We stand for real estate.

Retail Market Report Austria |2019

We stand for

Retail

The continued shift in consumer behaviour and the high volume of retail

space combined with steady growth in online competition have created a

challenging market environment for retail properties. However, challenges

frequently also create opportunities for developers, investors and retail

chains which must find the right answers to this new market environment.

The experienced EHL retail team is ready to accompany you on this very

interesting and promising course with its know-how, detailed market

knowledge and creative solutions.

Michael Ehlmaier FRICSManaging Partner

EHL Immobilien GmbH

Shopping centre operators can no longer rely on tried and tested

concepts and a well-known tenant mix for their success. What is needed

are innovative concepts that make the shopping centre a real experience

for customers and a place to visit with family and friends.

More gastronomy and a wider range of activities like indoor playgrounds

and other sport facilities have become just as indispensable as a

unique offering for shoppers. All this requires not only courage, but also

investments on the part of operators – but both will definitely pay off over

the long-term because innovative concepts are the way of the retail future.

The successful repositioning of numerous retail properties and the

successful market entry and roll-out of new retail chains underscore the

quality of our comprehensive consulting and services.

We would be happy to advise you and help you take off to a new direction.

Stefan Wernhart MRICSManaging Director

EHL Gewerbeimmobilien GmbH

Jörg F. Bitzer MRICSHead of Retail Properties

EHL Gewerbeimmobilien GmbH

Preface

3

Overview Retail Market Vienna

Executive Summary

The new gastro boom

Shopping is no longer the only reason for a trip

to the store, dining out is playing an increasing

important role: The percentage of gastronomy space

in shopping streets and centres is growing. System

gastronomy, in particular, is ready and able to match

the square metre rents paid by retailers and is

looking for more space than ever before.

Production of space in Viennatrending towards zero

The demand for space in Vienna appears to be

satisfied for the time being. Only 9,000 sqm were

placed additionally on the market in 2018, and the

trend is pointing downward. In comparison with the

increasing volume of space that is being removed

from the market, this means a steady decline in the

selling space per capita.

Further increase in tourism revenues in Vienna and Salzburg

Tourism remains the bright spot for Brick & Mortar

retail. Revenues from city tourism are becoming

progressively more important for shops in good and

very good locations, above all in the booming city

destinations of Vienna and Salzburg.

Creative newcomers

The top dogs are thinning out their branch networks

but, at the same time, a growing number of new and

creative concepts are entering the market. Austria

remains one of the most popular expansion targets

for international retailers.

Prime rents in Vienna under the global Top 10

The concentration on absolute prime locations – in

this small market segment – has been responsible

for a series of rental price records. Square metre

rents of up to EUR 400 on Kohlmarkt and part of

Graben (both in the First District) again place Vienna

in the Top 10 of the global rent ranking.

Online and east competition benefit from the Sunday opening ban in Vienna

24/7 “opening hours“ in online retail and top offer-

ings in the neighbouring countries to the east make

Vienna’s restrictive Sunday opening regulations a

growing problem for the local retail trade. The result

is a substantial outflow of purchasing power to

Austria’s neighbours and the Internet.

More and more alternative concepts for ground floor space

There has been an increase in the range of alternative

uses for space at weaker locations. In addition to

the “conventional“ warehouses, offices and student

housing, the market is also seeing a greater number of

medical facilities, day care centres and other services.

Source: Austrian Federal Economic Chamber | GfK

Important market indicators

Economic Data Austria 2019

Unemployment rate (Eurostat) Austria 4.6 %

EU (28) 6.6 %

Nom. GDP EUR bn. 402.07

Economic growth 2.0 %

Inflation 2.1 %

State budget 0.4 %

GDP per capita Austria 40,369 EUR

EU (28) 32,013 EUR

Purchasing power per capita (2018) Österreich 23,282 EUR

4

Facts and Figures at a Glance

Retail data Austria

Revenue development in Brick & Mortar retail 2008—2018

The development of revenues in Brick & Mortar retail includes food retailing based on the Nielsen reveneue barometer (preliminary values). The price adjustment for the real revenue development was based on a Statistik Austria branch deflator. Changes nominal and real in per cent vs. previous year Source: KMU Forschung Austria | Statistik Austria

