We stand for
Office
Office Market Report
Vienna | Spring 2017
We stand for
real estate.
EHL REAL ESTATE GROUP
© ZOOM VP
2
QBC, building parts 1 and 2 | 1100 Vienna
Preface
The Vienna office market is currently in the midst of an unmistakable
trend reversal: the production of new office space will double in 2017,
and a further substantial increase is expected in 2018. Moreover, 2016
marked the highest take-up since 2008. This development opens a range
of excellent opportunities for all market participants: the strong demand
for office space creates optimal conditions for the realisation of longprepared development projects and prospective tenants can choose
from a large range of new office properties – that will significantly
expand the supply of attractive investment projects.
Michael Ehlmaier FRICS
Managing Partner
At EHL, we will be pleased to help you make the perfect use of these
opportunities based on the extensive know-how of our office and investment experts.
Stefan Wernhart MRICS
Head of Commercial Properties
[email protected]
Thomas Schanda, MA
Head of Market Research
[email protected]
EHL - the office specialist
EHL market reports
For many years EHL Real Estate Group has
been one of the leading providers of property
services in Austria. EHL offers a complete
range of real estate services throughout the
entire property life-cycle, as well as a successful international network.
EHL market reports are updated regularly and
offer a comprehensive overview of the most
important developments, facts and figures in
the property markets in Vienna.
EHL is the exclusive Austrian partner of international property group Savills, providing its customers with property services across the globe.
With the EHL City map you will find the most
important office, retail and logistics properties
at a glance, as well as detailed representations of the most important office locations in
­Vienna.
EHL City Map
3
OVERVIEW OFFICE MARKET VIENNA
Office market Vienna 2010 – 2017
2010
2014
280,000
300,000
2015
160,000
2013
200,000
2012
220,000
260,000
210,000
2011
8%
60,000
75 0
130,000
Market Research | Q1 2017
Vacancy Rate (%)
120,000
7575,000 sqm
170,000
Source
* Forecast
180,000
Take-up in sqm
180,000
1150,000 sqm
220,000
Deliveries in sqm
185,000
1225,000 sqm
270,000
1300,000 sqm
2016
2017*
Executive Summary
Steady growth in the production of new space
The market supply is increasing significantly:
Deliveries amounted to 160,000 sqm in 2017 and
will reach 330,000 sqm in 2018. The attractive
newly developed office properties include Denk
Drei, ORBI Tower, QBC building parts 3+4, Austria
Campus and THE ICON VIENNA.
Take-up remains at a very high level
The level of completions has also been accompanied by a parallel rise in take-up: Forecasts point
to a letting volume of approx. 280,000 sqm in
Vienna in 2017 due to the continued strong demand, following the 300,000 sqm during 2016.
Take-up | Deliveries 2017
Increase in average rents
The rising share of deals in high-quality new
construction projects has led to an increase
in average rents from EUR 13.75/sqm to
EUR 14.25/sqm. Prime rents remain stable at
EUR 26.00/sqm.
Continued very low yields on office properties
The new development projects will clearly
accelerate the momentum on the office property
investment market. Yields remain under pressure, and currently equal 4 percent for prime
properties.
Rents | First occupancy** (in EUR / sqm/m.)
Deliveries
160,000 sqm
Prime locations
Take-up *
280,000 sqm
Quality locations
13.5 –16.5
Standard locations
10.0 –13.5
Market indicators
Deliveries
Take-up
Vacancy rate
Prime yield
strongly increasing
Prime rents
Austria 6.2 %
Unemployment rate (Eurostat)
slightly decreasing
Rental rates
Average rents
Economic Data Austria 2017*
stable
decreasing
slightly increasing
stable
16.5 – 26.0
EU (28) 8.3 %
Eurozone (19) 9.7 %
Nom. GDP EUR bn.
360.3
Economic growth
1.50 %
Inflation
1.70 %
State budget deficit
-1.50 %
Vienna Office Market H1 2017
Total Office Space in sqm***
10,935,000
Vacancy rate
5.8 %
Prime rent (in EUR / sqm/m.)
26.0
* Forecast
** EHL-average rent levels of 100 newly built or refurbished office
buildings at various locations
*** All figures in the report refer to total office space consisting of
modern office properties and office space in older buildings.
