Vacancy rates have decreased in Athens
The office market in Greece substantially contracted in the past due to constant pressures that the economy has been experiencing. This smaller market base has had positive effects. In 2017 the very best Grade A offices showed marginal increase in terms of rental levels compared to 2016, as an outcome of the reduction in supply. Lack of new development projects resulted in the take-up of existing quality stock coming with a marginally higher rent. Vacancy rates in the top three office locations in Athens have decreased over the last two years with both Grade A and B stock exhibiting an increasing take-up trend.
The overall office sector has been flat with low transaction volumes. Nonetheless the pricing situation is more settled. Rents in prime office locations have been stable ranging between €96 and €240/m²/year with incentives including prolonged escalation periods and rent free periods.
Investors are creating new value in existing properties
The improvement in conditions in the office market has also revitalized investment interest both in new developments and in the acquisition of properties with good tenants by institutional investors such as real estate investment companies. The market has been affected by the lack of suitable products, so the renewed interest prompted some interesting initiatives including refurbishment works, restructuration of old buildings and new constructions.
The two major real estate investment companies invested a total of €172.3m. in the domestic market during 2017: NBG Pangaea invested €71m. for the acquisition of two projects in big boxes (Hyper Market with commercial zones) while Grivalia acquired nine properties (office, hotels, Big Boxes) in excess of €101m.