20182008 2009 2010 2011 2012 2013 2014 2015 2016 2017

4.0 %

3.0 %

2.0 %

1.0 %

0

-1.0 %

-2,0 %

2.1

1.3 1.2 1.1 1.00.4

-1.1

-1.7

-1.0 -0.9-0.5

-0.3

0.21.1

0.3 0.60.9

1.2

2.0 1.8

0.3

2.7

Annual expenditure on gastronomy per inhabitant in EUR

Switzerland

Austria

Norway

Italy

Sweden

Germany

Belgium

Spain

Turkey

France

Portugal

Finland

Slovenia

Slovakia

Czechia

Hungary

Poland

Bulgaria

Croatia

Russia

Montenegro

Macedonia

Serbia

Albania

Bosnia and Herzegovina

0 500 1.000 1.500 2.000 2.500 3.000

Source: RegioData Konsumausgaben

5

E-Commerce-Study Austria 2018 | Consumer behaviour in distance selling

Number of Brick & Mortar shops decreasing – number of online shops increasing

Source: KMU Forschung Austria

Source: KMU Forschung Austria

2006 2010 2013 2017 2006 2010 2013 2017

47,800

3,200

44,500

5,700

41,600

7,500

37,400

9,000

Brick & Mortar shops Online shops

Top-Seller in online shopping

Clothes / Textiles

Books / Magazines

Electronic devices

Shoes / Leather goods

Sporting goods

Toys

Cosmetics / Perfume

Music (CD / DVD / Download)

Furniture / Home decoration

Computer hardware

Tools / DIY

Computer software

Watches / Jewellery

Food / Beverages

Products for pets*

Glasses

0 5% 10% 15% 20% 25% 30%

* Note: Product group not researched in 2006. Online shopping for selected product groups. 2006 2017. Share of Austrians (16-74 years, in %). Source: KMU Forschung Austria

Shopping via distance selling• mail order shopping• Online shopping• Online shopping via smartphone

of total, retail relevant consumer spending

+ 300 mln. Euro = 4%7.9 bn. EuroShopping expenditures in Austria and abroad

11%

0 0 0 2 0 0 0 3 0 0 0 4 0 0 0 5CARD

0 0 0 2 0 0 0 3 0 0 0 4

MONEYCOLLECTION

PAY

5.0 mln. shop via distance selling= 67% of Austrians(ages 15 and up)

+ 100,000= 2%

26

30

23

15

13

12

11

11

10

8

7

7

6

6

5

4

10

16

12

2

5

4

2

10

2

7

2

7

2

2

1

6

Fans of travel on the Danube River will undoubtedly

have a reason to celebrate with the start of spring

season in 2019. The Vienna-Bratislava route will now

be serviced by a new Twin City Liner, which can carry

twice as many passengers as its predecessor.

Vienna’s retailers will most likely be less enthusi-

astic: Sunday by Sunday many Vienna residents

and, above all, thousands of well-off, shopping-savvy

tourists use the catamaran as well as specially

organised bus trips for a shopping spree in the

Slovakian capital – and these numbers are expected

to increase in the future. Most of the passengers are

less interested in the beauty of historical Bratislava

than in the offerings in the modern shopping centres

and stylish shopping streets of the Slovak capital.

“A Sunday trip to Bratislava has

already become a fixed point

in the programme of many

international tour operators.“

The expansion of river travel as well as the improve-

ment of other traffic connections to the east have

again moved a recurring issue into the centre of

attention: Domestic retailers – especially in the

weekend tourism hot-spot Vienna – have always

lost a significant part of their revenues due to the

restrictive Sunday opening hours in this country. And

forecasts point to an increase in this trend.

Three developments underscore the fact that the

general ban on Sunday opening does not lead to a

shift in sales to Monday, but to a general loss for

Austrian retailers:

•Competition from the Internet: Online shops are also

open on Sundays. A simple mouse click allows con-

sumers to also shop on Sunday, instead of waiting for

a day when the stores are open. Sunday is becoming

a very popular day for online shopping, above all

because of the substantial amount of free time. In

addition, online shops frequently use special rebates

on Sundays to generate even more revenues.

•Easy-to-reach shopping facilities in the neighbouring

countries: Increasingly stress-free and faster travel to

the attractive shopping centres across Austria’s bor-

ders make these alternatives even more appealing, in

particular for consumers from the greater Vienna area.

•Booming city tourism: The record number of tourists

who, as a rule, only book very short city trips is

becoming a more important factor for the retail trade

in comparison with domestic customers. The ban

on Sunday opening disregards this significant and

steadily growing revenue driver and, instead, directs

this income to Austria’s eastern neighbours.

Revenue Killer: Sunday Opening Hours

© Jake Sudgen © Mikko Hietanen / Shutterstock.com

7

A Window to the Future

The following megatrends will influence

the shopping centre retail trade in the

future and should be reflected in the

design of retail properties.

The third location

In addition to home and the workplace,

an increasingly important factor

will be the creation of places for

“social interaction“ – meaning more

gastronomy and entertainment and

less traditional selling space. Above all,

interactive areas like language schools

and sport facilities should be integrated

in the floor space concepts.

Individuality as a substitute for location

“LOCATION, LOCATION, LOCATION“ will

be replaced by “CONCEPT, CONCEPT,

CONCEPT“. Customers are looking for

individualisation and are also prepared

to travel to less optimal locations for

unusual concepts that make storytelling

possible.