7%
6%
5%
4%
TAKE-UP | DELIVERIES
© IC Projektentwicklung | OLN
4
Viertel Zwei, Denk Drei | 1020 Vienna
Record levels for take-up and deliveries
In 2016 the Vienna office market was considerably more active than in the past due to the
growing supply of modern office space. This
greater interest was reflected, among others,
in substantial pre-letting for new construction projects. The production of new space
will increase to 160,000 sqm in 2017 and
more than double to approx. 330,000 sqm in
2018. Take-up has risen sharply and totalled
300,000 sqm in 2016. The well-filled pipeline
and strong demand lead to expectations of
similarly good performance with take-up of
approx. 280,000 sqm in 2017. Consequently,
the vacancy rate is projected to drop to 5.4
percent by mid-2017. Demand is also strong
in the established cluster regions and urban
development hubs, e.g. surrounding Vienna’s
Hauptbahnhof with the QBC and THE ICON
VIENNA as well as the Messe Wien/Prater
area, e.g. with the Denk Drei and messecarree
Wien. Most of the rentals are located in newly
constructed, consistently high-priced projects,
which has also led to a slight increase in average rents to EUR 14.25/sqm.
Completions 2017 | 2018
Property
2017
Size
Location
SQUARE PLUS 1
28,000 sqm
1190, Leopold-Ungar-Platz 2 und 3
Austrian Post Headquarters **
25,000 sqm
1030, Rochusmarkt
Denk Drei, Viertel Zwei
23,000 sqm
1020, Vorgartenstraße 2
ORBI Tower, CB21, TownTown
21,600 sqm
1030, Thomas-Klestil-Platz 13
QBC 4, Quartier Belvedere Central
17,000 sqm
1100, Karl-Popper-Straße 4
Euro Plaza, Building Phase 6
12,700 sqm
1120, Kranichberggasse 2
Campus West *
11,000 sqm
1220, Seestadt Aspern
Futurebase
11,000 sqm
1210, Giefinggasse 4
QBC 3, Quartier Belvedere Central
7,800 sqm
1100, Gertrude-Fröhlich-Sandner-Straße 3
messecarree Wien
4,600 sqm
1020, Ausstellungsstraße 50
200,000 sqm
1020, Walcherstraße 1
2018
Austria Campus
THE ICON VIENNA
74,200 sqm
1100, Wiedner Gürtel 11
ViE/Lände 3
13,800 sqm
1030, Erdberger Lände 26A
Inno Plaza
11,000 sqm
1120, Pottendorfer Straße 23-25
SILO Plus
11,000 sqm
1230, Lemböckgasse 57-59
SQUARE PLUS 2
8,000 sqm
1190, Leopold-Ungar-Platz 2 und 3
HoHo
4,500 sqm
1220, Seestadt Aspern
HBF 1
4,200 sqm
1100, Gertrude-Fröhlich-Sandner-Straße
* fully let | ** owner-occupied
Source
Market Research | Q1 2017
The table only includes those properties
for which construction has already begun.
Numerous projects for which construction
will only commence when pre-let to a suitable
degree are not included.
5
development of rents | largest lettings | prime rents | vacancy rates
Development of rents 2010 – 2017
30
Prime rents
25
Prime locations
20
15
Quality locations
Values from-to in EUR/sqm/m.
* Forecast
Source
Standard locations
10
Market Research | Q1 2017
5
2010
2011
2012
2013
2014
2015
2016
2017*
Selected Lettings 2016
Tenant
Size
Property
BAWAG AG
28,000 sqm
1100, THE ICON VIENNA
PwC Österreich GmbH
15,000 sqm
1220, DC Tower
ibis acam Bildungs GmbH
12,000 sqm
1110, Office 11
Municipal Department of the City of Vienna
11,000 sqm
1220, Campus West
BDO Austria GmbH
10,500 sqm
1100, QBC 4
Bundesimmobiliengesellschaft m.b.H.
8,500 sqm
1020, Denk Drei
Sparkassen Versicherung AG
6,800 sqm
1020, faBricks
Coca-Cola HBC Austria GmbH
6,500 sqm
1100, Business Park Vienna
Vienna Municipal Administration
5,500 sqm
1110, OCG Office Campus Gasometer
FCP Fritsch-Chiari & Partner ZT GmbH
4,300 sqm
1030, City Point
Austrian Federal Office for Immigration and Asylum
3,500 sqm
1030, MGC Office Park
WKO Inhouse
3,500 sqm
1100, QBC 4
Sigmund Freud University
2,900 sqm
1030, Kelsenstraße 2
S&T AG
2,800 sqm
1110, Brehmstraße 10+14
SIKA Österreich GmbH
1,400 sqm
Source
1200, BIG BIZ
EHL Real Estate Group provides consulting
services to tenants and/or lessors
Market Resarch | Q1 2017
Prime rents (in EUR/sqm/m.)
