The Austrian real estate investment sector experienced a notable shift in activity throughout 2025. After a robust performance in the second quarter, the market entered a quieter phase during the summer months. The third quarter saw transaction volumes reach 526 million euros, reflecting a decrease of approximately 23 percent compared to the same period in the previous year. Despite this seasonal slowdown, the cumulative investment volume for the first nine months climbed to 2.04 billion euros, marking a six percent increase over 2024.

Market dynamics throughout the year have remained largely positive, with a significant number of transactions currently in advanced negotiation stages across all major asset categories. While not all deals are expected to close by year-end, projections indicate that the total investment volume for 2025 will be in line with previous years, estimated between 2.5 and 3 billion euros.

Key Transactions and Market Confidence

One of the most prominent deals during this period was the sale of Kaufhaus Tyrol in Innsbruck, underlining the potential for large-scale transactions even in a challenging economic environment. This transaction, among others, demonstrates continued investor confidence in Austria as a stable and attractive location for property investment.

Vienna Leads the Market

Vienna remains the dominant hub for real estate investment, accounting for around 77 percent of all transactions and a total volume of 1.6 billion euros, representing a nine percent increase year-on-year. The capital continues to attract the majority of both domestic and international investors due to its economic stability and appealing property landscape.

Residential Properties Remain in Demand

Residential real estate maintained its position as the leading asset class, with investments totaling 890 million euros and securing a 44 percent market share. Family offices and institutional investors from Germany, such as Catella and Quantum, were particularly active in this segment. Meanwhile, open-ended real estate funds were the most prominent sellers, and private investors, including family offices, accounted for roughly one-third of total acquisitions.

Retail and Hospitality Sectors Gain Momentum

Retail properties achieved a transaction volume of 330 million euros, claiming a 16 percent share of the market. This included several high-profile high-street properties in Vienna and retail parks. The hotel sector also saw increased activity, with 310 million euros invested, boosted by substantial deals like the sale of the Vienna Marriott Hotel. Additionally, several small to mid-sized hotels changed ownership, primarily to private buyers.

Office Sector Sees Cautious Approach

Office real estate transactions amounted to approximately 300 million euros during the third quarter. While a considerable number of office properties remain under negotiation, buyers have displayed a cautious approach, leading to slower deal closures compared to other sectors.

Renewed International Interest

International investors made a significant return to the Austrian real estate market, contributing to 32 percent of the total investment volume in the first three quarters. German investors led this group with 330 million euros, representing 16 percent of overall transactions. Domestic investors continued to dominate, accounting for 68 percent of activity.

The increasing activity of institutional German investors signals a broader trend of international market re-engagement not seen since 2022. Market analysts anticipate that this trend will persist in the coming quarters, as investor confidence continues to recover.

Stable Returns Across Asset Classes

Prime yields remained largely stable across the main asset categories during the third quarter of 2025. This follows a phase of yield compression that began at the end of 2024, which has now paused. However, there is still potential for modest yield decreases in the residential and hotel segments by year-end. As of the latest data, yields are reported at 4.75 percent for office properties, 4.70 percent for retail, 5.00 percent for logistics assets, and 5.30 percent for hotels under lease agreements. Residential property yields currently stand at 4.10 percent, a slight decline of ten basis points from the prior quarter.

Overall, Austria's real estate investment market is demonstrating resilience and renewed momentum, particularly with the reappearance of international capital and stable performance across core sectors.