Office Market Report 2018 - Vienna office market remains stable
At the end of the year, Modesta Real Estate once again publishes the annual office market report. Continuing economic growth, the significant increase in letting performance of modern office space (compared to the weak previous year) and a considerably higher completion volume indicate stability of the Vienna office market.
The prime yields for office space in Vienna in 2018 were 3.75 percent, slightly down from the previous year. In Europe, however, yields are still higher in Vienna when compared to London, Munich, Paris or Madrid. The prime yield for modern logistics properties in a very good location was 5.5 percent in 2018.
On the investment market, demand is expected to remain strong, but the record level of the previous year is likely to be difficult to achieve again due to the low supply of large-volume prime properties. However, international investors are showing growing interest in the domestic real estate market. Above all, investors from the Asian region are increasingly appearing as potential buyers and will play a significantly important role in the market alongside the German investors, who have clearly dominated the market to date.
For 2019 it is expected that only around 40,000 m² of office space will be realized. But for the years 2020 and 2021, however, a large number of projects are expected to be completed again, for example “The Brick” and “SILO PLUS” (Wienerberg). The letting performance of modern office space is being estimated at around 185,000 m².
"In 2018 a large number of state-of-the-art office properties were finalized. This and the strong economy support the positive trend on the Vienna office market. This results in a stable, balanced market with a range of first-class office space in all price categories, " says Andreas Polak-Evans, SIOR and Managing Partner of Modesta Real Estate.