Vacancy rates (in %)
17.0 Warsaw
112.0 London (West End)
63.5 Paris
16.5 Prague
41.0 Milan
13.8 Budapest
39.0 Frankfurt
12.9 Amsterdam
35.0 Munich
12.0 Bratislava
31.0 Amsterdam
11.0 Bucharest
27.0 Madrid
11.0 Milan
26.9 Berlin
26.0 Vienna
22.0 Warsaw
22.0 Budapest
19.0 Prague
Source
Market Research | Q1 2017
18.0 Bucharest
15.0 Bratislava
10.5 Madrid
8.8 Frankfurt
5.8 Vienna
4.1 Munich
3.8 Paris
3.3 London (West End)
2.9 Berlin
6
Vienna office regions
© moodley brand identity
Inner city and directly adjacent locations
Top properties
1010, Rathausstraße 1*
1010, Goldenes Quartier Office
1010, Fleischmarkt 1
Rents
EUR 15.0 -26.0 1010, Kohlmarkt 8
Rents tendency
1010, Palais Herberstein
Demand
1010, Schwarzenbergplatz 3
Supply
1090, Wasagasse 2
© Amundi
Northern Region
Top properties
1190, Skyline
1190, Kay 29
u5
1190, Square Plus*
Rents
Rents tendency
EUR 11.0 -15.5 1190, space2move
1200, Rivergate
Demand
1200, Millennium Tower
Supply
1200, Optimum
1210, Florido Tower
© barus graphicdesign
Western Region
u3
A1
u4
Top properties
1120, Forum Schönbrunn
1120, Arcade Meidling
1140, Bergmillergasse 5
Rents
EUR 10.0 -14.5 1140, Scheringgasse 2
Rents tendency
A23
Demand
u6
Supply
© VDX.at
Wienerberg | Southern Region
Top properties
1100, Business Park Vienna
1100, myhive Twin Towers
1120, Euro Plaza
Rents
Rents tendency
Demand
Supply
EUR 11.5 -18.0 1120, Arcade Meidling
A21
A2
7
vienna office regions
A22
© DC Towers | michael NagL
Vienna DC | Surrounding Area
u1
Top properties
1220, Ares Tower
1220, DC Tower
1220, Andromeda Tower
EUR 12.5 -22.0 1220, Tech Gate Vienna
Rents
1220, IZD Tower
Rents tendency
Demand
S2
Supply
© ZOOM VP
Lassallestraße | Messe | Prater
u2
Rents
Rents tendency
Top properties
1020, Green Worx
1020, Austria Campus*
1020, messecarree Wien*
1020, Denk Drei*, Viertel Zwei
EUR 12.0 -17.0 1020, Galaxy 21
1020, e-zone
Demand
Supply
© cetus Baudevelopment
Seestadt Aspern A4
Top properties
1220, HoHo Wien*
1220, Aspern IQ
1220, Campus West
Rents
EUR 11.5 -16.0
Rents tendency
Demand
Supply
Neu Marx | Erdberg © IWS TownTown AG
S1
© SIGNA
Hauptbahnhof | Quartier Belvedere
Rents
Rents tendency
Demand
Supply
Top properties
1030, Marxbox
1030, Doppio Offices
1030, Solaris
EUR 11.5 -18.5 1030, ORBI Tower*
Top properties
Rents
1100, QBC*
Rents tendency
1030, MGC Office Park
1100, THE ICON VIENNA*
Demand
1030, Media Quarter Marx
1100, Laxenburger Straße 36
Supply
EUR 15.0 -22.0 1100, HBF 1*
1100, Favio
* Project
new world of work
© SIGNA
8
Austria Campus | 1020 Vienna
New office concepts for the
modern working environment
The examples set by international IT corporations like Google and Microsoft are gradually
becoming an integral part of the Austrian office
landscape. Increasingly mobile work models are
making permanent desks in assigned offices
more and more obsolete, and employers are turning to open-plan offices, desk-sharing and trolley
solutions as well as multifunctional communication zones and lounge areas. These new ways of
using office space will strengthen project and
team activities and also support mobile work
models. Improving spatial efficiency remains one
of the key goals, but the total amount of leased
area in today’s working world will not necessarily
reduce. In fact, the utilisation structure is shifting from traditional individualised workplaces to
shared-use, frequently changeable multifunctional areas. The work-life balance is becoming
an increasingly important factor for companies
in selecting their locations. Short routes and
optimal accessibility via public transportation as
well as car and bike sharing options play a greater
role than ever before. Developers must therefore
address these trends and create multipurpose
office space in well-developed locations.
