Athens | Greece

The Athenian real estate market is close to turning the page after five years in deep recession. In the near future, scheduled urban regeneration both in the CBD and the south water front will spearhead the effort to ameliorate the image of Athens. Tourism has long been proclaimed the locomotive of the renaissance, but the logistics sector may be the hidden ace of the Greek capital.

Anastasios71© Anastasios71©


The Greek economy is showing signs of stabilization after a long period of general market instability, difficulty in obtaining leverage from the Greek banks, high borrowing rates, unfavorable and unsteady tax environment. Fortunately, the risk of exiting Eurozone is diminished. According to official statements, the Greek economy hopes to return to positive growth rates in the forthcoming year. Nevertheless, the sharp decline of business activity and consequently, of domestic purchasing power hit gravely all real estate sectors and especially the retail market.


During 2013 and especially in Q4, investment activity was atypical compared to previous years. In October 2013, the Greek State sold 28 Government Buildings (19 of them in Athens) to the two major domestic REITS (Pangaia and Eurobank Properties) for €261.31 million and it will lease them back for 20 years. This transaction was the biggest sale and leaseback deal ever registered in Greece. The remainder of the activity was limited transactions by domestic investors, especially in the retail sector, such as the one concerning a prime retail listed building of 887 m², at a price of €5.9 million. The biggest inflow of foreign capital was achieved by the sale of a vacant 6,000 m² prime office building on Bassilisis Sofias Av. (ex-BNP Paribas headquarters) for €10.3 million to Grupo Dolphin/Pampa Energia. Ιn the near future, the main volume of transactions is expected from properties auctioned by the Hellenic Republic Asset Development fund.

Athens View (Medium) Athens©Solum Property Solutions


The office market in Athens is highly concentrated; prime market is observed in the CBD and along the Mesogeion, Kifissias and Siggrou Avenues. The majority of modern, fully equipped office spaces are located in the northern suburbs (Kifissia, Amarousion, Xalandri). On the one hand, prime rent levels and vacancy rates are currently relatively stable, albeit at very low levels, as relocation to prime offices is feasible for businesses that manage to survive. On the other hand, secondary office markets are merely heading to extinction. Moreover, deductions on current rents and incentives by landlords are practically the norm. Due to declining demand and limited financing, there is no development in the pipeline. Nowadays, a new trend of sustainable projects is emerging; former industrial or listed buildings are renovated and reused as co-working spaces.


The domestic buying power is continuously declining, as a result of endless austerity measures and the unemployment rate levels sky-rocketing. In this unprecedented turmoil, the retail market struggles to survive. The general picture of street retailing is disheartening even in the main high streets of the capital; frequent renegotiation of rent levels and lease conditions, incentives offered by landlords, rising vacancy rates and development limited in scarce refurbishments are the daily routine. Nevertheless, this situation has given international as well as major domestic retailers, the opportunity to get better positioning in prime market locations and expand their store network. In some occasions, tenants are just paying turnover rent and no base rent. The move from secondary to prime locations is also observed in the street retail market. As a result, secondary location vacancy rates average up to 30%, double the ones observed in prime market. After the recession is over, the undisputed winners will be shopping centers and retail parks, which succeed in preserving their turnover while boosting their consumer traffic.

The Mall Athens©Lamda Development The Mall Athens©Lamda Development

The major project in the pipeline is the 15,000 m² expansion of Golden Hall (re-use of an adjacent existing building), which will be a €20 million investment, including extra retail space, a family entertainment center and an Olympic Games Museum, which is expected to be operative by the end of 2014. All the other projects (Academy gardens by MGPA, Galatsi Olympic Hall by Charagionis Group and the project of Babis Vovos at Votanikos) are put on hold for various reasons. Finally, no new significant retailer entered the market recently.


The industrial and logistics sectors are concentrated mainly on the outskirts of the city, in the north and the south-west, near the Piraeus port. While the industrial sector is currently frozen, logistics has good reasons to be optimistic. A mini Chinese “invasion” in Piraeus aspires to convert the main port of Athens to an alternative logistic gateway to the EMEA region, revitalizing the logistics sector in the southern and south-western outskirts of the city. The catalyst in the promotion of Athens as a combined transportation hub was the recent railway connection of Piraeus port with the national railway system. The pioneer in the logistics sector is COSCO which manages two Container Terminals in Piraeus port. Furthermore, ZTE, the fourth telecommunication corporation worldwide, has announced the construction of a new logistics center in Piraeus. The works are expected to start at the beginning of 2014.

ipiraeu001p4 Piraeus Port©Solum Property Solutions


During 2013, hotel occupancy and RevPar indices in Athens have been positive for the first time in six years. Athens aims to be ranked among the “city break” European destinations. Ambitions are expected to be boosted by extensive urban regeneration projects in the near future, such as the pedestrianization of Panepistimiou Str. in the heart of the CBD and the redevelopment of the south water front. However, the group of big players in the hotel market (Starwood, InterContinental, Hilton, Divani, Sofitel) will be reduced by one member, as Μarriott Ιnternational is planning to withdraw from Athens.

Moreover, the project pipeline remains nearly empty, as the only project scheduled is the €3.5 million refurbishment of President Hotel. Nevertheless, the biggest deal ever in the Greek hotel market is expected in the Q2 of 2014. Rumours say that about €250 million will be spent in the auction of “Asteras Vouliagmenis”. The property is located in a small peninsula in the south of Athens and is owned partially by the Greek State and the National Bank of Greece. It consists of 304,000 m² of land (112,000 m² with development potential) and a five-star hotel. The bidders will include major international and domestic investors (for instance US fund Colony Capital, Hines, ICI, Russian Strategic Initiative, Charterworld, the hedge fund Baupost and domestic Lamda Developments).

Lampsa Hellenic Hotels SA©Hotel Grande Bretagne Lampsa Hellenic Hotels SA©Hotel Grande Bretagne

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