“Corporate atmosphere“ as a substitute

for “corporate architecture“

Location-specific design elements

are becoming more important than

strict conformity to a global corporate

design that creates the perfect brand

presence, but leaves too little room for

regional specifics and personal, local

customer contacts.

Experience as a substitute for shopping

Shopping must also have a recreational

and experience value. Many items

are not purchased because they are

needed, but because they come from

a specific place. The best examples

are museum shops or the increasingly

popular “concept stores“.

The no-shopping Sunday therefore also has an indirect effect

on the market for retail properties. The few winners include

shop space for travel necessities, like books and newspapers,

at railway stations and individual locations where, for example,

supermarkets are also allowed to open on Sunday. The

Sunday lines in these stores are generally long. The negative

effects are felt, in particular, by streets in the city centre,

which were considered prime locations only a few years ago.

A voluntary option for Sunday opening would create significant

opportunities not only for the Mariahilfer Strasse and Vienna’s

First District, but also for streets like the Rotenturmstrasse or

Wollzeile, which have registered declines in rents and rising

vacancies despite the high tourist frequency in the inner city.

Hoping for tourism zones

Neither the retail sector nor the real estate market sees a

realistic chance for a general change in the Sunday rules, but

optimists are hoping for a certain loosening, at least through

the designation of tourism zones. In these areas, shops are

also allowed to open on Sundays. Vienna is currently the only

Austrian province without a single tourism zone.

“There are tourism zones in every

Austrian province – only the

cosmopolitan city Vienna is lagging

behind this development.“

Inner city locations, above all, would benefit significantly

from tourism zones. These sites would again become more

attractive for retailers in the premium to high-price segment

from tourism-related branches like textile, jewellery and shoes.

Another positive factor would be a stronger demand for space

by traditional souvenir shops and food trade. In this way, the

Sunday opening hours could be transformed from a revenue

killer into a revenue bringer.

8

Market entriesby selected new retailers (2018|2019)

© WHYAT

EHL brokered a new location to fashion label WHYAT in Strauchgasse.

FashionSpiegelgasse1010 Vienna

FashionKärntner Straße

1010 Vienna

GastronomyMariahilfer Straße

1060 Vienna

HouseholdTuchlauben

1010 Vienna

TelecommunicationsKärntner Straße

1010 Vienna

Sporting goodsWähringer Straße

1090 Vienna

ShoesSiebensterngasse

1070 Vienna

InteriorAm Hof

1010 Vienna

100% SCHWARZ

CMYK 0/0/0/100RGB 24/23/21

100% WEIß

CMYK 0/0/0/0RGB 255/255/255

FashionStrauchgasse1010 Vienna

9

© WHYAT

GastronomyPlus City

4061 Pasching

GastronomyHaidcenter4053 Haid

Fashion4220 Freistadt

Fashion6020 Innsbruck

Indoor PlaygroundAuhof Center1140 Vienna

GastronomyMurpark

8041 Graz

GastronomyDesigner Outlet7111 Parndorf

FashionPlus City

4061 Pasching

Vapour productsAuhof Center1140 Vienna

Fashion6370 Kitzbühel

LingeriePlus City

4061 Pasching

Concept StoreAuhof Center 1140 Vienna

Discounter2201 Gerasdorf

GastronomySCS

2334 Vösendorf

InteriorSCS

2334 Vösendorf

10

Steady population growth, solid purchasing power

(+3.1 per cent per capita) based on strong economic

growth and booming tourism, which reached a new

record high with 16.2 million overnight stays or a

plus of four per cent, form the stable foundation for

Vienna’s retail trade. This was reflected in 1.8 per

cent nominal revenue growth in Austria during 2018.

Brick & Mortar retail is, however, on the decline

in real terms due to the growing share of online

shopping. Every eighth shopping Euro in Austria

is currently spent in the Internet, with a further

increase expected, and nearly 50 per cent of all

consumers buy regularly online. Fashion, shoes, elec-

tronics, books and toys are the branches particularly

affected by this trend.

This development has been reflected in a decline

in the demand for space and a steady drop in the

selling space per capita. The substantial slowdown

in this trend during the past year indicates, however,

that the major market shakeout is apparently over for

the most part. On a smaller scale, ground floor areas

outside the top locations are still being rezoned.

Former retail space is being transformed, above all,

into medical facilities, day care centres or offices,

all of which create new opportunities for property

owners.

Eating is the new shopping

An ever-greater share of consumer spending is

directed towards gastronomy and, consequently, has

an influence on the real estate market. The Austrian

market currently shows a demand for 400 additional

gastronomy locations. This segment can, to a certain

extent, offset the declining demand in the traditional

retail trade.

