By Nikos Roussanoglou
The store rental market in Athens and Thessaloniki is still suffering despite the considerable drop in leasing rates, which in some cases exceeds 60 percent compared to the period before the financial crisis. However, according to a recent report by chartered surveyors GLP Values, the first positive signs have started to appear, mainly in terms of demand, as commercial activity in certain sectors has begun to improve.
the end of 2013 the average rental rate in the center of Athens, and particularly on Ermou Street, came to 175 euros per square meter, while in other key shopping districts in the capital it dropped below 90 euros/sq.m., with the exception of Glyfada, as on Ioannou Metaxa Street rates exceeded 100 euros/sq.m.
These markets are now presenting a comparatively improved picture as demand for store space – mostly small and medium-sized outlets – has been rekindled. GLP Values points to the proliferation of catering stores in Glyfada, where demand exceeds supply. Similarly, the capital’s secondary shopping areas, particularly in the city center where rental rates have dropped considerably, are seeing strong demand too, while the ongoing merging of banks will free up a number of prime positions.
At shopping malls, the average lease rates for surface areas in excess of 100 sq.m. average 35 to 70 euros/sq.m., while for smaller spaces they range between 65 and 90 euros/sq.m. Obviously the more successful a mall is the higher its rental rates are, but it is clear that a good mix of space usage and size management has helped malls to ride out the long recession and the effects of shrinking disposable incomes.
The surveyors’ analysis further found that while most commercial sectors, and particularly those of clothing and shoes, have been damaged significantly and many stores have shut down, they are being replaced by new ones in sectors which before the crisis wouldn’t even contemplate prime locations in the capital or the country’s other major cities. For instance, bakeries and pastry chains have swarmed popular shopping streets, taking advantage of consumers’ swing toward cheaper food options as well as the slide in rental rates in central districts.
For instance, last year snack chain Grigoris opened 16 new outlets across Greece and three new bakeries, in Vyronas and Ano Liosia in Athens and on Naxos island. The company intends to expand its branch network further this year with 20 new shops. Another example is the Venetis 1948 bakery chain, which has invested 3 million euros in a big new outlet in a neoclassical building on Omonia Square with a surface area of 1,200 sq.m.
Thessaloniki witnessed plenty of activity in the retail sector during the first half of 2013, with new stores opening in spots that had stood empty for a long time, while a number of multinational firms are now looking into opening branches in the city center.
Rental rates are continuing to fall in Greece’s second-largest city, while the number of available spaces is on the rise. Tsimiski Street still enjoys the most activity, while its rental rates have remained at the high level of 80-100 euros/sq.m. By contrast, on Mitropoleos Street and the lower part of Egnatia as well as at Aghia Sofia, rates range between 50 and 60 euros/sq.m. On the upper part of Egnatia and on Adrianoupoleos Street rates are as low as 15 to 30 euros/sq.m.