According to the analysis provided by the company DANOS and was conducted during 2021, office markets in Athens and Thessaloniki maintained good performance indicators. "2021 was a year when modern office space came into the spotlight of investors and new projects continued to be announced."
Both the location of the properties and the amenities they offer were the two main levers of demand last year, while as analysts say, large-scale projects have been announced for the next period, which will change the office market as a whole.
Post-pandemic real estate companies have begun to adopt new strategies in the physical space, as the office will remain as they say important for businesses and employees, while tenants on the other hand will demand higher standards. "Demand for Class A office space remains high and many potential investors are focusing on this category of assets, as evidenced by recent transactions," says Danos. The Athens office market is still developing, trying to find its rhythm. Yields and rental values performed even better in 2021.
The investment profile remains the same, according to analysts, ie domestic REICs play an important role in transactions while multinationals seek to relocate to our country looking to future benefits. Yields for Class A offices in privileged locations stood at 6% to 6.5% while for Class B offices in privileged locations at 7% to 7.5%. Yields for minor locations stood at 8% to 8.5%.
According to Danos, 90,000 sqm of office space are currently under development with an average rent of € 18 / square meter.
In Thessaloniki, the increased demand for office space has stimulated construction activity with several developers being on the "hunt" for plots not only in the city center, in order to develop offices and renovate existing buildings.
As Danos points out, the west side of Thessaloniki seems more attractive for such developments, since it is difficult to find similar properties in the city center. On the east side of the city many new offices are expected to be developed within the next 3 years.
In the city center the rents range between € 9- € 16 / sq.m per month for the privileged areas and to € 6- € 11 / sq / month for the secondary roads. In Western Thessaloniki, an increased pipeline of works is in progress (especially on 26th of October Street) and new Grade A offices will be offered soon.
