFokus

www.immofokus.at 

The Magazine for Innovation, 

Benchmarks, Trends in the World of Real Estate. 


69


In recent years, the overall conditions for the Austrian real estate market have been excellent for 

investors. Low interest rates and high demand led to above-average returns in many asset classes. 

It is not clear how sensitive the real estate market will be to rising interest rates, especially with the 

currently high land and construction costs. The economic parameters will remain sound, even if 

interest rates see a moderate rise in the second half of the year, as I believe they will. I expect this 

even with a weakening economy. Topics like Brexit or trade conflicts are less likely to affect the local 

real estate market than other markets or industries. As far as the legal framework is concerned, the 

Viennese real estate market, for example, is characterized by new building regulations. It is completely 

unclear, in my estimation, how the market and price development will react in the medium 

term, particularly to the new category "subsidized housing". I believe it is equally uncertain if the 

desired effect of affordable housing will arrive at the estimated scale and how the city of Vienna will 

cope with the resulting financial requirements. 

Incidentally, we have been waiting for a reform of the tenancy law for years. The process was to be 

kickstarted by a tenancy convention, which was announced quite a while ago now. The urgent need 

to simplify tenancy legislation is illustrated by recent Supreme Court rulings on the surcharge situation 

and the resulting uncertainty in the housing market. A comprehensive reform of tax legislation 

has been announced for 2020. Whether this will actually materialise and which impact it will have 

on the real estate sector remains to be seen. In any case, I have not completely lost my faith in an 

improvement of the legal framework for the real estate market – yet. 

2 

I don't think that there can be this "one" asset class while the old classics continue to be on the radar 

of investors. Yields in the office, retail or hospitality sectors are in decline, but still have an appeal 

with a good micro-location and implementation. I am expecting a short-term increase in demand 

for logistical properties. 

Foreign investors in particular are introducing new asset classes such as student halls of residence, 

serviced apartments or data centres to the Austrian market. Since some of these projects are 

already under development, these asset classes will continue to establish and grow. 

The housing market and the demand for affordable housing will, however, remain the firm focus of 

public interest and political discussion. 

Manfred Kunisch, 

TPA 

3 

Demand in the housing market will continue to exceed the new supply of space, which, like many of 

the analysts, leads me to expect a moderate increase in prices for the coming year. In the medium 

term I am curious as to how the construction costs will develop. With the currently high costs, it is 

becoming apparent with some of our real estate developers that housing projects are no longer 

started at any price. 

The question of affordable housing will continue to adopt an ever dominant role in the future. This 

is evident in issues such as the surprisingly high proportion of mandatory dedication of subsidized 

housing in the new Viennese Building Code. 

With regard to commercial real estate, excess supply is unlikely for the Viennese market, although 

demand may decline in the case of an economic downturn. In general, constant prices are probably 

the more likely outcome. 

4 

It would be all too easy to call on “modern” topics, like digitization or data protection. If, however, the 

question is one of the topics with the strongest influence, then for me this is still the future development 

of interest rates and market liquidity in combination with high construction costs and land 

values. 

5 

Having achieved of one of our major long-term goals - a TPA location in Linz and the associated 

expansion of our business activities in the west - we are currently very happy. The expansion in 

Central and Southeastern Europe, with a new location in Montenegro, brings us another step closer 

to our corporate goal of sustained growth for and with our customers. This year, we are also celebrating 

our 40th anniversary - a small, specialized law firm has become an internationally operating, 

successful corporate group. We want to continue this 

70 ImmoFokus

Basically I am entering the new year very positively, because the demand for living spaces has 

remained unchanged and the marketing of our projects is going very well. Of course, the last few 

months have seen the emergence of difficult conditions (e.g. land and construction costs). We have 

already adjusted our business for these issues. We are eagerly and confidently awaiting the political 

intervention (e.g. the Vienna building regulations). 

2 

Housing will, of course, continue to be the asset class of the year. But specialized properties will also 

establish themselves more and more. 

Roland Pichler, 

DWK 

3 

4 

The prices for condominiums and rental apartments have been rising for some time, but recently 

at a very moderate level. This is more like stagnation or value adjustment. In my opinion, this will 

also soon be the case in the investor market. I don't see a price decline or downward trend at the 

moment. Nevertheless, we are keeping a close eye on the market and its saturation since the situation 

can change quickly if the supply is too high, especially in moderate locations. 

Lack of resources, digitalization, financial requirements. 

5 

In the current year we want to complete around 400 apartments and hand them over to our customers. 

Then we intend to build a further 400 apartments. Since we are pursuing a moderate 

growth course, we want to increase our acquisition performance and fully exploit our advantages 

of the enormous financial strength of the Group. The expansion of our activities into other provinces 

is also connected with this. 

