No more than 45,000 square meters of office space has been absorbed by the Attica market through new leases in the last couple of years, according to data compiled by Savills Hellas property services. This does not include existing contract renewals and renegotiations.
The above type of leases, which concern Class A and B autonomous office buildings, corresponds on average to just one-third of the equivalent volume of new rentals recorded in the period between 2004 and 2008, figures show. This is despite the fact that 2014 was the best year since the start of the financial crisis (from 2010 onward) in terms of market activity.
This is another sign of the considerable decline in business activity in the country as a result of the recession, with the office market adding 2014 to the previous five years of contraction, from 2009 to 2013, the main features of which were reduced demand and an increase in available office space.
Dimitris Manoussakis, managing director at Savills Hellas, notes that the increase in supply is not due to the delivery of new office space, as one might expect, but rather to the contraction of the business sector in general, which has seen the number of empty offices expand. Notably, approximately 10 percent of the office space in areas with a large concentration of such premises is empty these days.
The companies that are experiencing growth and wish to relocate to a new buildings are the luckiest, given that there is a multitude of availability at very attractive rental rates compared with the past. A Savills Hellas survey showed that the highest demand is for privileged offices in popular spots in Athens ranging between 1,000 and 3,000 sq.m.
“Nevertheless, owing to the absence of new office buildings constructed since 2010, it is not easy to find any major Class A offices, of the 5,000-sq.m.-or-more category, which is the typical choice of foreign property investors,” Manoussakis explains.
The decline recorded is particularly evident in the high-standard office market’s drop in Attica, as property prices have fallen by a total of 38.7 percent since the start of the crisis in the real estate market at end-2008, according to the official figures of the Bank of Greece. During the same period the drop in rental rates for offices in general has come to 36.5 percent.