Low supply levels push Athens office prices up 3.2 pct

Prices on prime office space for sale in Athens jumped 3.2 percent in the first half of the year, versus gains of 0.7 percent in the previous six-month period, amidst low supply levels, data showed on Monday.

According to figures presented by the Bank of Greece, the country’s central bank, price gains in January to June this year were the highest since the first half of 2017 when the Greek economy was emerging from a ten-year crisis.

At a national level, office prices advanced 1.4 percent in the first half of the year, versus a dip of 0.1 percent in the second half of 2020.

With the Greek economy rebounding strongly in 2021, at a forecast pace of around 7 percent, market sources say that office space meeting the demands of multinational clients is hard to find.

Broker Proprius says in a report that occupiers were more active in the second quarter of the year than the first three months of the year, in terms of relocation searches, and that there is strengthening demand, particularly from international tenants.

“However take-up was anemic in the current quarter based on projections, reflecting occupiers’ cautiousness when making decisions relating to leasing and owner-occupation and the scarcity of prime offices on the supply side. However a more dynamic second half of the year with stronger take-up figures is expected,” the report said.

The pandemic may have cast doubt among many about the future of offices and remote working, though demand is strong in the Greek capital for sustainable office buildings, located next to public transport facilities.

According to an estimate from Arbitrage Real Estate and DCarbon earlier this year, the construction of more than 375,000 square meters of office space was in the pipeline for Athens. In the second half of last year, valuers Danos said that the number of office deals completed reached up to one billion euros despite the successive lockdown periods.

Most eyes are on logistics in the sector but when it comes to commercial real estate assets, the office market in Greece is drawing attention from a number of developers and global real estate players.

In Athens, the port area of Piraeus is a hot spot for office developments with new infrastructure projects in the area boosting its appeal.

In terms of sectors driving demand, pharmaceuticals and technology are at the top of the list.

“Development activity continues to rise with speculative schemes in all submarkets. Quality is still the key driver of demand which is coming mainly from the public sector, pharma and technology sectors. The highest level of office take-up was recorded in north East Athens. New decentralized clusters are being created driven by Hellinikon and other major development schemes in the pipeline,” adds Proprius.