More commercial property owners than ever will need to take up the government offer for a voluntary reduction of their rental rates partly covered by the state and in agreement with the tenants up to the end of 2020.
Real estate professionals say that every owner will have to keep in mind how critical the situation is and how easily they might lose many months’ worth of rent, otherwise the phenomena of the decade-long crisis of the 2010s will be repeated. That was when commercial areas such as Patission and Stadiou streets in central Athens saw every other store closed for years, in need of tenants.
Conditions are even worse in less popular areas: Many landlords who did not consent to rent reductions at the start of the pandemic saw their tenants either depart or go out of business, as they could not meet their obligations.
Owners realize this cannot be repeated: Although some are against the forced rent reduction for enterprises in the sectors of culture and sports, transport, tourism and food service, there are plenty of landlords who will proceed to the voluntary cut in rents, thereby carrying many others along. Recent experience has also shown that the temporary reduction of rents largely protects owners from a possible departure by the tenant.
The owners running the biggest risk are those with properties in the secondary markets of the capital, such as Nea Smyrni, Maroussi, Nea Ionia, or even the more central parts of Academias and Stadiou streets and the part of Patission beyond the Athens Polytechnic building. These are spots that have suffered in recent years, and only in 2019 did they start seeing some recovery in demand and revenues.
On the other hand, the most popular areas, such as Ermou Street and Kolonaki in downtown Athens, saw a swift recovery from mid-2016, peaking in 2019 when rents came close to the all-time highs of the late 2000s. For example, on Ermou Street the monthly rent for a store close to Syntagma Square reached 285 euros per square meter last year, which is not too far from the all-time peak of €350/sq.m. in 2008.
That does not mean landlords with property in those areas should reject a rental reduction, because even if it is easier to find another tenant, it will probably not be for the same rent that is being paid today.