Vienna’s prime locations – the Graben, Kohlmarkt

and Kärntner Strasse – are showing very positive

development. A top rent of EUR 400/sqm on the

Kohlmarkt again placed Vienna among the world’s

ten most expensive retail locations. The prices

in the other top areas of the “Goldenes Quartier”

(Graben, Kärntner Strasse) are also moving towards

the top rents on the Kohlmarkt. In contrast, prices

have come under slight pressure on re-letting in

nearby streets like the Rotenturmstrasse or Wollzeile.

Vienna‘s inner city remains a fascinating location

for global chains and attracted further well-known

international retailers in 2018 – above all, the

Kärntner Strasse with Apple, Cheese & More and

&otherstories as well as the Mariahilfer Strasse with

HEMA and Scotch & Soda.

The Vienna Retail Market

© SES © SES

Source: EHL Market Research | Q1 2019

Prime rents in Vienna in EUR / sqm

12 | 13 | 14 | 15 | 16 | 17

400

400

400

400

400

400

400 stable

320

340 39

0

340

| 18 | 19*

Outlook

* Forecast

11

Salzburg

Upper Austria

Styria

Carinthia

Lower Austria

25.1 %

Burgenland44.6 %

24.0 %

20.4 %

21.3%

21.8 %

27.4 %

Vienna26.7 %

Vorarlberg18.9 %

Tyrol

Market share of shopping centres and retail parks

Austrian shopping centres will turn their attention

to the realisation of new concepts in the coming

years, since the growth in space has largely come to

a standstill. Innovation and creative refurbishments

will also be required to address the recent steady

decline in visitor frequency and vacancy rates which

have reached an average of five per cent.

One trend has become clear: Space that was

previously occupied by traditional retailers is

being used more frequently for gastronomy and

entertainment. One good example is Vienna‘s

Auhofcenter, which has leased 50 per cent of the

9,000 sqm expansion areas to non-retailers. Included

here, among others, is the spectacular 2,000 sqm

“Tiger’s World“ indoor action recreation area for

families. The “Hey“ in the Upper Austrian city of

Steyr, one of the few new concepts to open in 2019,

already has three restaurants in addition to its 35

shops. Retail parks have also been unable to avoid

this culinary trend: Gastronomy facilities have now

become key frequency drivers in larger centres and,

for smaller properties, at least one supermarket is an

indispensable success factor.

The second major development is the reduction in

average shop size. This is a result, on the one hand,

of cost considerations and, on the other hand, of

the shift in revenues to online and a change in the

function of branches to “showcases“ which present

the absolute brand highlights. That requires less

space than actual selling, but also creates the need

for new space allocation concepts.

Shopping centres and retail parks

Source: | Q1 2019

Source: EHL Market Research | Q1 2019

Development of shopping centre prime rents in EUR / sqm

12 | 13 | 14 | 15 | 16 | 17

125

120

12012

5

110

stable

100 10

5

105

| 18 | 19*

Outlook

* ForecastSource: EHL Market Research | Q1 2019

Rents shopping centres and retail parks | Q1 2019

net rent EUR/sqm/m Price trend

Prime location 40 - 120 stable

SCS, Donauzentrum, Auhof Center etc.

Secondary location 15 - 40 stable

Q19, Lugner City, BahnhofCity Wien West

District centres 8 - 12 slightly decreasing

Retail parks

Vienna 8 - 13 stable

Federal provinces 5 - 11 slightly decreasing

12

Vienna Shopping Centres |Shopping Streets

Thaliastr.

EZ 02

EZ 09

STEFFL Department Store

Kärntner Straße 19 | 1010 Vienna12,500 sqm

Gerngross

Mariahilfer Straße 42-48 | 1070 Vienna30,000 sqm

Shopping Center Nord

Ignaz-Köck-Straße 1 | 1210 Vienna32,000 sqm

Lugner City

Gablenzgasse 5-13 | 1150 Vienna38,200 sqm

© Lugner City

BahnhofCity Wien West

Europaplatz 2-3 | 1150 Vienna20,500 sqm

© ECE

Riverside

Breitenfurter Straße | 1230 Vienna22,000 sqm

© Riverside

SCS Shopping Mall

Vösendorf Süd | 2334 Vösendorf192,500 sqm

© SCS

Q19

Grinzinger Straße 112 | 1190 Vienna15,000 sqm

© SCN

© STEFFL Department Store

© Auhof Center

Goldenes Quartier

Tuchlauben | 1010 Vienna11,500 sqm

© Goldenes Quartier_Gregor Titze © Q19

Auhof Center

Albert-Schweitzer-Gasse 6 | 1140 Vienna51,000 sqm

Mei

dlin

ger

Hau

ptst

r.

