The prospects of real estate market in 2021
The prospects of real estate market in 2021
  Residential  |  Office  |  Retail  |  Warehousing

The prospects of real estate market in 2021

Rents have been increased for warehouses that had also attracted REICs investment interest.
Eirini Theofanidou

During 2020, global and domestic real estate market conditions were fiercely affected by the coronavirus pandemic. The pandemic has lead in market imbalances in the labor, housing and retail markets.


According to Cerved Property Services in 2021, the market shall be based on three main pillars. The implementation of major development projects, the Recovery Fund that has favoured Greece a bit more than other EU member states and the digitization of real estate transfer procedures.

In particular, the housing market appears more resilient due to the new buildings that have a new "construction philosophy". In this market there is a demand mainly from Greeks with the tourist houses and small apartments intended for digital nomads and retirees.

Offices are adopting an hybrid model

An hybrid model, that seems to be adopted in office real estate sector, will be rebalancing the market. Cerved, in their analysis, point out that in 2020 52% of all employees in Europe worked remotely with the percentage reaching 80% for office workers in large capitals and the 5.4% e-working. In Greece, 7 out of 10 companies implemented the teleworking system last year, while at least half of them are expected to maintain it.

A strong blow in retail

The sector which, according to markert analysts, has received the hardest hit was that of retail. According to analysts, supermarkets and electronics stores saw their revenues increase by about 10% by 2020 and pharmacies by 4%. On the other hand, the turnover in jewelry stores fell by 48%, by 37.4% in cosmetics, by 30% in clothing, by 29% in footwear and by 32% in alcoholic beverages. Retail real estate transactions were limited and most took place in early 2020, with buyers mainly REICs. There is also a low volume of new leases, mainly from international chains (IKEA, Leroy, Jysk, Prenatal, Intersport, Decathlon), while the market is moving in the constellation of renegotiating rents with a provision for linking them to revenue.

Industrial real estate emerged to be a great survivor 

The only real estate sector in which havebeen observed rent increases and declining returns internationally, was the industrial real estate. The boom in e-commerce at a rate three times stronger than expected due to the pandemic and restrictive measures lead in a remarkable boost for warehouses and logistics. As the analysts explain, during the last three years the Greek market is maturing and following the international trends with the yields in our country being almost double and the selling prices in half of the respective European ones. Experts forsee significant potential in the sector to grow further with about 200.000 sqm of newly built warehouses in Attica in the two years 2000 - 2021. Increased mobility of domestic REIC which accumulate such properties in their portfolio. As the conclusion of the Pissaridis Commission says, "Greece can significantly strengthen its presence by making full use of its geographical position between three continents."