ECONOMY

Property yields seen as ‘attractive’

Greece’s property market offers investors «attractive» returns with annual yields likely to soon move higher as prices remain low amid signs of improving investor sentiment, according to a property expert. Konstantinos Markogiannakis, international business consultant at Danos, said investor confidence started to show signs of improving as of April, supported by a low interest rate environment. «Yields have risen in the last year. It is not by a lot but there is an upward trend,» Markogiannakis told Kathi-merini English Edition. «We are likely to see this continuing.» Real estate industry figures indicate that annual returns in logistics are currently above 10 percent, while in retail and in office investments they exceed 7.5 percent. Greece’s property industry is moving roughly in line with performances seen in neighboring markets such as Bulgaria and Serbia but sub-sector returns vary. Prime street retail locations in Belgrade yielded around 7 percent in the first half of the year, according to data provided by Danos, while in Sofia the annual return from offices exceeded 10 percent. Greece’s real estate market has been hit hard by the downturn. Finance froze in the sector in the second half of last year due to the credit crunch while banks have kept a tight grip on lending out of fear that customers may not be able to pay back loans due to the downturn. The global crisis is likely to push Greece into recession within 2009, its first in 16 years, with some economists predicting sluggish growth of around 0.3 percent in 2010. Meanwhile, data presented by the National Statistical Service yesterday showed the downturn in construction activity may have bottomed out. Construction activity, measured by the number of new building permits, dropped 14.7 percent year-on-year in June after a 23.2 fall in May. It fell by more than 26 percent in April.