PROPERTY TAXATION

Store rental rates in decline

store-rental-rates-in-decline

Store rental rates continued to slide in the first quarter of the year in the most popular commercial areas of the Greek capital. Although a number of spaces in these areas have new tenants, and a few foreign retail chains have also leased space in Athens, most of the market appears to be opting for more conservative choices regarding property size and rental levels.

The latest quarterly survey by property service company Proprius showed that the above trend also affected Ermou Street, in the center of Athens: The average rental rate for stores close to Syntagma Square (the upper section of the street) declined to 250 euros per square meter, from €260/sq.m. in the last few months of 2020, and from €280/sq.m. at end-2019 – i.e. before the pandemic. This is a clear drop in rates on the country’s most popular shopping street, where rates had been rising up to the outbreak of the pandemic.

A similar decline was also recorded in the first quarter of the year in Kifissia, Glyfada, Piraeus and at Tsimiski Street in Thessaloniki: The average rental rate of stores in those districts comes to €110/sq.m., €125/sq.m., €75/sq.m. and €125/sq.m. respectively. At the same time, Proprius notes in its analysis, new lets have declined compared to the pre-pandemic period, although some demand does exist in the more popular spots.

Notably, that demand now concerns smaller stores, while fewer new chains are entering the market. In January-March 2021 the new tenants included Parex Shoes on Ermou (€110/sq.m), Kiko Milano in Glyfada (€155/sq.m) and a sports apparel company in a 210 sq.m. store.

Russian supermarket chain Mere opened new stores in Larissa, Tripoli and Thessaloniki upon its entry into the Greek market, targeting 80 stores by end-2021. Danish homeware chain Jysk opened its 42nd store in Argos. Intersport opened a store in Peristeri, Cosmos Sports in Nea Smyrni and Fixers secured a presence in Piraeus.

The activity recorded during that period, when most retail commerce was closed, was quite remarkable as chains position themselves for the post-pandemic era.