© Deka Immobilien Management GmbH

Data: GLA in sqm

Source: | EHL Market Research

District centers in Vienna

EZ 01 Arcade Meidling

EZ 02 Bezirkszentrum Meiselmarkt

EZ 03 EKZ Lutz - Floridsdorf

EZ 04 EZS Floridsdorfer Spitz

EZ 05 Gasometer City

EZ 06 Mahü 77

EZ 07 Großfeldzentrum

EZ 08 Hanssonzentrum

EZ 09 Interspar EKZ Ottakring

EZ 10 Kaufpark Alt Erlaa

EZ 11 Ringstraßen-Galerien

EZ 12 Trillerpark

EZ 13 Zentrum Simmering

EZ 14 Stadlau

13

Thaliastr.

Innere Maria

hilfer S

tr.

Landstraßer Hauptstr.

Ringstraße

Gürt

el

Donaukanal

Kohlm

arkt

EZ 04

EZ 12 EZ 07

EZ 08EZ 10Graben

Kärntner Str.

Favoritenstr.

A22

A23

S 2

EZ 03

Galleria

Landstr. Hauptstr. 97-101 | 1030 Vienna13,900 sqm

EZ 05

EZ11

FMZ14

EZ 13

Columbus Center

Columbusplatz 7-8 | 1100 Vienna18,000 sqm

Donau Zentrum | Donau PlexWagramer Straße 81 | 1220 Vienna120,000 sqm

© Donau Zentrum | Faruk Pinjo

© Citygate Shopping

Millennium CityHandelskai 94-96 | 1200 Vienna51,800 sqm

© Millennium City

Gewerbepark StadlauGewerbeparkstraße | 1220 Vienna66,000 sqm

© wikipedia

© schreinerkastler.at

Stadion Center Olympiaplatz 2 | 1020 Vienna26,700 sqm

© Stadion Center

© CA Immo

© EHL

Shopping Resort G3 Gerasdorf

G3 Platz 1 | 2201 Gerasdorf70,000 sqm

© Huma eleven | Robert Fritz

Neubaug.

EZ 01

EZ 06

Citygate

Wagramer Straße 195 | 1210 Vienna17,800 sqm

Seestadt AspernMaria-Tusch-Straße | 1220 Vienna8,500 sqm

BahnhofCity WienHauptbahnhof

Am Hauptbahnhof 1 | 1100 Vienna23,000 sqm

© ECE

© G3 | Nagl

The MallLandstraßer Hauptstraße | 1030 Vienna26,800 sqm

© CCreal

huma eleven

Landwehrstraße 6 | 1110 Vienna50,000 sqm

14

Vienna‘s High StreetsThe structural change in retail trade is clearly visible

on Vienna’s high streets. Weaker locations are faced

with rising vacancies and the conversion of space

to other uses, while the good and top locations are

seeing higher tenant turnover. The Kärntner Strasse

is one example of this trend: The opening of the

Apple flagship store was also accompanied by shop

closings on the part of traditional tenants. The interest

in available space remains high, but it takes longer

than normal for the renter and tenant to agree on a

common price basis.

On the Mariahilfer Strasse, the structural change is

also in full swing with less textile and more gastro-

nomy. The “Vienna KaDeWe“, which was announced

by Signa as a replacement for the current Leiner

location, and the future City-Ikea at the west railway

station will play an important role in future develop-

ments. The decisive issue for two side streets, the

Neubaugasse and Kirchengasse, is the construction

of the U5 underground line. Space which becomes

vacant is now difficult to rent because retailers fear a

substantial drop in revenues during the construction

period. However, both of these streets can expect

strong positive effects over the long-term.

Pedestrian frequency in Vienna‘s most important shopping streets

Mariahilfer Straße

Kärntner Straße

Graben

Favoritenstraße

Kohlmarkt

Rotenturmstraße

Meidlinger Hauptstraße

Neubaugasse

Landstraßer Hauptstraße

Wollzeile

54,677

54,333

53,453

38,084

22,763

25,385

19,984

16,268

18,518

10,636

70,379

69,776

70,121

41,261

33,666

27,047

19,065

19,180

14,546

12,958

Thursday Saturday

Shopping streets Vienna

Source: Austrian Federal Economic Chamber 2017

Sales space (in sqm) and share of retail (in %) in Vienna’s High Streets

Innere

Mariahilfer Str. City

Landstraßer

Hauptstraße

Favoritenstraße

Floridsdorf

Central area

Simmeringer

Hauptstraße

Thaliastraße

Meidlinger

Hauptstr.Äußere

Mariahilfer Str.

