Low office and retail yields in Vienna justified for now

A surge in Austrian property investment has helped to drive Vienna office and retail yields to record lows. These yields will not be sustainable once interest rates and bond yields normalise. But given how well occupier markets have performed since the credit crunch, and the above-average prospects for the Austrian economy, it is hard to make a compelling case that office and retail property in Vienna is materially overpriced for the prevailing economic conditions.