IMMOFINANZ is optimistic about the new year. In January we received an investment grade rating, 

making us the first Austrian property company to issue a rated bond with a volume of 500 million 

Euros. This is an important seal of quality for our company. Our properties are very clearly positioned 

in our three brands myhive, STOP SHOP and VIVO! and we have plans for further growth. 

Retail parks. A few years ago, this asset class was not particularly interesting for many investors. We 

have entered this segment at exactly the right time and with our 80 locations in nine countries, we 

are already the leading player in this segment. The concept is successful with its decentralization 

and an attractive range for price-conscious convenience shoppers. Online retailing is also not an 

issue in the low-cost product classes. Further growth is planned. 

2 

That would be desirable, but a cycle also comes to an end once in a while. We consider this real 

estate cycle to be at an advanced stage, especially compared to the German market. It is important 

to us that we are very well equipped for any market environment: Over the past few years, we have 

invested in the quality of our product range, significantly increased the occupancy rate and created 

a very comfortable liquidity situation. This puts us in a good position to successfully exploit opportunities 

in a changing market environment. 

More flexibility in office environments, digitization and finding new commercially-viable projects. 

3 

4 

Dietmar Reindl, 

Immofinanz 

In 2019, we will focus even more intensively on the wishes and needs of our customers. This pays 

off with a high occupancy rate and desirable results. In addition, it provides the basis for sustainable 

growth with new projects in our three brands. 

5 


71


We are very optimistic about the new year and have already concluded successful transactions, 

both in terms of acquisitions and sales. Although the environment is currently very mixed, especially 

in the rental housing sector - see the new area surcharge map, the discussion that limited rental 

agreements might cease, etc. - we believe in the apartment building as an asset class and will continue 

to expand in this area. 

2 

Residential real estate by a long stretch – it is also the safest form of investment for us and will, in 

the long term, always remain the safest asset class, even though we are faced with lower yields 

than we might achieve with, for example, office real estate. But residential properties are the safer 

bet in the long run. 

Michael Schmidt, 

3SI 

3 

4 

No, an end is not in sight, because in the urban area, where mot of expansion is happening, there 

isn't much scope for new housing. But we do think that the growth of the last three years is now 

beginning to slow a bit. 

Population growth, rising interest rates and, naturally, political guidelines and laws. 

5 

Our aim is to break the 100 million investment limit in acquisitions for the first time in 2019. 

Conversely, this means that we are currently in search of apartment buildings and properties in 

Vienna even more than usual! Therefore we extend an invitation to offer us any 

As a boundless optimist, I am convinced that the conditions for the real estate industry will improve 

- perhaps things will change in the New Year, but that will do us good, make us more creative and 

dynamic. 

Retail parks. A few years ago, this asset class was not particularly interesting for many investors. We 

have entered this segment at exactly the right time and with our 80 locations in nine countries, we 

are already the leading player in this segment. The concept is successful with its decentralization 

and an attractive range for price-conscious convenience shoppers. Online retailing is also not an 

issue in the low-cost product classes. Further growth is planned. 

2 

That would be desirable, but a cycle also comes to an end once in a while. We consider this real 

estate cycle to be at an advanced stage, especially compared to the German market. It is important 

to us that we are very well equipped for any market environment: Over the past few years, we have 

invested in the quality of our product range, significantly increased the occupancy rate and created 

a very comfortable liquidity situation. This puts us in a good position to successfully exploit opportunities 

in a changing market environment. 

More flexibility in office environments, digitization and finding new commercially-viable projects. 

3 

4 

Georg Spiegelfeld, 

Spiegelfeld Real Estate 

In 2019, we will focus even more intensively on the wishes and needs of our customers. This pays 

off with a high occupancy rate and desirable results. In addition, it provides the basis for sustainable 

growth with new projects in our three brands. 

5 

72 ImmoFokus

I assume that the general conditions will remain the same as in 2018. 

That is why there is optimism regarding the continuous level of interest rates and demand 

for residential real estate from owner-occupiers as well as private and institutional investors. 

Unfortunately, I do not currently see any reduction in construction and property costs. 

2 

Residential property was, is and will remain the top asset class of the year! 

Heinz Fletzberger, 

SÜBA 

3 

4 

We have been speculating about this for some time now and yet the prices are still rising. As long 

as the interest rates do not increase, prices will continue to rise, but only very slowly and in smaller 

steps. Compared with the rest of Europe, however, this is not surprising, as we are still in the middle 

rage there. 

The further development of construction and property costs and possible political influences (e.g. 

the issue of property reclassifications by the Viennese city government). 

5 

SÜBA currently has around 300,000 m² of usable space or 5,000 apartments with a total volume 

of over 1 billion under construction or development and would like to continue growing steadily in 

order to expand its share of the privately-financed housing market in Austria. 

2019 will certainly be an exciting year in terms of how the politicians tackle those sensitive issues. 

