ECONOMY

The day after for realty

With the Olympic Games now being consigned to history, Athens 2004, the organizers, will soon begin turning over large areas of office and storage space to other uses. These include, notably, about 10 hectares of office space and 25 hectares of storage areas of the Main Press Center (MPC) and the International Broadcasting Center (IBC). Real estate specialists are now beginning to consider the possible effect of the addition of such facilities to the market. «I consider that the need for large areas of office space of modern specifications in the Greek market will contribute to the smooth absorption of supply. Of course, it would be appropriate not to resort to generalizations but to deal with and comment on each property separately. We believe that the public sector will absorb a large part of the installations, relinquishing second-rate office space. As regards storage space, a considerable part of the new supply has been rented out in advance, while the existing demand can absorb the additions,» says Niki Sympoura, managing director of Cushman & Wakefield Hellas. «The significant impact of the Olympics on the non-residential property market lies in the change of the map which the new infrastructure creates, with the road and rail networks forming new markets along Attiki Odos and the national highway. These new additions, with large open areas and good accessibility, represent a substantial and very important change, as the geography of the market was strictly delineated until a few years ago. As a result, I believe that the new supply of such large properties is an event of secondary importance and will have a limited effect on rents, at least for good space,» Sympoura continues. According to international company reports, the Greek office space market has recently tended to stabilize as regards rates, even though it shows considerable differentiation. Demand is mainly focused on large spaces, while construction quality is now taking precedence over location. By contrast, Sympoura notes, demand is falling for small, fragmented spaces in older buildings that need refurbishing. «If the scenarios according to which large public agencies and ministries will occupy a large part of the previous Olympic facilities (for instance, there is talk of the Finance Ministry moving to the MPC), then the supply will easily and quickly be absorbed. However, in this way the problem will be shifted to the older properties nearer the city center, where the market is rather problematic and facing low demand. But again, this gives an opportunity for a substantial upgrading of these buildings which had to be done at some point,» she says. Apart from the public sector, which has traditionally being the steam engine in office space development, the demand by multinational companies is currently estimated at about 5 hectares, according to Sympoura. Of the approximately 25 hectares of storage area which Athens 2004 will relinquish, about 5.4 hectares has already been rented by electrical goods retailer Kotsovolos – recently acquired by British group Dixons – while absorption of the rest is not expected to face problems due to the considerable demand for good facilities. Also, due to the new transportation infrastructure, new logistics centers are sprouting up along Attiki Odos and the Athens-Lamia national highway, while important deals are expected to be announced soon near the industrial areas on the western outskirts of the capital, in Aspropyrgos and the Thriasio plain. Olympic Properties The strategic plan for the use of sports and other Olympic facilities after the Games is based on three axes: the best result for the public purse, the achievement of maximum social and economic benefits to citizens and the use of the facilities as levers for further local development, said Christos Hadziemmanuil, president of Olympic Properties, the public company which will undertake the management of 14 Olympic venues. He said the operational costs of the facilities cannot be accurately calculated until the contractors officially hand over the projects and technical data. «For all facilities, we have a specific picture of where we want to go but must first find out if whether there is real demand for what we have in mind. If not, we will think again,» said Hadziemmanuil.