Opportunities in real estate

Bank of Greece identifies sectors that are likely to offer investors high yields

Opportunities in real estate

The Bank of Greece has identified a number of property categories where investment in real estate in Greece makes particular sense, as the central bank anticipates significant returns in the next couple of years.

In its recent report on monetary policy, the central bank highlighted logistics, commercial warehouses close to Athens and Thessaloniki, as well as investment in housing for specific groups (e.g. student residences and retirement homes), as having significant prospects for future capital gains and development.

At the same time, expectations remain positive for hotels and high-standard hospitality, bioclimatic offices, but also data centers.

According to a commercial real estate market survey by BoG, during the second half of 2023, the minimum yields of high-end offices in the most commercial parts of Athens ranged between 5.5% and 6.7%, while the minimum yields of high-end shops ranged between 5.2% and 6.1%. The corresponding yields in Thessaloniki are estimated at between 6.5% and 7.4% for offices and 5.6% and 6.5% for shops.

Based on the indexes published by the Bank of Greece, during the second half of 2023, the prices of high-end offices increased by 2.1% compared to six months earlier, while the prices of high-end shops increased by 2.4%.

In Athens, the respective growth rates for both office and high-end retail were higher at 2.9% and 3.4%. At the nationwide level, increases were also recorded in office and shop rents of all categories, by 1.5% and 1.1% respectively.

At the same time, as reported by the central bank, in 2023 and in the first two months of 2024 construction activity for commercial real estate recorded positive rates of change at country level. The individual real estate categories showed different speeds, with the number of new office and retail licenses in January-February 2024 increasing by 6.5% and 68.3% year-on-year respectively, while hotels decreased by 13%.

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