conwert Immobilien Invest AG is exploiting the attractive market environment in Vienna to launch a residential property campaign with an investment volume of around €100 million.
The Company plans to create more than 500 apartments with usable space of around 40,000 m² by the end of 2008 through attic conversions and new construction. The planned focus on high-quality residential units in inner-city locations means that available living space reserves in attics and existing infrastructures will be optimally utilized, allowing conwert to further expand its leading market position in the high-end city residential segment.
Strong demand driven by population growth and single households
Population growth in Vienna and the substantial increase in the number of single households mean that the city's residential property market is subject to high levels of demand. According to recent studies, Vienna's population is expected to increase by around 18% to just under 2 million by 2030. At the same time, the number of single households is rising steadily: while there were only 260,000 one-person households in Vienna in 1971, this figure is forecast to increase to around 485,000 by 2030, with more than 50% of all inhabitants of the city living alone by 2050. "These two factors mean that there is enormous pressure of demand on the Vienna residential property market. In the high-quality inner-city segment in particular, where it is no longer possible to create new living space at will, demand often outstrips supply several times over. As a result, there is an urgent need for additional residential space, particularly since this situation will only be exacerbated by demographic developments over the coming years," said Johann Kowar, Chairman of the Management Board, commenting on future challenges.
Despite this high demand, however, there is only a low level of new construction activity at present. Around 7,500 new apartments are currently completed in Vienna every year; adjusted for the demolition or combination of existing properties, net growth in the residential real estate market has amounted to a mere 5,000-6,000 apartments p.a. in recent times. By contrast, experts estimate that annual new production of between 8,000 and 10,000 apartments would be required in order to meet demand.
Rising prices due to increasingly short supply
Rents and prices for owner-occupied apartments have already risen sharply in response to the increasingly short supply. The current real estate price tables for Vienna show average year-on-year growth of 3.7% for rented accommodation, while growth rates for used owner-occupied properties are in excess of 8%. "In the inner-city segment in particular, we expect the prevailing conditions which are characterized by long-term factors to lead to further price increases in future," explained Andreas Nittel, member of conwert's Management Board.
conwert's residential property campaign: 500 high-quality apartments
As Vienna's leading development company for older buildings, conwert intends to exploit this attractive market environment by investing around €100 million in the construction of new apartments between now and the end of 2008 as part of its residential property campaign. The Company plans to create more than 500 apartments with total usable space of around 40,000 m². According to conwert CEO Johann Kowar, the campaign will reflect the Company's strategy by focusing on "high-quality, inner-city properties. On the one hand, we will perform attic conversions, which are a logical way of increasing the amount of available living space in the inner city. At the same time, we also intend to intensify our new construction activities at top locations. This will help to further expand our market leadership in the high-quality city residential segment."
conwert will significantly reinforce its new construction activities over the coming years in order to exploit the high levels of demand for residential real estate. It intends to construct a total of
