As noted by the company, a closer examination of the distribution of investments across various sectors shows that hospitality has solidified its position as the most attractive investment sector, with a notable 100% year-on-year increase. Additionally, substantial growth is recorded in land transactions, bolstered by a €120 million acquisition in Elliniko.
Despite the apparent decline in investments in other sectors, this is primarily attributed to the allocation of two pre-contractual agreements in 2023: the sale of the 'Skyline Project' and the 'PWC Building.' Both definitive sale agreements were finalized in 2024. Moreover, Real Estate Investment Companies (REICs) are increasingly investing in land for the development of future projects, with the associated development costs not yet reflected in transaction volumes.
2024: A Year of Adaptation
2024 has been characterized as a year of transition, adaptability, and market resilience. In the commercial real estate sector, the trend towards investing in high-quality, prime assets—a trend that emerged during the pandemic—has continued to gain traction across all market segments. Despite the favorable macroeconomic environment, persistent challenges such as rising interest rates, inflationary pressures, and ongoing geopolitical tensions have continued to influence investment strategies and decision-making processes.
In the office space market, investors were particularly focused on the evolving dynamics of user demand and the long-term impact of flexible working arrangements, resulting in delayed investment decisions. Additionally, some capital shifted toward other real estate sectors, notably hospitality and residential, as investors sought diversification and new opportunities.
Domestic investors led the market in 2024, dominating the majority of transactions. These transactions primarily involved property acquisitions for either self-use or specific strategic purposes. Most REICs adopted a cautious, wait-and-see approach, and 2024 saw limited international investment outside the hospitality sector.
Optimistic Outlook for 2025
Looking ahead to 2025, the outlook is positive, with expectations for improved financing conditions and the potential resolution of key geopolitical conflicts. These factors are likely to drive a renewed wave of investment in commercial real estate. The robust performance of the leasing market in both Athens and Thessaloniki, coupled with enhanced transparency regarding tenant demand, is expected to accelerate decision-making processes and unlock further opportunities.
With favorable macroeconomic projections, growing business and consumer confidence, and anticipated interest rate reductions, a solid foundation is being laid for the upcoming year. Market activity is expected to vary across sectors, with trends closely aligned to evolving market dynamics, environmental factors, and technological advancements.
Lower capital costs are likely to facilitate an uptick in large-scale property acquisitions, compared to the previous year. Sustainability remains a critical concern for investors, tenants, and developers, shaping investment strategies and operational approaches. While the outlook remains largely optimistic, the market will continue to face challenges in 2025, including global disruptions, increased exposure to severe natural disasters, interest rate uncertainties, and geopolitical volatility.
