Office Market Report Austria 2026

The office market facing new challenges

The Austrian office markets remain in a phase of transformation. Geopolitical uncertainties, cautious occupier behaviour and rising requirements for office space are shaping the development of the market.

The structural change in the Austrian office markets is continuing in 2026. Demand is increasingly concentrated on modern, energy-efficient and ESG-compliant space. Properties that no longer meet these requirements are increasingly losing their marketability and coming under growing letting pressure. In some cases, conversions offer an opportunity for repositioning.

Economic uncertainties are noticeably weighing on occupiers’ decision-making. Large-scale lettings are not materialising, the average size of space requests has decreased and letting processes are taking longer. However, the structural demand for space remains – expiring leases and operational requirements make location decisions unavoidable in the long term, so postponed deals are likely to return to the market in the medium term.

In this context, lease renewals are becoming increasingly important. Landlords are more willing to negotiate, as they do not want to lose existing tenants.

Supply is responding to subdued demand with pronounced restraint. Speculative construction starts remain the exception, with the vast majority of developers making project realisation conditional on sufficient pre-letting rates. New office space is therefore predominantly demand-driven, which counteracts an increase in vacancy rates but may lead to a shortage of modern space in the medium term.

Local private investors and family offices are particularly active outside Vienna, while international buyers are active in the federal capital, especially for larger tickets. Differences in purchase price expectations and the lack of core product are dampening transaction volume in the short term. However, with an expected revival of the letting market and yield compression likely to set in from 2027, investment activity in the office segment should pick up again.