Take-up by location
Take-up by sector
2%
1%
25%
23%
3%
5%
5%
6%
22%
9%
21%
6%
8%
10%
11%
12%
15%
17%
Central Station | Quartier Belvedere
Public sector
Neu Marx | Erdberg
Banking and insurance
Wienerberg | Southern Region
Law firms and consultants
Inner city and directly adjacent locations
Educational and training institutions
Northern Region
Construction, Real Estate
Vienna DC
IT | High-Tech
Other
Food industry
Lassallestraße | Messe | Prater
Pharma and medical technology
Western Region
Serviced Office
Source
Market Research | Q1 2017
9
Investment market
3.00
3.25
Paris
3.25
London (West End)
Madrid
3.30
Munich
3.50
3.90
Berlin
4.00
Frankfurt
Milan
Vienna
4.00
4.20
4.85
Amsterdam
Prague
Warsaw
Bratislava
Market Research | Q1 2017
Budapest
Source
Athens
Prime yields in %
Bucharest
5.25
6.50
6.75
7.50
7.50
Prime office yields across Europe
Investment market
New office properties revive
the investment market
Office properties were again the strongest
segment of the Austrian real estate investment
market in 2016 with 36 percent of the commercial transaction volume. The total turnover
reached EUR 2.7 billion but – with a decline of
EUR 800 million – the originally projected yearon-year growth failed to materialise. This situation resulted from delays in closing several
major transactions, which are now expected to
appear in 2017 statistics. Moreover, the supply
in the top segment was too low to completely
satisfy the strong demand.
The shortage of office and retail properties led
to an increase in the importance of the hotel
sector, which continues to benefit from the
strong growth in tourism. Hotels formed the
second strongest segment in 2016 with 29
per cent of the total transaction volume. At
the same time, alternative investments such
as student housing, retirement homes and
logistics properties moved more into the focus
of investors.
The largest office transactions in 2016 included
the sale of the IZD Towers to CBRE Global Investors and the sale of the Solaris and Florido
Towers to the French Amundi Group. EHL
brokered the sale of the QBC 4, the first
of the many new office projects at the Vienna Hauptbahnhof which are scheduled
for completion in 2017 and 2018.
Strong impulses for the entire market will also
be created by attractive development projects
at established cluster locations like the Viertel
Zwei and Messe-Prater or near the Hauptbahn­
hof. EHL therefore assumes the EUR 3 billion
mark will again be reached, or even exceeded,
in 2017. Of particular note is the sound growth
in forward purchases, which allow investors to
secure attractive properties at an early point in
time and before completion.
Yields remain under pressure
The enormous liquidity on capital markets has
created a situation where demand still clearly
outpaces the supply of suitable investment
properties – and that, in turn, has led to a
general increase in prices. Demand by numerous highly liquid international funds whose
activities in Austria have been limited to date
is another driving factor for the decrease in
yields. There has been an influx of investors
from North America and Asia, whose attention
is focused primarily on investments over EUR
100 million. Rising rents for office space are
also contributing to the higher price level. The
margin between real estate yields and fixedincome investments, e.g. government bonds,
is still very large, but is expected to decline
during the course of the year. The prime
yields for top office properties currently equal
roughly 4 percent and are therefore trending
downward.
