Retail giants are eyeing expansion to Greece, stirring the local commercial property market
The first quarter of the year was marked by consolidation in the Greek housing and commercial property market, according to a report by the international consultancy and agency CB Richard Ellis, which in this country is active through Danos & Associates. In January-March 2005 housing and commercial property prices remained stable, while in the office market there was an increase in spaces on offer. There is also more movement in the post-Olympic utilization of Olympic installations through the Culture Ministry and the «Olympic Properties» company. In housing, the significant rise in prices noted recently across Athens only emerged toward the end of the year’s first quarter. Furthermore, the considerably limited supply of land in Athens has sent plot prices through the roof, particularly in the already-expensive areas. For instance, the rate per square meter for a plot costs 4,000-6,000 euros in Kolonaki, 1,000-2,000 euros in Kifissia, 1,600-3,500 euros in Palaio Psychico and 1,100-3,500 euros in Glyfada. House sale prices in expensive areas continue to be under pressure. Activity in retailing in the first quarter was limited. Interest turned to large shopping centers such as CityLink in Athens city center, the Mall Athens in Maroussi and Mediterranean Cosmos at Pylaia in Thessaloniki – all of which are in the final construction stage and are expected to fully open by the end of this year. Global interest The report underscores the intense interest by many foreign chains to enter the Greek market, which is attractive because of the shopping center development. Chains such as Debenhams, Fnac and H&M have already leased spaces in shopping centers and are seeking additional shops. Germany’s Media Markt has completed its first leasings, while Zara and Starbucks are also expanding their presence. Ikea is proceeding to open a third store, and France’s Leroy Merlin, main rival of Praktiker, is preparing its entry to Greece with its most likely base being the Athens airport’s commercial park. In addition, discount store chain Tengelman is planning to enter the Greek market through its «Plus» brand name, while giants such as Wal-Mart, Tesco, Parfois and Vasco Santos are also contemplating their expansion to Greece in the near future. In addition to these, Germany’s Bijoux Brigitte is aiming at seven stores in Attica, Sephora is expanding beyond Athens, and Douglas and Foot Locker will soon have stores in Thessaloniki. Store leasing rates are stable, while in the two most expensive markets, the Ermou and Tsakalov streets in central Athens, rents are usually high, ranging from 140 to 180 euros per sq.m. per month. These two markets have very little available rental space, which, consequently, is hiking up rental rates in neighboring areas like the upgraded Stadiou street, where monthly leases now range between 110 and 160 euros/sq.m. In the office market, large multinational companies are practically monopolizing demand for spaces between 1,500 and 2,000 sq.m., with focus swinging toward areas away from the center, especially those benefitting from the new transport infrastructures. High rates and lack of parking spaces are the center’s main drawbacks, but leases are under pressure since many companies are either renegotiating them or relocating. CB Richard Ellis estimates that in 2005 office space availability will be at 10 percent, with Athens becoming the 13th most expensive office market in Europe, the report said. In the center (Vassilissis Sofias Avenue) rates range between 25 and 30 euros/sq.m., while at Kifissias Avenue the rates are 18-25 euros/sq.m. Rates for Syngrou and Mesogion avenues are going down while those near the National Road and Attiki Odos are going up and are now between 10 to 20 euros/sq m. After public transport makes the area more accessible, Kifissos Avenue actually may become the new emerging office market in Athens.