Alsergrund

Central area

250,000

200,000

150,000

100,000

50,000

90 %

80 %

70 %

60 %

50 %

40 %

30 %

20 %

10 %

Retail Retail-supporting supply Vacancy rate Share of retail trade Source:

Quelle: EHL Market

Rents top shopping streets | Q1 2019

Net rent EUR /sqm/m

Kohlmarkt 250 - 400

Graben 190 - 300

Kärntner Straße 110 - 330

Innere Mariahilfer Straße 20 - 110

Rotenturmstraße 30 - 120

Favoritenstraße 15 - 55

Neubaugasse 15 - 55

Landstraßer Hauptstraße 10 - 50

Meidlinger Hauptstraße 10 - 30Source: EHL Market Research | Q1 2019

15

Vienna | City

The “Golden U“ is shining brighter

The luxury miles Kärntner Strasse,

Graben and Kohlmarkt, which

together form the “Golden U“, have

been largely successful in avoiding

the general problems which face

Brick & Mortar retail. It is, however,

striking that (especially on the

Kärntner Strasse) the pace of

tenant turnover has increased and

the significant differences in

rental prices, which range from

EUR 100/sqm of selling space on

the Kärntner Strasse up to

EUR 400 on the Kohlmarkt, are

levelling out. This development was

also fuelled by the prestigious

Apple flagship store, which opened

on the Kärntner Strasse in 2018.

INTERNATIONALPROPERTY

CONSULTANTS

CHARTEREDSURVEYORS

INTERNATIONALPROPERTY

CONSULTANTS

CHARTEREDSURVEYORS

lauben

0 200100Meter

Shopping streets Vienna

Tuchlauben

Spie

gelg

asse

Doro

thee

rgas

se

Kohlm

arkt

Brandstätte

Seile

rgas

se

Annagasse

Krugerstraße

Seitz

erga

sse

Habs

burg

erga

sse

Maysedergasse

Bräu

ners

traße

Bauernmarkt

Johannesgasse

Graben

Hoher Markt

Wallnerstraße

Philharmonikerstraße

Tege

tthoff

stra

ße

Singerstraße

Goldschmiedgasse

Führichgasse

Weihburggasse

ngasse

Stallburggasse

Step

hans

plat

z

Rote

ntur

mst

raße

Himmelpfortgasse

Trat

tner

hof

Petersp

latz

Bognergasse

Lilie

ngas

se

Jasomirgottstraße

Neu

er M

arkt

Kärn

tner

Str

aße

Stock-im-Eisen-PlatzH&M

Max Mara

Chanel

Versace

Zara

Hermès

Meinl Gourmet

Tiffany

Louis Vuitton

Prada

Dsquared2

Forever 21

Kaufhaus Steffl

Peek & Cloppenburg

Foot Locker

Michael Kors

Palmers

Desigual

Hotel Sacher

Calzedonia

Swarovski

Jimmy Choo

Humanic

Nr. 14

Nr. 5

Nr. 8-

10

Nr. 14

Nr. 1

Nr. 8

Nr. 12

Nr. 22

Nr.

1

Nr.

4N

r. 12

Nr.

9

Nr.

19

Nr.

29

Nr. 4

Nr.

32-3

4

Nr.

39N

r. 24

Nr. 19

Nr. 1

Nr. 3-7

Nr. 4

Nr. 4

Nr. 16

Fendi

Zara HomeNr.

49

TOD's

Apple

↑

Seidengasse

Stollgasse

Kandlgasse

Mariahilfer Straße

Kaiserstraße

Lindengasse

Zieglergasse

Gumpendorfer Straße

Neubaugasse

Linke Wienzeile

Schottenfeldgasse

Kirchengasse

Westbahnstraße

Esterházygasse

Siebensterngasse

Zollergasse

Apollogasse

Win

dmüh

lgas

se

Stiftgasse

Otto-Bauer-Gasse

Rechte Wienzeile

Schadekgasse

Museum

splatz

Theobaldgasse

Andreasgasse

Amerlingstraße

Neubaugürtel

Richtergasse

pend

orfe

r Str

aße

Barnabitengasse

Mariahilfer Straße

Karl-Schweighofer-G

asse

Westbahnhof

Rechte Wienzeile

Nr. 63

Nr. 50

Nr. 42-48

Nr. 26-30

Nr. 18

Nr. 37

Leiner

Peek & Cloppenburg

Monki

GerngrossHumanic

CCC

TK Maxx

Pull & Bear

Nr. 77

WeekdayNr. 83

C & A

Hämmerle

Nr. 96

Nr. 105

Nr. 120

Terranova

Urban Outfitters

Nr. 71

Nike StoreHema

S tand: 09/2018

Hausrat, E lektrowaren

Sonstiges

W ohnungse inrichtung

Shopping Ma ll

Leerstand

E H -beg l. Angebot

B edarfsgruppen

Kurz fristbedarf

Bekle idung

Lage

F ußgängerzone

Begegnungszone

S tand: 09/2018

Hausrat, E lektrowaren

Sonstiges

W ohnungse inrichtung

Shopping Ma ll

Leerstand

E H -beg l. Angebot

B edarfsgruppen

Kurz fristbedarf

Bekle idung

Lage

F ußgängerzone

Begegnungszone

Vienna | Mariahilfer Straße

Price pressure on new rentals

The Mariahilfer Strasse is not really

confronted with longer vacancies,

but there has been an increase in

tenant turnover and rental prices

have become difficult to hold

constant on re-letting. The shift

from retail with its very high textile

component, among others, towards

gastronomy also requires substantial

investments by landlords. Since the

inner Mariahilfer Strasse is more

than two kilometres long, trends

differ considerably. The most positive

development has been noted in the

central pedestrian zone, which has

the highest frequencies. 0 300150Meter

Source:

Source:

Data as of 09/2018

Data as of 09/2018

Demand groupsShort-term

Apparel

Home furnishing

Household, elec. appliance

Miscellaneous

Retail supporting supply

Shopping Mall

Vacancy

Pedestrian zone

Shared space

Location

Demand groupsShort-term

Apparel

Home furnishing

Household, elec. appliance

Miscellaneous

Retail supporting supply

Shopping Mall

Vacancy

Pedestrian zone

Shared space

Location

16

The very low production of new retail space explains

why prime yields are unable to keep pace with the

office segment. In addition, the steady increase in

online retailing has led to a certain reservation on

the part of some investors. Demand is concentrated

on shopping centres and retail parks with long-term

leases as well as retail buildings in shopping streets.

Transactions also include properties with vacancies

and/or the need for positioning and restructuring,

which are being acquired primarily by developers and

retail specialists.

The price dynamics in the retail sector are lower than

for offices or residential properties. Prime yields for

retail properties are roughly 50 basis points above

the comparable figures for office properties. In

other words, this segment is definitely attractive for

yield-oriented investors with a retail affinity. Private

investors are also looking toward the retail segment

in their search for better yields. Supermarkets and

DIY-markets as well as smaller retail parks up to

EUR 10 million in the investor’s immediate catch-

ment area are in strong demand by this target group.

The earnings potential of business locations on

the ground floor of residential or office properties

is often rated much higher by local buyers than by

institutional investors.

Investment

Sound demand, stable prices

Prime yields | Shopping streets | Shopping centres | Retail Parks

Outlook 2019

4.00

%5.

75 %

6.25

%

3.75

%5.

50 %

6.25

%

3.75

% 5.00

% 5.90

%

13 14 15 16 17 18 19*

3.50

% 4.25

% 5.50

%

3.50

%4.

00 %

5.50

%

3.50

%4.

00 % 5.

00 %

3.25

% 4.00

% 4.75

%

* Forecast Shopping streets Shopping centres Retail parks Source: EHL Market Research | Q1 2019

Selected retail transactions 2018 | Q1 2019

Source: EHL Market Research | Q1 2019

Property Size sqm Location Seller Buyer

kika/Leiner-Portfolio n.a. Austria Steinhoff-Group SIGNA

Retail portfolio AT 70,000 Austria ADIA BVK

Donau Portfolio 51,100 Austria Uniqa Investor consortium

50% Weberzeile Ried 25,000 Ried SES TH Real Estate

Property Mariahilfer Straße 16,000 Vienna M&A Real Consult Imfarr

K1 Kittsee 13,100 Kittsee Private investor TH Real Estate

Pittarello Vösendorf 10,000 Vösendorf Semper Constantia Private investors

Kärntner Straße 12 3,540 Vienna Private investor Private investor

17

Fast-tracked structural change

The trends which have characterised the Austrian

retail market in recent times – the low production of

new space, the shutdown of properties at weak

locations, gastro as a substitute for retail, the

thinning out of traditional branch networks – will

continue to dominate developments in 2019 and

the years beyond. This challenging environment will,

in fact, accelerate and strengthen the structural

change.

The production of new space (excluding standalone

properties) is expected to fall below 50,000 sqm in

2019. The few new properties include the “HEY“ in

the northern section of Steyr with approximately

15,000 sqm as well as a further retail park in Völker-

markt with an estimated 3,000 sqm and the Matters-

burg shopping centre at a central location in this

district city in Burgenland. Other announcements

included the opening of the Frunpark in Parndorf

with 18,000 sqm and the expansion of the Welaspark

in Wels by roughly 3,500 sqm.

The production of new space in Vienna will be

minimal in 2019. The market is eagerly anticipating

a concrete timetable for the “Vienna KaDeWe“ in line

with Signa’s announced plans for the current Leiner

location on the Mariahilfer Strasse. The opening

of the first inner city Ikea branch at the western

railway station is still dependent on the speed of

the termination of current rental contracts and

construction is, in any event, scheduled to begin this

year.

Even though the development of new locations has

dropped to an absolute minimum, the changes in

existing shopping centres and the major shopping

streets will be very visible. The Vienna market is

actively following the subsequent use of the newly

vacant spaces on the Kärntner Straße as well as on

the Mariahilfer Strasse (former BERSHKA, former

Forever 21). Large, long-standing branch networks

will continue to grow smaller (for example, the crisis-

ridden Vögele Group will close further branches)

and selected retailers will probably be forced to exit

the market. However, a number of newcomers have

been very active. HEMA, the Dutch department store

chain which first entered the Austrian market in

2017, plans to open at least two further branches in

Graz and the SCS by summer 2019, and the French

sport retailer Decathlon will add at least one further

location to its previously sole branch in Austria.