investment market
© ZOOM VP
10
QBC 4 | 1100 Vienna
Selected investment transactions 2016 | 2017
Period
Property
Type of use
Size | Rooms
Seller
Buyer
Q2 2016
IZD Tower
Office
64,500 sqm
Signa
CBRE Global Investors
Q1 2016
Aqua Portfolio (Solaris | Florido Tower)
Office
49,800 sqm
Union Investment
Amundi
Q2 2016
Tech Gate
Office
27,000 sqm Wr. Städtische|Wien Holding|FFG
Strabag
Q1 2016
QBC 4
Office
16,700 sqm
UBM Development AG
BDO
Q3 2016
MARXIMUM Parts 1+3
Office
14,850 sqm
HOCHTIEF
ERGO
Q4 2016
Sonnwendcenter
Office
9,980 sqm
Private investor
Generali
Q2 2016
Neue Mitte Lehen
Office
9,500 sqm
UBM Development AG
Semper Constantia
Q4 2016
Austrian retail portfolio
Retail
108,000 sqm
IMMOFINANZ AG
Private investor
Q4 2016
UNO Shopping
Retail
47,000 sqm
Bank Austria Real Invest
Private Investors
Q1 2016
Fischapark (50%)
Retail
42,800 sqm
SES
Allianz Real Estate
Q1 2017
ZIB Salzburg
Retail
16,650 sqm
IMMOFINANZ AG
Private Investors
Q2 2016
Retail park Stadlau
Retail
7,670 sqm
Private investor
TIAA
Q1 2016
Hilton Stadtpark
Hotel
579 rooms
Raiffeisen Zentralbank
Villagio Group
Q4 2016
QBC Hotels (IBIS & NOVOTEL)
Hotel
577 rooms
UBM Development AG
Amundi
Q2 2016
La Stafa - Ruby Marie Design Hotel
Hotel
186 rooms
Private investor
CBRE Global Investors
Q1 2016
Hotel Imperial
Hotel
138 rooms
Starwood Gruppe
Al Habtoor Group
Q3 2016
Schottenring 19
mixed use
9,780 sqm
Private investor
Bank Austria Real Invest
Q3 2016
Bösendorferstraße 2-4
Q2 2016
Aviva Logistics portfolio
Q4 2016
Linked Living
Q3 2016
Portfolio (7 properties)
Source
Market Resarch | Q1 2017
mixed use
4,100 sqm
IMMOFINANZ AG
Private investors
Logistics | Industry
49,000 sqm
Aviva Investors
Tristan Capital Partners
Student housing
589 rooms
Corestate
Universal Investment Platform
Retirement homes
294 rooms
Bank Austria Real Invest
Emerge Capital
EHL Real Estate Group provides consulting
services to tenants and/or lessors
11
References
References
Investment
© EHL
Sonnwend Center
Total space
Client
9,980 sqm
Private investor
EHL brokered the sale of Sonnwend Center to the Generali
Insurance Group within the framework of an exclusive
contract. Both the sale procedure and support for the due
diligence audit were managed by EHL.
© EHL
Neue Mitte-Lehen
EHL brokered the sale of Salzburg property Neue Mitte-Lehen,
developed by UBM, to a special fund managed by Semper
Constantia.
Total space
Client
9,500 sqm
UBM
© ZOOM VP.AT
QBC 4 | Karl-Popper-Straße 4
Total space
Client
16,700 sqm
UBM
With QBC 4, EHL brokered the first of a series of new office
properties that are under construction north of the Vienna
Hauptbahnhof to the Austrian tax consulting and auditing
company BDO.
Leasing
© VDX.AT
Coca-Cola HBC Austria GmbH
Total space
Client
6,500 sqm
Coca-Cola
HBC Austria GmbH
EHL advised the beverage group Coca-Cola HBC Austria
GmbH in the search for a new office location and brokered the
company approx. 6,500 sqm of office space in Business Park
Vienna at Wienerberg.
© EHL
FCP-Fritsch-Chiari & Partner ZT GmbH
Total space
Client
4,300 sqm
FCP-Fritsch-Chiari &
Partner ZT GmbH
Fritsch-Chiari & Partner ZT GmbH, an international engineering firm, was advised exclusively by EHL in its search for office
space and leased 4,300 sqm at City Point, close to the railway
station Wien-Mitte.
© Sopranus
Vienna Municipal Administration
Total space
Client
5,500 sqm
City of Vienna
EHL brokered the second largest third-party leasing of the
City of Vienna in 2016: 5,500 sqm for a customer service
centre were leased in the Office Campus Gasometer in St.
Marx.
This report is a translation. In the event of doubt the German-language report is to be used. The information and forecasts
in this report are made without guarantee, warranty or liability.
Cover: EHL/Horst Dockal
The digital version of the report can be downloaded under www.ehl.at/en/marktberichte.
Die Angaben und Prognosen dieses Berichts erfolgen
ohne Garantie, Gewähr oder Haftung.
Cover: EHL/Horst Dockal
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www.ehl.at/research zum Download zur Verfügung.
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