Download the residential market is livening up

trends & insights
ISSUE 01 | 2016
THE RESIDENTIAL MARKET IS LIVENING UP
People always need somewhere to live, the only question is, where? While efficiencies were
still sneered at just a few years ago, small, self-contained flats and short-let concepts
are now making a comeback.
The formula couldn’t be simpler: moving
into the cities plus a growing range of different lifestyles minus space and properties equals new ways of living. Translated
into real projects, this means for example microflats, boarding houses or service
apartments. The layouts are intelligently
optimised, with the emphasis on functions over floorspace. Everything you need
for living is there, and there is virtually no
empty space, like hallways etc. A kitchen
area is sufficient, since people either cook
together in the shared commercial-standard kitchen or meet friends and colleagues
in one of the local restaurants and cafes.
People who live in microflats want to live
life to the full, but still need an affordable
flat, which is why they happily do without
unnecessary features. Meanwhile, boarding houses are increasingly replacing the
classic hotel. We are seeing new lifestyles
here, new housing options emerging, asset classes which have just recently begun to establish themselves.
First, we need to distinguish between
three major concepts: microflats, service
flats and boarding houses. There are still
any number of terms for these, but es-
sentially they come down to these three
categories.
Microflats are furnished or unfurnished
small flats which can be compared as a
classic real estate investment with the
purchase of an investment property with a
surface area of around 30-60 sq. m. They
can be modest, offering cheap accommodation as an efficiency, or a cool and modern home to a new generation which rates
a high-speed WLAN above a letterbox by
the front door.
“Service flats by contrast are primarily one
and two room flats services and managed
by a management company,” architect
Josef Weichenberger explains, going on
to say that a boarding house is comparable with a service flat, in that both offer
short-term accommodation and are commercially operated. Small, highly efficient
short-term lets are an alternative to a hotel, rented or purchased by major companies for transient staff and expats, or offer
a transitional solution after a divorce, between removals or when changing careers.
They are centrally located, with good public transport and road connections.
“The quality of links with supraregional
transport – motorway, rail and airports – is
a strategic factor,” Weichenberger notes,
going on to distinguish further: “Legally,
the microflat is more like the classic condo, while the two other types come more
under the category of commercial accommodation.” With all these models it is essential to comply with the provisions of
the building and commercial codes, as
well as the guidelines on accommodation,
which can vary from one federal state to
another. All of them are subject in Austria to the definitions of their categories
which are specific to the individual federal states. Other provisions, such as those
on fire protection, are uniform across the
country, and available in e.g. the OIB
Guidelines.
As far as size is concerned, there are certain values which have proved helpful in
practice, with a range between 25 and 60
sq. m. of usable floor space. If the property is exclusively for residential use, this
is defined as at least 30 sq. m. in Vienna,
for example. Minimum sizes for rooms for
accommodation are again set by the individual federal states.
Foreword
PETER ULM, BOARD CHAIRMAN OF 6B47 REAL ESTATE INVESTORS AG
One of the biggest ways the ‘New World of
Work’ is making itself felt is in housing,
rather than office buildings. The office market in Austria is currently at the lower end of the curve: there
has never been so little new floor space coming on the market,
and in 2018 there will actually be an excess of supply. While
the market trend here is still following classic cyclical models,
this is not the case in the residential segment, where the combination of the inflow of population and the change in lifestyles is
having very specific effects on the product design of buildings.
The target group for short-term lets is growing steadily. Companies want to increase their flexibility in assigning staff to
different locations, housing them in a combination of hotel
and flat. Career entrants, new arrivals in the city, weekend
commuters or people who want the convenience of a concierge
service are all looking for new ways of living.
This is why we’ve pulled together the most important new trends
in living for you in this issue of Trends & Insights. I hope you
enjoy it!
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trend and countertrend
Let‘s be quite clear: short-term lets and microflats aren’t the
be-all and end-all, they’re one of many ways of living for the
future. We can say that demand for more specific concepts
for living is rising. However, the general public is strikingly
conservative, as the the report „Real Estate Trends” that‘s
just appeared from EY consultants explains:
“Owner-occupied beats rented, smart home isn’t an issue
just now. The so-called digital occupiers, who are allegedly
unlike their parents in rating meaningfulness and happiness
above money and status, are still virtually identical with
their parents when it comes to their dream home. The only
current trend which is really finding favour relates to the
sustainability of the housing in question. Otherwise, traditional ideas dominate.
