Record volume of foreign trading. The Vienna Stock Exchange had a record-breaking year in 2016 and is well under way this year resulting in substantial developments in the construction real estate sector.
The Austrian money market has not exactly been spoiled by the politics in the past couple of years. The real estate investors as well as those in the stock market had to first experience the end of lucrative tax-free profits following the expiration of the speculation period. Then there was the introduction of a “penalty tax,” which was subsequently increased. However, despite the capital gains tax (KESt), it paid off to invest in the right shares last year. After 25 years the lead index ATX at the Vienna Stock Exchange was able to surpass its long-standing average performance of 6% by a considerable margin: an overall gain of about 10%, or 13.5% including dividends, which is also an all-time high for the stock exchange assignments (45) as well as a total volume of corporate bonds (7.28 billion Euros) were the highlights of the year. “The Vienna Stock Exchange is gaining international attention, which could be seen from the record volume of foreign trading,” notes Christoph Boschan, the CEO of the Vienna Stock Exchange AG, who also wants to expand this segment. The real estate ATX, which records the most liquid real estate shares on the Vienna Stock Exchange, gained around 5% excluding dividends last year. Some of real estate shares like those of Buwog and Conwert were able to show convincing double-digit percentage gains and Porr was in any case a highflier in the market branch.
The lobby group for the companies listed on the stock exchange consider it to be an obligation of the policy makers to strengthen the money market, because “nearly every tenth job is connected to the domestic companies listed on the stock exchange,” says Robert Ottel, CFO and Member of the Management Board of voestalpine AG. He has appealed to the government to give their support, because “the policy makers create the general framework which motivates domestic companies to use their equity capital for investment and innovation and furthermore makes it more attractive for foreign entrepreneurs to invest in Austria.” Our priorities, beside practice-orientated and efficient regulations of the capital market, must be the easing of the existing liability provisions and the reporting requirements as well as an end to discrimination concerning equity capital, maintains Ottel.
Every steadily expanding corporation needs equity funds - be they shares, bonds or even crowdinvesting. Especially the latter has gained a great deal of attention lately: although popular internationally for many years, it seems that Austria- as in many other areas - has slept through its development and then as a result of excessive bureaucracy as well as criticism from consumer protection groups, has nearly destroyed its reputation altogether. Nevertheless, since April 2015 there is an up-to-date regulation concerning alternative financing (Alternativfinanzierungsgesetz) for suppliers and consumers. As a result crowd investing providers have been popping up by leaps and bounds (or shooting up like the proverbial Austrian mushrooms after the rain). It has become one of the favourite methods in the real estate branch to both raise private funds for projects and at the same time take advantage of the low interest rates, which make banks more willing to donate money for real estate ventures. One must understand that crowdinvesting is not the same as crowdfunding, emphasises Tobias Leodolter, CMO of Rendity. “ We do not offer any highly- speculative deals, but calculated investment opportunities with limited risk in growing and stable real estate markets. Investors can participate in individual projects or build up widely diverse accounts by sharing in a combination of different types of properties.” With the help of crowdinvesting, projects with double-digit million Euros value have been financed and the trend are rising.