ARiadni Real Estate Blog

New data on store and commercial rentals-What the market expects

10 September, 2020

The real estate market is on hold, while so far the effects of the pandemic have not been reflected either in the first-class office buildings or in the shops located on the main shopping streets.

According to the latest report by the Danish real estate consulting firm, a member of the BNP Paribas Real Estate network, the coronavirus crisis has boosted demand for storage space, as it is essential as e-commerce grows.

The only real estate sector that is already experiencing the changes brought about by the pandemic is residential real estate as there has been a huge decline in transactions since the "disappearance" of Chinese apartment buyers aiming for the "Golden Visa". The huge drop in tourist traffic has also caused a decline in investment in apartments aimed at being used in short-term rental platforms such as Airbnb.

For the retail market, it is claimed that the effects of the pandemic will become apparent in the coming months, with the fall in consumer confidence and the shift to e-commerce accelerated due to quarantine. At present rental prices on the main shopping streets seem unaffected. In Ermou the rents range from 180 to 285 euros per square meter (sq.m.) per month, in Metaxa in Glyfada from 70 to 130 euros per sq.m. per month, in Kifissia from 80 to 120 euros per sq.m. per month and in Kolonaki from 60 to 90 euros per sq.m. the month.

The question is how long will the process of stabilizing the retail market as well as adapting to the new data of the coronavirus. Several landlords have already seen the government intervene and legislate a 40% reduction in rents in sectors that are severely affected by the end of the year.

Another question is what will happen to the malls where serious changes and bargains with the tenants are underway.

During the first half of the year, contracts worth 40 million euros were completed in quality office buildings, while areas totaling 82,000 square meters were leased. Danish analysts argue that the lack of quality office space, combined with the continued interest of investors (Greeks and foreigners) in the industry, is currently a shield against the pandemic.

During the crisis, the logistics industry is experiencing impressive growth, according to the Danish report, both in terms of sales and purchases. Here, too, the absence of first-class warehouses, at a time when demand has grown due to the growth of e-commerce, is driving demand. This year there was significant activity with new warehouse lease agreements, both for small areas (500 - 2000 sq.m.) on the outskirts of cities, and for large areas (over 10,000 sq.m.).

Aspropyrgos and Magoula remain in the spotlight of investors. At the same time, logistics companies are preparing new investments, which, in addition to warehouses, also include office space.

Fotis Kollias
fotisk2@euro2day.gr

euro2day.gr