Shopping malls galore

The Greek property market was dominated by two developments in 2005: the rise in the cost of houses and the operation of the first major commercial and entertainment centers. The former, which is the more important one for the majority of Greek households, was due to the advent of new official values – used for tax purposes – and to the rise in sale prices across virtually all areas of the country. The new malls, besides the changes they have brought to the commercial map, seem to accelerate the processes of structural changes in issues such as shop opening hours and the new labor relations under formation. During 2005 the new commercial and entertainment spaces opened to the public amounted to an estimated 232,000 square meters, according to the Greek arm of international company Savills. Within just one year the total of organized commercial space for rent increased by 63 percent, reaching 600,000 sq.m., and as regards shopping centers there is a ratio of 55 sq.m. per 1,000 people, still one of the lowest in Europe. In Portugal, a mature market in terms of shopping centers, about 480,000 sq.m. of commercial space will be constructed in the next couple of years, led by commercial parks. In Greece, by contrast, although interest by retail chains appears stronger, the supply of commercial parks is particularly limited. For the time being, the only commercial park being studied is the one REDS wants to develop, expecting its license. The commercial park at Athens Airport is in the final stage of development, with the addition this year of discount stores from French company Leroy Merlin (12,500 sq.m.) and Greek Elmec Sport (6,000 sq.m.) Despite the creation of these two factory outlets, the development of this type of market in Greece has grown slowly, so that the big players globally are not interested in the Greek market for now, Savills stressed. Not long ago MacArthurGlen, one of the biggest companies worldwide in the factory outlet domain, had scanned the capital’s market for some time, but abandoned its efforts due to the lack of appropriate spaces. Small is big Savills places particular emphasis on the development of organized commercial spaces of smaller scale and surface than a typical shopping mall in Athens’s broader center; this is a field where the Haragionis group has been very active with six projects currently under way. The creation of major shopping centers in Athens (The Mall by Lamda Development) and in Thessaloniki (Mediterranean Cosmos by Lamda Development and Sierra/Haragionis) has attracted new international retail chains to the Greek market. Savills data show that 20 new chains entered Greece in 2005, choosing the «protected» environment of malls to launch their activity into the unknown Greek market. The discount retail chain Tengelman is already active in this country with Plus supermarkets, while major international players such as Wal Mart, Tesco, Parfois and Vasco Santos are planning their entry in the near future. Also Germany’s Bijoux Brigitte is aiming to open seven stores in Attica, Sephora is expanding outside the capital, while Douglas and Foot Locker will soon have an outlet in Thessaloniki. Another notable entry was that of Media Markt on Kifissias Avenue in Athens. Ikea will add a second store to the one by the airport, this one in western Athens. It will stretch to 25,000 sq.m. and start operating in the first half of 2007.