From the point of view of the real estate industry (and the
economy generally), the result is entirely positive, particularly with regard to the desire to own your home. The real
estate share is likely to continue to rise. The survey included
INVESTMENT
“Real estate investments are increasingly
valued on the yield-risk profile, which
can be minimised for the types of use of
the properties, their industry focus, the
location, the individual tenants and the
term structure of the leases. If these factors are right, the investments retain their
appeal, which is why there is a constant
stream of new asset classes for real estate
investments. These are special properties
designed for precisely defined uses,” according to Ernst Hubert von Michaelis of
PROMOS consult, writing in the trade paper The Property Post, who sees private
investors and closed funds as the main
investors for this segment.
Whether these are flats with our without
service, for limited lets or open – the
increased supply shows one thing: traditional forms of living are increasingly
being supplemented by new ideas. This
is also apparent in other trends, such
as the increased appearance of housing
groups who act autonomously to make
their interests become reality as real
estate. Michael Ludwig, Vienna Executive City Councillor for Housing, Housing
Construction and Urban Renewal, neatly
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some 1,650 students and employed persons with an average
age of 27. They currently live in 85 sq. m. in an average 2-3
person household.”
A survey carried out by Meinungsraum market research
in Austria in 2015 also shows the conventional desires of
young people. In 25 years, 64% want to live in their own
home, with only 31% wanting to rent. Over half the respondents want to live in the country, 37% in the city.
The survey shows an apparent contrast with current urbanisation, which all future researchers see as a decisive megatrend.
While the trend towards urbanisation is less threatening at
home than in the emerging nations, everybody is seeing a
move to the cities. Wherever Austrians finally end up, they
currently spend around 22% of household income on housing,
according to another study by the Österreichischen Verbandes
der Immobilienwirtschaft (Austrian Real Estate Industry Association – ÖVI). Currently, 43% of respondents live in rented
housing, 40% are owner-occupiers (house or flat).
described the trend towards designing
flats which are small but functional as
“smart apartments” years ago. Internationally, there are marvellous examples of
efficient – or, more accurately, sufficient
– construction.
ers earning less than the equivalent of
EUR 90,000. The same goes for a resale.
The user also has to work in the city district where the flat is located, or had to
live there before buying. The project is
also financed through crowdfunding.
The innovative company Pocket Living
builds mini-flats in good London locations designed for young people at the
start of their career. The layout and details are brilliantly conceived to seem
positively spacious at 38 sq. m. A builtin closet in the hallway that even holds a
bicycle, living room, bedroom, hall, bath
– everything is unobtrusive, there are no
tight spots anywhere, and the ceilings are
actually higher than usual in London. In
addition there is underfloor heating, fulllength windows, a shower instead of a
bath, and no underground car park.
“We have to find ways of making more
efficient use of existing space. A flat
that’s 30 sq. m. can give you sufficient
space if every corner is cleverly used,”
explains architect Van Bo Le-Mentzel in
the periodical Business Punk. He created such a flat in Berlin without partition walls, where functions like living and
sleeping are separated by mezzanine levels on pillars, which also create storage
space. “Our buildings are rigid, inflexible. Currently, they’re primarily made of
reinforced concrete. This means they’re
very complicated to manufacture, then
they’re inflexible if we want to change or
modernise them, so that it‘s better to tear
them down and build from scratch,” says
Le-Mentzel in the periodical.
The idea is to provide flats for the target group of people who work, but don’t
spend their leisure at home, who get out,
meet friends, experience life in the city.
Demand for the flats is enormous, in
2015 there were 21,000 applicants on
the waiting list. What does it cost? Between EUR 200,000 and EUR 300,000.
Purchasers are limited to first-time own-
One factor which will have a stronger
effect on how we live in future is the
changing world of work. Instead of colourful couches and table football in the
office, the focus now is on increasing
mobility. A resourceful Viennese management consulting firm, for example,
has moved its accounts department to
a district capital in Lower Austria. Most
of the employees lived there anyway, as
they were recruited from the local commercial college. A few years later, most
of them want to start a family, and didn’t
necessarily want to commute to Vienna
every day. The firm accordingly rented an
economical office building in the town,
the data flashes securely to head office
in Vienna First District through the optical fibre infrastructure, and once a week
everyone gets together in Vienna. Win-win
for everybody.
BUSINESS COMMUNITY AS LIFESTYLE
Others clearly want to combine work and
private life even more closely. The concept is called co-living, where innovative knowledge workers want to work on
projects together or alone, and also live
together.
