Office Market Report Austria 2025

Office markets remain divided between opportunities and challenges

The polarisation is continuing on the Austrian office markets. Opportunities and challenges often go hand in hand – while the ESG-compliant office properties offer modern working environments, the need for investment in many older office buildings is growing and the space is becoming increasingly difficult to rent.

Demand remains temporarily subdued due to geopolitical and macroeconomic uncertainties. The manufacturing sector in particular is showing restraint in many places, as are large-scale lettings. Many space requests have shrunk in recent years, with the focus now on quality instead.

The predominantly demand-oriented construction activity on the office markets prevents a sharp increase in vacancy rates. Although there is an increasing amount of sublet space on the market in Vienna, Linz and Graz, the range of new construction options remains limited.

Developers are currently shying away from speculative construction projects, which is why new office space is only coming onto the market at a moderate pace. Meanwhile, the office vacancy rate in Vienna remains one of the lowest in Europe at less than 4%.

In return, office rents continue to rise, especially for top products. It is not only in Vienna that high developments in their respective submarkets will record new prime rents. In other state capitals, too, individual project developments are achieving maximum rents that are even higher than the reported prime rents.

Average rents, on the other hand, tend to be stable, with little potential for rent increases due to low demand, particularly in less well-connected locations.

The investment market reflects this dichotomy: private investors are the most active buyers and buy both core and value-add products, while institutional investors remain cautious and focus on portfolio adjustment. However, with the yield compression that has already begun, market activity in the office segment will also increase again, at least in the medium term.