Specialists from CBRE – International Industrial Actual Property Companies analyzed the tendencies in the true property sector and in addition revised its forecasts.
The beginning of the 2022 actual property yr has been sturdy in Austria, however the present geopolitical modifications and related challenges reminiscent of rising power prices, supply bottlenecks and excessive inflation are additionally affecting the true property market. nationwide, so the forecasts have to be revised. . “Nevertheless”, says Andreas Ridder, Managing Director of CBRE Austria & CEE, “Austria stays a protected and – in comparison with different markets – secure ‘haven’ for traders”.
Investments: revised forecasts, Austria stays secure
“We have now revised our forecast for 2022 downwards in current months. After a secure first half, we anticipate actual property investments of 1.8 billion euros with a results of round 3.5 billion euros on the finish of the yr. ‘yr,” says Georg Fichtinger, Head of Funding Properties at market chief CBRE, who factors out that traders are extra cautious and selective. The professional additionally anticipates an increase in yields within the second half.
A very powerful tendencies for actual property investments:
- Dealing quantity expectations have been revised down for 2022, however the year-end consequence may nonetheless be consistent with the 10-year common
- ESG compliance stays an necessary criterion that determines the potential for elevated rents and gross sales income
- Actual property stays a beautiful type of funding, because the indexation of economic leases can defend towards a decline in worth
- Rising yields within the second half of 2022 in all asset courses. Within the logistics asset class, returns will rise with secure funding earnings due to rising rents
Workplace market: restricted by low emptiness charges and low completion charges
Round 76,000 sq. meters of workplace house was let in Vienna within the first half of 2022, which corresponds to a development of round 15% in comparison with the identical interval in 2021. “Regardless of a fairly good first half, we anticipate a quantity whole rental of round 160,000 sq. meters within the Vienna workplace market by the top of the yr”, says Patrick Schild, company supervisor at CBRE, who explains the low emptiness charge and above all of the low completion charges in Vienna clarify the tense scenario.
Major tendencies within the Viennese workplace market:
- As a result of low emptiness charge and the same challenge pipeline, the Vienna workplace market is popping right into a rental market
- Emphasis is on ESG-compliant properties and fashionable areas in central areas that allow the implementation of hybrid and versatile work methods
- The present market scenario is driving up rents, particularly in good downtown areas
- Rising development prices and lack of constructing supplies will trigger uncertainty in challenge planning – though there are at present no main development delays
Retail market: social and geopolitical modifications have an effect on retail
Whereas retail house in Vienna’s A areas is rapidly discovering new tenants, the scenario in Austria is totally different: within the clothes sector alone, retail house fell by 2% final yr, in keeping with the affiliation skilled. Inflation, altering shopper conduct, rising power costs and the aftermath of the pandemic are influencing the event of the Austrian retail market. “We see retail house in residential areas turning into extra enticing because the grocery store inside strolling distance turns into increasingly more necessary,” says Walter Wölfler, Head of Retail Austria and CEE at CBRE, who sees potential in mixed-use actual property particularly. .
A very powerful tendencies within the Austrian retail market:
- Supply delays proceed to have an effect on retail, and the trade – just like the restaurant trade – can also be scuffling with employees shortages
- Geopolitical uncertainties, excessive inflation and the brand new CO2 tax from October pose challenges for the energy-intensive retail asset class
- In response to rising power costs, customers are altering their buying conduct, which is especially useful for discounters
- Combined use is the brand new pattern within the retail market. Supermarkets in walkable residential areas have gotten more and more necessary
- Throughout Austria, modified shopper habits result in steadily declining regional growth
Logistics market: excessive demand, well-stocked ending pipeline
In and round Vienna alone, round 100,000 sq. meters of logistics house had been let within the first half of 2022. That is the consequence of the expansion in e-commerce, for which retailers and parcel service suppliers want fashionable house, in addition to the reorganization of provide chains because of supply bottlenecks. “We face a completion document: By 2024, round 1.4 million sq. meters of house are to be accomplished within the logistics hotspots of Vienna, Graz and Linz, greater than ever earlier than,” says Franz Kastner , Affiliate Director Logistics & Industrial at CBRE . Kastner additionally reviews that high rents will present above-average development because of rising development and land prices.
A very powerful tendencies within the logistics market:
- Demand for logistics house stays excessive, particularly from e-tailers and parcel service suppliers
- The scenario within the Austrian actual property market continues to deteriorate, which implies that brownfields and B-locations are gaining in significance
- Logistics rents will proceed to rise because of sturdy demand and rising constructing and land costs. Progress in 2022 is predicted to be above common
- ESG standards have gotten more and more necessary for builders, traders and customers: technically, ecologically and socially. It may be assumed that the labor scarcity in logistics and retail will proceed to worsen
- Traders proceed to deal with logistics actual property. Nevertheless, rate of interest reversal comes with uncertainties and better returns
Housing market: slowed developments
Not solely the fast enhance in development prices, but additionally inflation and rising rates of interest are affecting the scenario on the housing market. “As a result of very lively development exercise in recent times, there are lots of merchandise in the marketplace that now have to be fulfilled. Because of this, and above all because of the tightening of lending standards, developments and actions on the housing market in Austria are at present slowing down,” says Georg Fichtinger.
A very powerful tendencies within the housing market in Austria:
- The truth that residential tasks are postponed because of excessive development and financing prices is cushioned by the excessive variety of completions in recent times
- The land provide is restricted within the metropolises. This, mixed with rising development prices, drives up buy costs
- The potential for lease will increase is restricted by the present financial scenario and any enhance is extra prone to be because of inflation. Affordability and massively rising delicate prices are high of thoughts and will lead to future lease changes
- Compliance with ESG standards is turning into more and more necessary. A fall in the price of development just isn’t foreseeable.
- “Everlasting investments” have gotten extra necessary to traders than “futures”.