Mixed signals in Greece’s office market in 2025

According to a recent analysis by Danos, a member of BNP Paribas Real Estate, demand for modern, high-specification and energy-efficient office space remained robust, while the limited pipeline of new developments continued to exert upward pressure on rents and capital values.

Leasing activity slowed during the first half of the year but gradually recovered in subsequent quarters. Overall, the market reflects a stabilising environment, with demand primarily driven by dynamic sectors such as technology, financial services, consulting and shared services. At the same time, the shift towards flexible workspaces is gaining further traction, with co-working schemes expanding in the post-pandemic landscape.

Shift towards quality assets

A defining feature of the market is the growing emphasis on quality characteristics, including energy efficiency, green certifications and proximity to transport infrastructure. These factors are reinforcing demand for Grade A assets, particularly in central and northern submarkets of Athens. Locations such as Syntagma, Kolonaki and Marousi continue to capture a significant share of demand, underscoring the critical role of location in office asset valuation.

In pricing terms, the market recorded moderate growth. Prime office rents in the city centre ranged between €29 and €31 per sq.m. per month, reaching up to €35 per sq.m. for top-tier specifications. Refurbished offices in older buildings were transacted at lower levels, typically between €20 and €25 per sq.m., remaining an attractive option for occupiers seeking a balance between cost and quality. Leasing activity in the third quarter reached 50,000 sq.m., despite a slight year-on-year decline. Prime rents remained stable, while conversions contributed to reducing vacancy levels in central areas.

Limited supply and low vacancy

Constrained new supply remains a key structural characteristic of the market. Total office stock in Athens stood at approximately 2.98 million sq.m. by mid-2025, with development activity remaining subdued. Vacancy rates hovered around 10%, slightly higher than in 2024, yet still relatively low by market standards—particularly for high-quality assets.

On the investment front, activity remained strong, supported by both domestic institutional investors and international capital. Investor focus continues to centre on sustainable assets with long-term value potential, while sizeable office portfolio transactions are also being recorded. In parallel, large-scale urban regeneration projects continue to attract investment interest and support market prospects.

The broader macroeconomic environment remains supportive, with the Greek economy projected to grow by approximately 2.3% in 2025. The absorption of European funds, fiscal stability and the increasing presence of international companies in Greece are reinforcing investor confidence and generating additional demand for modern office space.

Looking ahead to 2026, the outlook remains positive despite global uncertainties. The limited supply of modern office space is expected to continue underpinning values, while the shift towards “green” and bioclimatic buildings will serve as a key growth driver. However, rising construction costs and regulatory requirements may act as constraints on the pace of new development.

Overall, the Athens office market appears to be entering a phase of mature growth, where quality, sustainability and strategic location are the primary determinants of value.

The Thessaloniki office market

The Thessaloniki office market is undergoing a substantive transformation, gradually moving away from a fragmented and lower-quality stock base towards modern, institutional-grade assets. The rapid expansion of the technology and research & development (R&D) sectors is acting as a key demand driver, strengthening the city’s role as a regional hub for technology and professional services firms.

Demand remains strong and is concentrated בעיקר in high-specification office space, both in the city centre and in selected peripheral locations with strong accessibility. At the same time, the “flight to quality” trend is intensifying, with multinational corporations and major domestic companies relocating from older, energy-inefficient buildings to modern, larger and more energy-efficient premises, often under single-tenant occupancy structures.

This trend has led to a clear bifurcation of the market. On the one hand, secondary assets continue to exhibit elevated vacancy rates; on the other, modern Grade A offices face extremely limited availability, with vacancy rates falling below 5%. This highlights the pronounced imbalance between supply and demand for high-quality space.

Rental levels reflect this divergence. Prime office rents currently stand at approximately €15–17 per sq.m. per month, recording an annual increase of around 4.5%. In contrast, the broader market average remains significantly lower, at approximately €10.5 per sq.m., reflecting the large share of older and less competitive buildings within the total stock.

Meanwhile, the rise of flexible working models is boosting activity in the co-working segment, contributing to the absorption and upgrading of secondary assets, particularly in the city centre.

Overall vacancy in the market is estimated at 8%–9%; however, this figure does not fully capture the availability of quality space. For modern Grade A offices, effective vacancy is closer to 4.8%, underlining the shortage of suitable space and the need for new developments.

Yields at 7.25%–7.50%

The existing stock is largely characterised by smaller and older buildings requiring significant capital expenditure (CapEx) for upgrading. As a result, investor preference is increasingly shifting towards newly built or fully refurbished assets that meet contemporary sustainability and ESG (Environmental, Social and Governance) criteria.

Prime Grade A yields are currently estimated at 7.25%–7.50%, indicating a strong level of confidence in the long-term growth prospects of the market and the stability of institutional tenants.