The investment market continues its favourable development: In the first half of 2015 the transaction volume amounted to €870m. Q2 was significantly stronger (€570m) with almost double the volume of Q1. However, the initial prognosis was not fully met as several major transactions are still pending. The outlook for the upcoming months is very positive: several large-scale transactions are expected to be completed, bringing the overall transaction volume to an estimated €3bn. Thus, last year’s transaction volume will most likely be met and may even be exceeded.

^{Source: EHL, Savills European Research}

Prices for top properties continued to rise and yields are increasingly under pressure. Prime yields for office properties are 4.75%, 5.0% for shopping centres and 5.75% for retail parks. Prime yields for high street properties are 3.75%, sometimes even lower if rent levels have major upward potential. While investors still prefer investments in core properties, supply in this segment is very limited. As a result the demand for properties in the other segments (core+, value added) as well as in secondary markets – especially the Austrian provincial capitals - is rising in order to generate somewhat higher yields.

In Q1 retail investments dominated the market whereas office properties accounted for the lion’s share of investments in Q2. Residential properties are mostly sought after by private investors, in particular in the submarket of tenant-occupied houses. Significant transactions in the first six months were the sale of the hotel Courtyard by Marriott in the Viertel Zwei office park, the sale of the retail parks Vösendorf (12,300 sq m) and Alt Erlaa (19,000 sq m), as well as the sale of space2move with 51,600 sq m office space.

^{Source: EHL}

There were remarkable shifts in the origins of investors and the market has become much more international. While Austrian and German investors are still the biggest group of investors, the activity of other foreign investors rose significantly. Investors from the UK, Middle East and Asia with high liquidity are increasingly interested in the stable Austrian real estate market, specifically in large properties and portfolio transactions which will further stimulate the market.