In earlier days, the republic’s great economic affairs were negotiated here and many traditional businesses that had found themselves in financial distress were liquidated. Today, at Riemergasse in Vienna’s 1st district, it is still all about money – investors’ money, that is. On the one hand, in 2012, the luxury hotel chain Four Seasons Hotels and Resorts will open their doors for the first time in Vienna here at the former commercial court building at Riemergasse; at the same time and in addition to the first-class hotel project, ten premium luxury apartments are being developed inside the partially heritage-protected premises. A lucky find in real estate: New residential space inside the parameters of Vienna’s Ring Road is a rare commodity. The prices are accordingly steep: Future property owners will have to budget for 9,000 to 12,500 EUR per square metre. Eugen Otto, owner of the Austrian real estate company of the same name, is handling the development of the residential projects at Riemergasse: “Luxury apartments in Vienna’s inner city are not easily reproducible. In a period of two years, a mere 100 to 120 premium properties come onto the market in Vienna. This makes for assured price stability, even in times of crisis.” Andrea Mittermayr, luxury real estate expert at Spiegelfeld International, can only agree: “Even during the past year, the price level in Vienna’s inner city has not changed. Converted attics in top condition inside of Ring Road can still yield prices of 15,000 to 18,000 EUR per square metre.” According to Mittermayr, foreign investors in particular prefer to buy in Vienna’s inner city. Mittermayr: “Around St. Stephen’s Cathedral is the preferred zone for German and Swiss, but increasingly as well for Russian investors.” With that, Mittermayr also clears up a common preconception in the industry, since Russian buyers only absented themselves from the Viennese luxury property market for the first two quarters of 2009. Now, investors are back in the market and, according to Mittermayr, are also willing to pay top dollar for suitable objects.

Stable Market for Luxury Properties

Eugen Otto estimates the Austrian luxury real estate market to be worth between 100 and 150 million EUR – a value that has not changed in spite of the crisis. Otto: “Since the beginning of the crisis in the fall of 2008 up until approximately mid-2009, there was a slump in demand from potential buyers in Eastern Europe who had short-term liquidity issues. Since the summer of 2009 however, we have seen increased demand again from Russia. Demand from Austria has consistently been high.” Theo Poppmeier, Managing Director of CGT Immobilien, is also pleased with the high domestic demand. Just in October of 2009, he completed his luxury real estate project at Wittegasse in Vienna’s 13th district – a 15 million EUR project, converting a former monastery into 48 exclusive residential units. For this project, Poppmeier placed the utmost value on maintaining the historic structure. The efforts seem to have paid off since most of the apartments were already sold prior to completion. Poppmeier: “By spring of 2010, we will have developed another 26 apartments on the adjacent street of St. Veitgasse.” The majority of apartments were sold to buyers from Austria. This trend does not come as a surprise to Georg Spiegelfeld of Spiegelfeld International: “Today, the demand for premium real estate is firmly back in Austrian hands once again. Many wealthy Austrians are afraid of further turbulences on the financial markets and want to protect their savings in the safe haven of real estate.”

Price-Performance Ratio has to be Right Buyer behaviour however has changed: Customers, especially those from Austria and other German-speaking countries, are considering more options, take longer time to make decisions and often have very a specific vision that is not always easy to fulfil. A quiet, easily accessible location with optimal infrastructure in its immediate surroundings is still the most important selection criterion – but not the only one. Eugen Otto: “With such a high price per square metre, everything around the apartment has to be perfect as well. The building has to feature an accordingly spacious entrance, and the apartment itself has to be absolutely impeccable – in this field, buyers do not forgive even the smallest mistake.” Otto currently offers three state-of-the-art properties that meet these criteria. At Neutorgasse in Vienna’s 1st district, he is marketing a luxury property by Sparkassen Immobilien AG that offers 34 perfectly outfitted condominiums – one of the rare opportunities to acquire a newly constructed property inside the Gürtel Road perimeter. In the popular and trendy district of Neubau, he is offering converted attics and apartments with a garden plot in two old turn-of-the-century buildings, at Siebensterngasse; two further properties that – in this quality - are a rarity on the market. Peter Marschall, owner of the real estate agency of the same name that specializes in the sale of premium properties, also emphasizes this fact: “Customers have become more price-sensitive and only want to invest their money in first-class properties. While in the past, clients sometimes would turn a blind eye to lacking amenities in favour of a good location, great views or a suitable neighbourhood, today, they are no longer making compromises.”

