Shift in commercial property

Real estate investment companies (REICs) and property investment funds are expected to make a shift this year to new income property categories.

In this context property market professionals estimate the investors will target asset categories such as buildings in the city center of Athens deemed appropriate for last-mile logistics that will speed up the delivery of goods bought through electronic stores.

There will also be interest in the acquisition of buildings hosting data centers and in serviced apartments – i.e. furnished residences combined with the supply of services, whether they are aimed at students or multinational corporate employees, or even tourists.

Furthermore, in the property development sector there is a trend toward the creation of mixed-use buildings or complexes.

The strong competition among REICs has started reducing returns, as the purchase prices of new properties are heading higher. This leads companies to two main options – i.e. seeking alternative property categories offering higher yields, or the development of owned assets either via the purchase of plots or through joint investments with property development companies.

One of the trends that stood out last year and will continue in 2022 is luxury residences, with the successful example of Elliniko operating as a pilot. In this context, Prodea Investments proceeded a few months ago to buying a plot in the broader area of Elliniko. The REIC will invest a total of 11.5 million euros in the development of a luxurious housing complex.

In contrast, rival Premia Properties has chosen serviced apartments that come with full service and furniture so as to maximize revenues from rent. It has already invested some €20 million in the purchase of 211 such apartments and has targeted the creation of a portfolio with 1,000 such assets in the future. It is also interested in utilizing properties it has already acquired, as houses leased out to students and workers.

Noval Property, of the Viohalco group, has also turned to developing serviced apartments, but places more emphasis on hospitality. After the K29 residential building in Agiou Konstantinou Square in Athens it will utilize another asset in Mets.