Athens office lease rates continue positive course

The trend toward an increase in office rental rates in the Greek capital, first noted in the latter half of 2016, was consolidated in the first half of 2017. A recent analysis of the state of the sector in Europe by Savills indicated that the Athens market is continuing its positive course this year.

Savills analysts say that rental rates in Athens range between 10 and 14 euros per square meter per month.

However, over the course of the last few weeks rental deals for high-standard offices in the capital at rates of between 15 and 16 euros/sq.m. have been observed.

This serves to confirm the growth trend in office rental rates, at least for quality properties, which are something of a rarity in Athens.

It is no coincidence that the availability of such properties has now dropped to just 3-5 percent, depending on the location, while office space in the B category has an availability rate of 12-14 percent.

If one adds to that the horizontal properties located in several city center buildings, and older properties, then the B category availability rate climbs to 20 percent, illustrating the theory that Athens has a multi-speed office market, with the top-quality category standing out considerably.

Nowadays demand is focused primarily on northern Athens, particularly around Kifissias Avenue, which connects the city center with the northern suburbs.

Many enterprises are looking to lease high-standard office space now that rental rates have dropped to a very attractive level.

As the Savills analysis notes, demand is also being fed by corporations’ desire to reduce their installation costs by concentrating their activities that were hitherto scattered around different locations.

That improvement in conditions in the office market has also revitalized investment interest both in new developments and in the acquisition of income-oriented properties by institutional investors such as real estate investment companies.

A senior official at one such firm, Ethniki Pangaea, recently said that “we’re at a particularly favorable juncture, as we are at the lower part of the cycle and investors consider a market rebound inevitable.”