Wanted: Unique Locations with an Exclusive Touch

Besides premium properties in the inner city, unique locations that convey certain exclusivity are also sought-after. Vienna-based Sans Souci Group specializes in such properties. In summer of last year, they opened Schlosspark Erzherzog Rainer in Vienna’s 4th district. A beautifully renovated apartment building from the year 1886, which features stately turn-of-the-century condominiums and luxury apartments in the converted attic with unobstructed views of Vienna, the inner courtyard holds a historic palace that was carefully restored, revitalized and partially converted into luxury apartments as well. Here, buyers can reside in a historic park landscape, which is an extremely rare find in Vienna’s inner-city area. A similarly unique living space is being offered by Sans Souci Group since late 2009 at Zirkusgasse in Vienna’s 2nd district. The historic former factory building of men’s fashion manufacturer Licona was comprehensively converted into the residential property “Fashion Corner”. The up to five metre high, columned halls of the wing facing the street were transformed into office and residential lofts, while the attic was converted into modern Sky Cubes with a stunning view of Vienna. The restored courtyard wing now houses innovative atrium buildings. Norbert L. Winkelmayer, Managing Director of Sans Souci Group: “Architectural variety accentuates modernity, contemporariness and openness – these aspects influenced the entire revitalization of Fashion Corner, while we also placed particularly great value on maintaining the existing structures, such as the columned halls.”

Living in Beethoven’s Garden

Property developer Seeste also wants to create unique residential experiences in Vienna’s noble 19th district. In cooperation with the federal real estate management company (Bundesimmobiliengesellschaft), they will have developed seven premium urban villas on a currently empty lot of 6,000 square metres at Zahnradbahnstraße by the end of 2010, which will feature 49 condominiums between 50 and 151 square metres in size, some of them with patios or gardens. The developers titled the project “Beethoven’s Garden” – not a too far-fetched name; after all, the great composer was a resident of the area for a long time, and it was here at the adjacent Schreiber Brook that he was inspired to write “Scene at the brook” for his Sixth Symphony. “Residents will appreciate the exclusivity of the location,” Michael Möstl, Chairman of the Board at Seeste, is certain. “Here, they will find the ideal combination of living in the city and having a unique range of relaxation and recreational activities.”

Converted Attics and Penthouses

Top locations and perfect embedment in the existing, mostly historic structures are also what makes two residential properties that Spiegelfeld is offering in the 19th district attractive. Both properties are converted attics and penthouses of a respectable size between 350 to 460 square metres that offer unobstructed views of Vienna. Andrea Mittermayr: “Properties such as these cannot be easily reproduced; therefore, they offer the exclusivity and uniqueness that the clients in the luxury segment so appreciate.” Real estate developer Karl Heinz Strauss also considers not easily reproducible living space the name of the game in the premium real estate business. Under the trademark “Living Space”, he has been developing and marketing luxury properties in and around Vienna for many years. In the fall of 2009, he completed two urban villas in quiet, green locations at Maulbertschgasse and Silbergasse in Vienna’s Döbling district. “Garden plots and garden-facing patios as well as the desirable location in the Cottage District make those properties especially attractive for discerning customers,” Strauss says. They are complemented by amenities at the highest level. Strauss: “Today, luxury properties cannot be sold at top prices without a spacious floor plan, light-flooded rooms, cooling ceilings, a heating system with individual thermostat control in each room, an alarm system as well as a video intercom system with integrated fingerprint scanner or a garage with motion detector. Customers are now also looking for perfect technological amenities.” Helfried Mück from Engel & Völkers Vienna can only confirm this trend. Even in popular districts, the luxury segment demands absolute top locations with plenty of green space and spacious patios including unobstructed panoramic views. At the location of Gießhübel by Vienna, Engel & Völkers are currently offering such a property - a spacious loft-style villa.

The Dream of a Castle

Engel & Völkers are revealing the second trend in the luxury real estate segment: Besides Vienna’s inner city and the Cottage Districts of the 18th, 19th, 13th and 23rd district, there is great demand for luxurious country homes and castles with plenty of land. “The demand is unabated, especially from Austrian clients,” says Fridolin Angerer, castle expert at Spiegelfeld International. But also in that segment of luxury real estate, the customers’ main focus is on the distinctiveness of the location. Other than standalone locations without immediate neighbours, properties that are on a higher elevation and not only feature a garden but meadows, forests and useable water sources as well as great panoramic views are highly sought-after. Angerer: “However, most buyers only tolerate a maximum distance to Vienna of one and a half hours.” According to Peter Marschall, the luxury property market generally remains stable in Austria, compared to that of many other countries. Marschall: “The market in Austria never overheated like that of Dubai or London. This is also why we don’t experience slumps now, but are instead holding at a stable, high price level.” [ CN ]