ECONOMY

Olympics upgrade will attract investors to Athens, notes leading American real estate company

The successful staging of the Olympic Games has markedly improved Athens’s infrastructure but, above all, has promoted the capital across the world and highlighted its modern face, says the US real estate services company CB Richard Ellis in its latest report. «Athens today is a modern European city, with a subway, tram, ring roads and a considerably upgraded road network, able to attract significant investments, both in real estate and in other sectors,» notes CBRE, which operates in Greece through Danos & Partners. It reports that housing prices declined in March, falling by 4.5 percent yearly, which had not happened since the last quarter of 1995. «After three years of a strong rise, with prices climbing by 17.6 percent, 16.2 percent and 4 percent in 2001, 2002 and 2003, respectively, the housing market shows clear indications of fatigue, attributed mainly to the building frenzy of the recent past and the decline in demand,» says the report. Bucking the trend are areas hosting Olympic installations, due to better access and their makeovers, with Maroussi, Faliron and Hellenikon standing out for showing increased demand in newly built houses. On the contrary, areas along the Attiki Odos, such as Vrilissia, Gerakas and Neo Iraklion, record a decline as expectations were exaggerated and an overabundance of houses is the dominant phenomenon. Regarding the factors to shape demand in 2005, the report is not particularly encouraging. The forthcoming rise in interest rates, expected in the new year, will keep demand at low levels but, along with the forecast rise of the euro, will limit the housing sales increase rate. Mortgages have steadily slowed since the middle of 2003, but their volume increases. On the other hand, the reduction in building activity, the increase in available income and demographic and social developments are expected to have a balancing effect, at least on housing prices. In the office market, CBRE sees a stabilizing trend, further believing that the plan by at least six ministries to relocate could change the situation in the sector. This market is dominated by the relocation of enterprises and the trend toward putting services and sections under the same roof, while the emergence of new office markets along the Attiki Odos, Kifissias Avenue and the National Road increases competition and keeps monthly rents between 12 and 25 euros per sq.m. The so-called «Big Box» developments are successful in the Greek commercial development sector. A typical example is Ikea, still planning major development. Furthermore, the two large shopping centers expected to operate in the city center and in Maroussi will renew the interest of consumers and investors; considerable activity is also seen in retail chains seeking new stores. International chains, such as Debenhams, Fnac and H&M, are preparing penetration into the Greek market, while Zara and Starbucks, already in, are expected to expand rapidly. The high street market is characterized by limited supply and increased demand, as new chains arrive from abroad, while others expand. The highest monthly rents range from 100 euros/sq.m. on Sotiros Road to 190 euros/sq.m. on Ermou Street, with goodwill maintained in the privileged spots on commercial streets.