MIPIM 2023 Digital Edition

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Investing in Austria Influence of interest rate turnaround on the investment market Increasing investor enthusiasm. After a solid performance in the previous year despite many challenges, experts expect more momentum on the Austrian real estate investment market in 2023. T he Austrian real estate investment market has had busier times in the past compared to 2022. Given the turnaround in interest rates - not to mention inflation, high commodity prices, economic weakness, supply chain problems and war in Ukraine - the transaction volume of just over four billion Euros, which is around ten percent down from the previous year but still in line with the ten-year average, it is still pretty respectable particularly because some forecasts had assumed a significantly worse result as a whole. It is undoubtedly a good sign that the market has gained further momentum in the fourth quarter. And as the experts at EHL Investment report, there is currently significantly more interest in investments than in the fall of 2022. However, the price expectations of potential buyers and sellers are still too far apart for deals to be concluded. „Experience shows that it takes around half a year for a new market equilibrium to form, so we expect a significant increase in transaction activity again from the middle of the year,“ said Franz Pöltl, managing partner of EHL Investment Consulting. Repricing continues in the first half of the year CBRE also expects the ongoing repricing process on the Austrian real estate market to continue, at least in the first half of the year. According to Lukas Schwarz, Head of Investment Properties, review processes and acquisitions are currently taking longer, and a clear focus by investors on good and convincing assets can also be discerned. „In addition to location and tenant structure, for example, ESG criteria play a particularly significant role,“ he added. Furthermore, „Properties that do not meet these requirements are not shortlisted by investors or are only sold at large discounts.“ „Properties in weaker locations, with difficult leasing situations or a greater need for action concerning ESG goals, will trade at lower prices,“ Pöltl also says. In the case of top properties, where indexation of rents can also be enforced, the inflation protection that real estate is known to offer will once again attract greater attention, he adds. „For these properties, the price adjustment will also be limited,“ the EHL investment head maintains. „Whether there will be a revival in transaction activity from the third quarter onwards depends, particularly in the residential segment, on whether prices can adjust to the changed interest rate level,“ believes Christoph Lukaschek, Head of Investment at Otto Immobilien. The emphasis here is on residential real estate. With a share of more than 30 percent of the transaction volume, this asset class was number one in 2022, as in previous years. According to Lukaschek, this was primarily due to several large-volume sales. Office (20 percent), logistics (15 percent) and retail (10 percent) came in second. Further price adjustments Where are prices headed? The restrictive lending regulations by banks, combined with rising SWAP rates in all asset classes, negatively impact price development, according to EHL. This is reflected not only in higher interest rates but also in higher capital requirements and risk margins. In many cases, this leads to price adjustments. According to the experts at CBRE, the fact that prime yields in Austria were corrected upward by an average of 70 basis points in 2022 - overall, office and residential buildings were affected the most with an adjustment of 75 basis points - can even be considered moderate compared with other Western European countries. Further corrections are expected for 2023, although they should be less drastic. At any rate, the prime yield in the residential segment is currently around 3.50 percent, while it is just under four percent in the office segment. Significantly more is to be earned with top logistics real estate, namely 4.5 percent. This is only topped by shopping centers (5.25 percent) and retail parks with five percent. Austrians dominate Last year, Austrians were the most active players on the investment market, accounting for almost 70 percent of the transaction volume. Germans accounted for 26 percent, followed by international investors with five percent. Overall, it was primarily special funds, project 42 ImmoFokus
developers and family offices that set the tone. As Pöltl confirms, institutional capital, which has been very active in Austria in recent years, has found its way into other markets and asset classes on a large scale, such as fixed-interest securities denominated in U.S. dollars and government bonds. In any case, the share of international investors is expected to increase further. EHL expects to see a number of joint ventures between local developers and institutional, well-capitalized investors, mainly from the UK and the US, in project development and revitalization of existing properties in the coming months. These investors are increasingly looking for suitable investment opportunities. They will be attracted not only by the higher yields but the returns on their investment will also play a role. The fact that international investors are partly filling the gap left by institutional investors can certainly speak slightly positively for 2023. „Due to the currently robust demand on the tenant markets and the planned easing of real estate financing, we are cautiously optimistic about 2023,“ says Markus Arnold, owner, and CEO of Arnold Immobilien. He points to the surprisingly good fourth quarter of 2022 as „possibly a good indication for 2023.“ „We will only be able to make more precise assessments after MIPIM in Cannes,“ Arnold concludes. MIPIM | 2023 43
Page 1: MIPIM 2023: Special digital edition
Page 5 and 6: Worte füllen keine Hilfspakete. Ih
Page 7 and 8: Investing in Austria Join us at MIP
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Page 11 and 12: Staying power in times of uncertain
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Page 17 and 18: WORDRAP MIT MARKUS MENDEL Are you a
Page 19 and 20: German-speaking countries. And if a
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Page 23 and 24: With „6B47 Stadtquartiere I“, 6
Page 25 and 26: Is everything going according to pl
Page 27 and 28: That is absolutely justified. But w
Page 29 and 30: „Certificates assure that sustain
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Page 33 and 34: placed by another instrument or dev
Page 35 and 36: „Financing might get even cheaper
Page 37 and 38: „For sustainability reporting, yo
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Page 45 and 46: Selected investment transactions 20
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Page 49 and 50: Rentals 2022 (selected examples) Pr
Page 51 and 52: Logistics Industrial Market Vienna:
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Page 71 and 72: 1 At present we are optimistic abou
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Page 75 and 76: Bringen Sie Work und Life nachhalti
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Page 79 and 80: 1 We have all become more cautious
Page 81 and 82: SIEMENSSTRASSE 89 1210 WIEN WWW.TWE
Page 83 and 84: 1 Only optimists succeed. As a real
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Page 87 and 88: Wir leben Immobilien. Wir leben Kno
Page 89 and 90: jpi.at UNSER VERTRAUEN GIBT ES NUR

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