The government's program includes tax incentives, the implementation of which is more than 

necessary and highly urgent. A new tenancy law would have been more important yesterday than 

tomorrow. All these changes would contribute to boosting the economy and construction of the 

urgently needed housing in the cities. Rent ceilings are absolutely the wrong way to go. I am basically 

an optimistic person, always trying to see the good even in politicians and therefore expect a 

positive development again in 2019. As always, the real estate industry will accept the challenges 

and master them with flying colors. 

Residential construction will obviously remain the number 1 asset class, even if other projects such 

as senior citizens' residences will become relevant again. 

2 

In the metropolitan centers there will always be projects that are upwards orientated in terms of 

price, but in principle you can already see that across the entire land a level has been reached that is 

also limited. I don't see any more big upwards leaps. 

3 

Digitalization is certainly one of the biggest challenges. For property developers the laws and standards 

must finally be harmonized and for brokers the marketplace initiated by the trade association 

will be the major topic in the real estate industry, I am sure of that. 

4 

Gerald Gollenz, 

Austrian Economic Chambers 

The first half of the year will be dedicated to the organization of the Bundestag 2019, which will 

take place in Graz from 13 to 14 June. We are already inviting the real estate brokers of the entire 

country to visit us, because already now I can promise you great locations and a great program. The 

preparations for this are in full swing. The real estate fair "Lebensraum 2019" in March will again be 

a highlight of the Styrian real estate market. The training and further education as well as our networking 

events continue to be at the top of our agenda and the "Real Estate Brokers in the Public 

Sector" project, which has been running since 2012, will also be stepped up again in 2019. 

5 


73


As a development company for aspern Seestadt Vienna, we are entering the year 2019 with great 

optimism. This year, various very attractive office offers will be launched in our Seeparkquartier 

business hotspot - while Vienna as a whole will record one of the lowest completion rates for office 

properties in recent years. In this area as well we have very good starting conditions for the new 

quarter, the quality of which is also reflected in the new usage mix. 

2 

In the Seeparkquartier in aspern Seestadt, this will be the privately-financed rental and owned 

apartments that are being built in a pedestrian zone in a prime location with underground connections 

and access to the lake. These properties benefit not only from the top location, but also from 

the mix of high-quality office spaces, shops on the ground floors, restaurants and leisure facilities. 

3 

That depends on the asset class. In the case of purely residential land, it is highly probable that 

prices will no longer rise appreciably. 

Gerhard Schuster, 

aspern 

4 

First of all, it is definitely digitization and here I can see some key aspects that we are working 

on intensively in the Seestadt area. With the DBS Club we are also dealing with "Digital Building 

Solutions" that take the entire cycle from financing to planning, construction and operation into 

account. Furthermore, smart home solutions are increasingly in demand from users and make a 

lot of sense from our urban development perspective – at best, they not only provide comfort for 

the individual but also contribute to resource conservation and our sustainability goals. This is a key 

research aspect of Aspern Smart City Research (ASCR), for example. Projects that are working on 

supplying energy at the local neighborhood level are also along the same line. Locally generated 

and used energy in a small-scale association is an incredibly exciting topic in new development 

areas. Secondly, especially in Vienna the Smart City will continue to carry a lot of weight. We in the 

Seestadt see ourselves as the Urban Lab of the Smart City Vienna and are working on the topic 

far beyond its digital aspects. This begins with mobility and open space planning that contribute 

to "urban resilience" and extends to our innovation of the "managed shopping street" as a control 

element for all local supply within easy reach in a city. Last but not least, it is and remains the good 

usage mix that enhances real estate and urban districts. This makes aspern Seestadt extremely 

successful even by international standards. 

5 

In 2019 we will get the final development phase of the Seeparkquartier off the ground. A number 

of the 14 projects will be completed this year and by 2020 the quarter should be largely completed 

so that by 2021 we can finish the surfaces, plant the green areas and set up the outside furnishings. 

Just as important for us is the beginning of the building construction in the Quartier Am Seebogen, 

north of the lake. This will again be very diverse, industry will play a major role, but also new social 

infrastructure with kindergartens, the second school campus of the Seestadt and exciting cultural 

offerings. We must therefore prepare the infrastructure in spring 2019, for which the planning 

work has been in full swing since last autumn. Starting in 2019, the Seestadt will also noticeably 

position itself as a hub for digitization processes by linking the many players and projects even 

more closely than before. These include Pilotfabrik 4.0 at the TU Vienna, the Austrian Center for 

Digital Production (CDP) and shortly the Manufacturing Innovation Hub of the European Institute 

of Innovation and Technology (EIT) at the Technologiezentrum. And we will be even more active in 

our efforts to promote further flagship projects in the area of Smart City Solutions - the framework 

conditions could not be better than in our case. 

74 ImmoFokus

Your office 

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event, showroom & gastronomy space. Completion in spring 

2020. Starting from 180 sqm. Rent now! 

+43 1 7007-7007 

www.airport-city.at 

VISIT US AT 

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MARCH 12-15, 2019, 

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