Domestic real estate companies continue to deliver modern A-class spaces with the majority of them with "green" certifications as most companies adopt hybrid working or bring their employees back to physical office space.
In fact, according to a recent analysis by the company DANOS - In collaboration with BNP PARIBAS REAL ESTATE, the demand for such spaces remains quite strong. The said real estate industry maintains an optimistic forecast for the next five years, due to the growing national economy and the influx of new investors looking for assets that meet ESG criteria.
The protracted financial crisis of 2008-2017, analysts say, combined with the health crisis of 2020, has left an unmet demand for modern, energy-efficient office buildings on the market. This is due to reduced inventory of such space, while demand for older office space continues to vary significantly by location.
Athens remains one of the most affordable capitals in Europe for renting modern office space. This affordability, combined with significant investment in developing new, mostly green office buildings and upgrading parts of the existing stock, creates significant expectations for attracting foreign companies to locate their headquarters in the city.
The "green" stock in Athens is growing
According to DANOS data, 75% of rental contracts are for high-quality buildings, which usually offer quality facilities and high energy efficiency.
By the end of 2024, it is estimated that an additional 125,000 sq.m. will be added. in the existing green stock and by the end of 2026 it is predicted that an additional 210,000 sq.m. will have been developed.
The volume of investments in the sector stood at €58 million in the first quarter of 2024, with only one transaction involving an institutional investor, their cautious approach due to high interest rates. Most transactions were for self-employment purposes. Notable transactions were the sale of Cecil in the center of Kifissia to Laskaridis Shipping Company, the acquisition of a 1,681 m2 office building at 7 Irakleitou Street from Trastor and the purchase of a plot of land from Prodea REIC in Marousi.
Yields on prime roads were 5.7% to 6.5% while for minor roads 8% to 8.5%.
Thessaloniki as a prime destination
The office sector remains on an upward trajectory in Thessaloniki as well, with major projects changing the image of the city to a great extent. The demand for quality spaces is constantly increasing from both domestic and international companies such as Pfizer, Deloitte and Chubb.
Near the city center, at the western entrance of Thessaloniki on 26th of October street, a new Dimand/Prodea AEEAP project is set to open its doors next September. The HUB 26 project includes four buildings with shared two-level underground parking and ancillary spaces, covering a total area of approximately 31,000 sq.m. The total investment for this project is approximately €35 million.
Dimand and Black Sea Trade signed a contract for the sale of the Citrus office building. This bioclimatic office building, which will span approximately 5,170 sq.m. and will have LEED Gold certification, it will be built next to HUB 26. It will include office spaces, meeting rooms and an event hall, with a total investment of approximately €16 million.
At the same time, again the company led by Mr. Dimitris Andriopoulos in collaboration with Piraeus Bank is proceeding with the redevelopment of the FIX property. They have agreed to a bond loan of €100 million for this €160 million project which will cover approximately 50,000 sq.m. The redevelopment will transform the property into a mixed-use area that will include hotels, residences, offices, cultural venues, sports facilities, restaurants and shopping. The project is expected to be completed within 3-4 years, starting in early 2025. In addition, at the nearby Atrina Center, Kuehne Nagel has leased approximately 3,500 sq.m.
On the east side of the city, along Agricultural School Avenue, Epsilon Net has purchased a 7,200 m2 building, which will be completely renovated to house the Group's central services.
Another important project is underway in Thermi. In particular, Thermi Real Estate AE acquired significant assets from Piraeus Real Estate, which includes two buildings with a total area of 14,000 m2 on a plot of 12,000 m2 within the Municipality of Thermi. Each building has three floors and two basements reserved for parking spaces. The renovation is expected to be completed sometime in the first half of 2025.
Finally, according to Danos IWG is also looking to expand its operations in Thessaloniki, particularly in the eastern side of the city, due to the high demand for flexible co-working spaces.
