Expert talk: Igor Strehl on the future of real estate investment in Austria, sustainability and innovation

Austria's robust real estate market is entering a transformative era. We sat down with Igor Strehl, a seasoned investor and founder of Dunaj Family Office Сonsulting, to explore the transformative trends shaping Austria's real estate market. With a growing emphasis on environmental, social, and governance (ESG) goals, Austria is at the forefront of integrating green building practices and cutting-edge technologies. Igor Strehl shares his insights on how these developments are driving the market forward, the practical benefits for investors and tenants, and the innovative projects like Aspern Smart City that exemplify this exciting shift towards a more sustainable and resilient future.

Each country, driven by distinct internal economic factors and regulatory frameworks, undergoes a unique path during this phase. Given this context, how might Austria's real estate market respond in the upcoming 2024? This article aims to provide insights and valuable information for individuals and potential investors looking to take part in Austria's residential and office markets.

- Hello, Mr. Strehl. Austria's real estate market is undergoing significant changes. Can you elaborate on what's driving this transformation?

Igor Strehl: Certainly. The primary drivers are the growing importance of ESG goals. Buildings in Europe account for 40% of total energy consumption and 36% of greenhouse gas emissions. As global climate concerns intensify, the Austrian real estate sector is adopting green building practices and technological innovations to meet these modern demands. Stricter regulations are playing a crucial role, aiming to reduce carbon footprints and enhance energy efficiency.

- How are these changes impacting investment in eco-friendly and tech-enhanced properties?

Igor Strehl: Investing in such properties brings numerous advantages, including lower operating costs, tax incentives, and potentially higher market valuations. Smart technologies offer enhanced energy management, improved security, and appeal to tech-savvy tenants, ensuring higher occupancy rates and better investment returns.

- How do sustainability and innovation work together in this sector?

Igor Strehl: Sustainability and innovation are synergistic forces. For instance, Austria excels in environmental patents related to passive house technology, waste and water management systems, renewable energy technology, and energy efficiency. Smart home systems further optimize energy use and provide a comfortable living environment. Together, these elements create more resilient, efficient, and valuable properties.

- Could you provide some examples of the practical benefits of these sustainable practices and innovations?

Igor Strehl: Absolutely. Passive houses, which follow a voluntary standard, can achieve up to 90% energy savings for heating and cooling compared to typical buildings due to superior insulation, airtight construction, and efficient heat recovery systems. Austria has developed over 14,000 projects in line with this standard. Properties with photovoltaic solar panels save about 20 cents per kWh, which translates to approximately 800 EUR in annual savings for an average household consuming 4000 kWh. Additionally, there are grants available to subsidize the costs of installing photovoltaic systems.

- Are there any particular examples that come to mind when talking about the integration of sustainability and innovation in Austrian real estate?

Igor Strehl: Aspern Smart City, Europe's largest and most innovative energy research project, is a prime example. Initiated in 2013, it leverages real data to explore future urban energy solutions. A core feature is the intelligent building energy management system (BEMS), which automates and optimizes energy use, storage, and transmission across entire communities. This system allows buildings to exchange information and supply each other with energy, significantly reducing CO2 emissions and operational costs.

- What specific benefits does Aspern Smart City bring to the table?

Igor Strehl: The smart residential buildings in Aspern save over 71%, or almost 240 tons, of CO2 emissions annually compared to conventional systems. The waste heat recovery system in the school and daycare center saves 195 MWh/year, equating to annual savings of about 10,000 euros. If 20% of Vienna’s buildings adopted similar technologies, it could generate an annual profit of 30 million euros for the city and its residents.

- How do these sustainable and tech-enhanced properties benefit investors?

Igor Strehl: Investing in these properties offers significant advantages such as lower operating costs due to energy-efficient technologies, government incentives, and subsidies that reduce initial costs. They often command higher market values and rental yields due to increasing demand from environmentally conscious buyers and tenants. This results in lower vacancy rates and enhanced tenant satisfaction, contributing to higher retention rates. These properties also align with broader environmental goals, improving investors' social responsibility profiles.

- In your opinion, what does the future hold for Austria's real estate market in terms of sustainability and innovation?

Igor Strehl: The future looks promising. Austria's focus on sustainability and innovation is setting new industry standards, promising greater efficiency, regulatory compliance, and enhanced property values. By continuing to embrace these practices, the Austrian real estate market will not only meet the demands of an environmentally conscious society but also secure its position as a leader in sustainable urban development.

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