“Ideas spark faster between muesli and
toast and marmalade than the coffee
brews,” is the slogan on the website of
Coliving Hamburg. The idea was pioneered by combinations of living, think-
ing, leisure and working in the start-up
scene in Silicon Valley and San Francisco, such as Rainbow Mansion, The
Glint or The Embassy. Here, it‘s no longer
a question of rooms but of the mind-set
of the community members, good mood,
sharing ideas and helping each other.
The American co-working giant Wework
is currently testing the concept in Wall
Street, and if it succeeds a global rollout is planned. In Europe there‘s already
a co-living community established in
Stockholm, called Nest. Zoku is a hotel
in Amsterdam which offers casual community rooms for coworking instead of
anonymous rooms, with a strikingly wide
choice of sleeping accommodation, from
rooms with multiple beds to a loft which
has a king-size bed, full kitchen and
regular bathroom, despite having only 24
sq. m. of floor space. Sliding doors and a
stairway which vanishes into a cupboard
when it‘s not needed save space.
One thing most of these projects have in
common is that they’re ideal concepts
for repurposing old office buildings, barracks, dilapidated properties which would
otherwise stay empty. An opportunity, in
fact, to create new urban quality of living
through innovation.
Everything you need in just 24 sq. m.: at the Zoku loft in Amsterdam,
the stairs vanish into the cupboards.
Interview
Anett
Gregorius
In 1999 Annett Gregorius formed
Boardinghouse Consulting. She
estimates that there are around
480 buildings in Germany currently which are operated on the
service flats concept, or around
24,000 units. Just over 10% of
the flats are operated by international brands.
Are boarding houses or service
flats cheaper than a hotel?
Gregorius: This alternative is primarily attractive for companies,
as they can save up to 30% of the
cost of extended stays.
So this form is primarily interesting for business travellers?
Gregorius: Yes. The share of corporate customers in the industry
has been constant for years at
around 70%. But thanks to their
increased familiarity, service
apartments are becoming more
and more attractive for private
travellers as well.
What‘s the difference between a
boarding house and an apartment
hotel?
Gregorius: The key distinction
is the level of service. A classic boarding house has a limited range of services tailored
specifically for long-stay guests.
Apartment hotels on the other
hand offer many more services,
depending on the concept, such
as breakfast service, a (small)
fitness and wellness area, and
the reception desk is generally
staffed round the clock.
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PARK FLATS 23
LIVING BY THE LIESING
ALTHAN
NEw DIVERSITY IN VIENNA
The flair of this residential block lies in the variety of individual
types of housing, ranging from cleverly laid-out two-room flats to
three-story terrace houses with gardens. Overall, this is creating
around 11,000 sq. m. of privately-financed living space in the
desirable Liesing district, grouped around a landscaped inner
courtyard. The ground floor houses an entertainment centre, the
underground car park has enough spaces, public transport users
are just a few steps along the Liesing from the railway station,
which also has connections with local services etc. The parklike area in front of Park Flats 23 creates an oasis of greenery
directly in front of the doors. Selling has already started for the
flats by the Liesing.
Urban metamorphosis in Vienna’s Ninth District. The Althan project is an impressive demonstration of how to turn old buildings
into cool, intelligent and sustainable living space. The basic
parameters are naturally sound (optimal infrastructure, transportation links, inner city location etc), the unusual architecture
and elevated site offer impressive views over Vienna. There is
a range of living formats, from loft studios through single flats
to family housing – all notable for their intelligent floor plans
and high-quality fittings, such as underfloor heating, parquet
flooring and floor-to-ceiling windows. Marketing of the flats has
already started, and they will probably be ready for occupation
at end-2017.
THE 6B47 GERMANY GMBH MANAGEMENT TRIo
Fred Schelenz (COO) and Anton Thomas Schöpkens (CFO)
joined the management team of 6B47 Germany GmbH at the
start of 2016. The Düsseldorf real estate development firm also
has a new CEO, project development and real estate management specialist Kai-Uwe Ludwig. An MBA, Ludwig started his
professional career with PWC in Munich, before going to the
Schörghuber group of companies, where he rose to the position
of MD at Bayerischer Hausbau. Architect and real estate economist Fred Schelenz is responsible for operating business. CFO
Thomas Schöpkens joined management in November 2015,
after coordinating the sale of the Vitus Group to Deutsche
Annington (among other projects).
Fred Schelenz, Kai-Uwe Ludwig, Anton Thomas Schöpkens (from left to right)
6B47 Real Estate Investors AG
Heiligenstädter Lände 29/4 • 1190 Vienna
Tel: +43-1-350 10 10-0 • Fax: +43-1-350 10 10-50
E-Mail: [email protected] • www.6B47.com
Handelsgericht Wien • FN 337678 k • UID: ATU68629512
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