How important is the location of Vienna for the real estate developer Raiffeisen evolution?
As a project developer, there is no way around the location of Vienna. In the current economic situation, it has become apparent that – unlike many other comparable markets – Vienna has remained a very stable market. This is now benefitting all the developers who have invested in Vienna. However, the fact that businesses have become very careful and that the economic development is reducing the rental occupancy level is also showing in the Viennese market. Many landlords today have to offer tenants reductions in rent or affordable renovations in order to keep them in the location.
Does this also result in a decrease in construction contracts?
In Vienna, no existing construction site was abandoned due to the crisis; however, many projects where construction work had not yet commenced were put on hold. In many other countries, especially in Eastern and South-Eastern Europe, the situation is very different. In Kiev for example, there are dozens of unfinished buildings where work is not likely to be continued in the next few years. In Vienna, every construction project will be completed. However, new projects in the office sector will only happen with a suitable number of pre-rental agreements. Raiffeisen evolution is therefore predominantly focusing on residential buildings at the moment. There is increased demand in this area, since many private investors are banking on condominiums, either as an old-age security investment or for their own current needs, for example as a living space for their children or grandchildren. Austrians would simply rather invest in a solid apartment than in a risky financial product.
What criteria does a successful residential building in Vienna have to meet?
In addition to the location, preferably in the immediate vicinity of a metro station, clients now place great value on a high level of cost effectiveness. We are in the lucky position to have recently completed an eight-storey passive house in Vienna’s second district. To date, it is the tallest building of its kind on the market. All the apartments were sold prior to the completion of the construction work; for around half of the apartments, old-age security was the reason for the decision to purchase.
Does Raiffeisen evolution exclusively invest in condominiums, or do you also develop rental buildings?
We are focusing on the purchase market. Condominium clients have stricter criteria for a purchase than residential tenants, and we also do not build mixed-use objects such as a combination of residences and shopping, because future condominium owners would feel rather disturbed by this. A mix of offices and condominiums also eliminates itself, since condo owners want closed doors for maximum safety but offices want the exact opposite because of their customer traffic.
In which areas do you see the greatest opportunities for residential buildings of the future?
Besides the Green Building standards with lowest-possible heating and operating costs, we see demand emerging for barrier-free apartments. People’s life expectancy has increased, and they want to live within their own four walls for as long as possible. For this, however, buildings also need to be outfitted accordingly – for instance with wide doors, stair-free access to the building and apartments, as well as an orientation system that is comprehensible for visibility-impaired individuals.
Is Raiffeisen evolution also active in Eastern and South-Eastern Europe?
Due to their project volume, Hungary and Poland have individual departments, just like Austria. The other Eastern-European countries are combined into one department, but we have our own local branches in all the countries. Unlike many other developers, we adhere to the high Austrian quality standards in these countries because we want to remain active in those markets for the long term. Vienna serves as the know-how hub where the latest techniques are being developed. |
