Jump in demand for new offices
Over 200,000 square meters of new office buildings are currently being developed in Athens’ real estate market, while another 133,428 sq.m. are being planned, a sign of the growing investment activity to meet the very high demand for the lease and use of modern premises by businesses.
According to the latest analysis by CW Proprius, only during the second quarter of the year, 45,000 m2 of premises in the wider area of Attica were absorbed, that was 50% higher compared to the first quarter, but also 13% lower on an annual basis, which is mainly due to fewer agreements and the lack of available premises. During the second quarter, 60% of deals were for modern office buildings.
In total, during the first half of 2024, agreements were signed for the lease of 75,000 m2, with 40% of the agreements regarding the renewal of existing contracts and the remaining 60% relocation to new offices.
According to the analysis, demand was significant from the services, IT and public administration sectors (such as the public revenue agency’s move to new offices, at the former Athens Heart mall, converted by Premia Properties into a “green” building).
One in three (32%) leases in the second quarter concerned properties in Athens city center and 30% in the northeastern part of Attica, while the southern suburbs absorbed 25% of demand, significantly higher than recently. As CW Proprius reports, this demonstrates the growing appeal of the so-called Attica Riviera for hospitality and office uses.
High demand and limited supply continue to fuel the rental prices, which are now around 30 euros/sq.m. on a monthly basis, while many of the buildings under construction have already secured tenants. At the end of the second quarter, from the 197,400 sq.m. under construction, lease agreements already existed for 45% of the premises.
In Q2 28,000 sq.m. of offices were delivered in Attica, with 70% of them already having a tenant or being in negotiations with prospective tenants.
CW Proprius estimates that conditions in the office market will remain positive and demand will stay high, especially for “green” office buildings.
