Tourism boom leads to drop in office space

Greece is in urgent need of new investment in the office property market, as the shortage of quality modern buildings becomes increasingly evident, sector professionals told the 13th RED Business Forum on Tuesday in Athens.

The shortage is due to the lack of any fresh investment in recent years, as well as to the trend toward changing the use of existing office buildings, particularly in the center of Athens, and transforming them into modern furnished apartments to be leased on online platforms such as Airbnb.

Some office buildings have also been turned into boutique hotels, tapping the major growth in incoming tourism.

These developments have had a direct impact on the office market, reducing the returns of high-quality properties, increasing their prices and pushing rental rates higher.

According to Danos/BNP Paribas Real Estate’s general manager Yannis Paraskevopoulos, one of the main features of the local office market is the considerable drop in office space availability: “There are no new developments. Just a handful of projects are taking place in the Athens market, where the absorption rate is growing,” he reported.