Office rental rates for older properties and secondary locations have dropped by up to 40 percent in the last few years, according to Colliers International, one of the world’s largest brokers of office space.
The decline identified by Colliers in the rates of those second-choice offices has resulted in an increase in the gap between them and their top-rate counterparts, which are state-of-the-art spaces in privileged locations.
Colliers notes that the share of available spaces remains at steady levels for offices in privileged spots as demand is focused on them. As a result the company estimates that this behavior will eventually lead to the stabilization of rental rates as well.
Athens Economics, a property services company which is an alliance partner of international firm Jones Lang LaSalle, makes a similar estimate regarding the percentage of decline in office rental rates.
In a recently published analysis, following the constant drop in prices over the last five years, Athens Economics showed that rentals in and around the area of Kifissias Avenue in northern Athens would seldom exceed 13 euros per square meter on a monthly basis, while in the center of Athens the equivalent rate amounts to 21 euros/sq.m. (in the are around Syntagma Square). In the 2004-05 period, when prices around Kifissias peaked, rates were averaging 25 euros/sq.m.
Still, according to Jones Lang LaSalle, rental rates are approaching the completion of their downward cycle and are expected to bottom out in the next six to nine months, thereby paving the way for the market’s gradual rebound.