“Shopping centres must offer an

innovative experience to attract

customers over the long-term.“

In total, the competition between real estate

providers for the increasingly limited number

of strong, long-term tenants can be expected

to intensify. Good locations (excellent traffic

connections, attractive catchment area) will

no longer represent a sufficient condition for

sustainable success. The saying “location, location,

location“ will be gradually replaced by “concept,

concept, concept“. Shopping centres and shopping

streets must create the requirements for a colourful

offering to linger, they must offer an attractive

entertainment programme and – in line with the

“third place“ for social interaction (in addition to

home and the workplace) – actually fill these areas

with life.

Outlook

Outlook

18

Reference projects

EHL References

Consulting

NEMA Starnberg The owner of the land exclus-

ively commissioned EHL to

conduct a market study and

develop a retail strategy for

the planned shopping centre.

The first rental contracts have

already been signed.GLA 11,000 sqmLocation Starnberg Germany

© H

ans

Beig

el

Leasing

Scotch & Soda EHL brokered the second

sales space in Vienna to Dutch

retailer Scotch & Soda on Maria-hilfer Straße.

© E

HL

© E

HL

Zgonc EHL brokered a former LIDL

branch to DIY-retailer Zgonc.

HEMAEHL continues to support the

Dutch retailer HEMA after its

market entry in Austria and

brokered two more branches in

Graz and Linz.

© E

HL Action

EHL supports the discounter during

its further expansion Austria and has

brokered sales space in Bruck an

der Mur, G3 Gerasdorf and the EHL-

managed Stadtparkcenter in Spittal

an der Drau.

Market entries

Cheese & MoreEHL brought the Dutch deli-

catessen company Cheese &

More to Austria, brokered the

first retail space in Kärntner

Straße and supports Cheese

& More to set up its second

branch outside the Nether-

lands in Munich.GLA 50 sqmLocation 1010 Vienna

Asset Management

Retail park Knittelfeld The Kollibri Center in Knittelfeld

covers approx. 19,500 sqm. In

addition to Eurospar, the tenant

mix includes Fussl, Bipa, Deich-

mann, Takko and others. Many

of the 260 parking spaces are

covered and provide comfort-

able parking in any weather.

© L

LB Im

mo

KAG

GLA 6,300 sqmClient LLB Immo KAG

Euromarkt Kapfenberg The Euromarkt Kapfenberg

and the adjacent retail park

include approx. 14,000 sqm

of sales space. The shopping

centre benefits from its

convenient location directly

on the B116 motorway and its

diverse branch mix.

© L

LB Im

mo

KAG

GLA 14,000 sqmClient LLB Immo KAG

19

Valuation

DEZ InnsbruckThis shopping centre is located

in the southeast of Innsbruck

between the Amras district and

the Rossau commercial zone.

It offers directs connections to

the Inntal A12 Autobahn via the

Innsbruck-East junction at a

distance of roughly one km.GLA 32,600 sqmClient Financial service provider

© E

HL

© E

HL Merkur KittseeThe food market Merkur in Kitt-

see is situated at the B50 street

in Buinesspark Kittsee und was

opened in mid-2017.

GLA ca. 1,670 sqmClient Owner

Center Management

Columbus CenterSince January 2019 EHL took

over the Center and Property

Management for this well-

established shopping center

in the Favoriten district and is

exclusively commissioned with

brokering space.

© E

HL

GLA 15,500 sqmClient Institutional Investor

Stadtpark Center EHL manages the Stadtpark

Center in Spittal an der Drau

und is responsible for brokering

retail space. Recently the new

large tenant Action rented sales

space in Stadtpark Center.

© E

HL

GLA 14,100 sqmClient Institutional Investor

Investment

PittarelloEHL advised Upper Austrian

private investors on the

acquisition of the Pitarello-

grounds with a total of

10,000 sqm sales space in

SCS.

© E

HL

GLA 10,000 sqmClient Private investors

Kärntner Straße 12EHL brokered a commercial

buidling with a GLA of

3,500 sqm in Kärntner

Straße, one of Vienna‘s

prime locations, to private

investors.

© E

HL

GLA 3,500 sqmClient Private investors

EHL Gewerbeimmobilien GmbHPrinz-Eugen-Straße 8–10, 1040 Vienna | T +43-1-512 76 90 | office@ehl.at | www.ehl.at

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This report is a translation. In the event of doubt the German-language version is to be used.

The information and forecasts in this report are made without guarantee, warranty or liability.

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