Real estate’s fronts

The year that just ended was a peculiar one for the real estate market: Significant changes and progress were recorded but the final account is poor in projects and results, while a number of «fronts» stay open in this new, crucial year for the market. No doubt 2004 left Greece with the sweet taste of two events, linked, directly or not, with real estate: The Olympic Games and the Euro 2004 soccer triumph. The Games’ infrastructure projects have changed the map both in the housing and the commercial real estate markets. The property market can now capitalize on Greece’s global promotion, complementing the tourism industry by providing modern accommodation, as well as attracting foreign investment in housing and commercial plans and in the Olympic installations, where investor interest is intense. The soccer triumph has brought forward the need for modern stadiums, along with their better commercial use. On the other hand, the domestic real estate market failed in 2004 to deal with permanent problems, such as those of legislative and town-planning tangles, with land usage on top of the pile. Finding solutions has again been postponed, keeping Greece firmly out of reach of international institutional investors. The expected Council of State decisions on town planning will determine the market’s course, adding to market pressure toward its main demand, the creation of a modern institutional framework. Housing prices down Another characteristic of 2004 was the first price decline, if limited, in housing since 1995. Cybarco Property Development Managing Director Akis Kyradzis says buyers had a wait-and-see attitude in expensive areas, while in medium-priced and cheaper areas, there was significant demand. «This waiting stance means the market was and is expecting something, which is the tax measure package for real estate in early 2005. The postponement of purchases combined with the expected drop in supply and the narrowing of price differences between expensive and medium-priced areas are paving the way for a rise in prices,» predicts Kyradzis. He estimates that 2005 «will be dominated by a rise in cheaper areas, stability in medium ones and a trend to develop areas that became more accessible thanks to the Attiki Odos, the metro and the suburban railway.» The operation of the first large housing complexes in Maroussi and Pallini are another important development. These big complexes, a first-time reality in Greece, are a real challenge for property developers. Whether Greeks are ready for such a housing project remains to be seen, but the first evidence is not very encouraging. Commercial property up Significant tidings are expected in the commercial real estate market. The combination of large domestic and international chains and real estate has evolved quickly over the last few years and will probably culminate in 2005. Dimitris Voutzas, of the Greek branch of Cushman & Wakefield, estimates that by the end of the new year, Greece will have new shopping enters covering a total area of 217,600 sq.m., changing the character of the market considerably. «These developments secure an extensive variety of shopping venues and offer complete services for the management and promotion of active retail business, providing easy parking that makes the customer’s purchases simpler. Leading the way from 2004 regarding shopping-entertainment centers are first steps by domestic developers City Gate, Florida 2 & 3 and Apollonia Politia in Thessaloniki, and the Old City in Volos,» says Voutzas. He suggests that «shopping malls attract large international chains (MediaMarkt, Dixons, Sato-Bo Concept, Lidl, Alex Pack, etc), while the advent of big companies from abroad (Oysho, Zara Home, Stradivarius) and new firms, such as Douglas, Footlocker, Fnac, Kenvelo, Pimkie, Lush and Tie Rack, will bolster demand for space in the main commercial markets in Athens and Thessaloniki, continuing the 2004 trend.» Theodoros Haragionis, managing director of the Haragionis group, who is experienced in developing commercial spaces, brands 2005 the year of «modernization» of the retail sales market. «The expansion of existing chains and the entry of new ones into the Greek market strengthen demand for commercial spaces both in high streets and at shopping malls,» Haragionis explains. He adds that significant developments are expected in the recreation sector, with more cinema multiplexes featuring high-quality services. «The sole losers will be the old cinemas, by being ‘prisoners’ to a series of unreasonable laws that were meant to protect them but solely contain counterincentives to their development,» Haragionis reveals. Finally, the office market, after the great drop in rents, seems able to move from stability toward a rise. Aris Vovos, managing director of the Babis Vovos construction company, says demand has risen on commercial streets such as Kifissias Avenue. The greatest profit from the Olympics was a limiting of the risk for multinationals studying expansion to Greece. For the new year Vovos expects a rise in lease and sale rates due to an increase in demand. Kifissias Avenue will remain the focus of attention as the possibility of ministries moving there could make prices take off. Interest will also be substantial for the Attiki Odos, particularly near the airport.