Real Estate Economy in Greece Grows in Multiple Sectors

The recently released Cushman Wakefield Proprius Marketplace Real Estate report demonstrated a significant growth in the Real Estate economy of Greece. The economy grew in all three different sectors, industrial, retail, and office.

The Growth of the Economy of Greece

The Greek economy’s overall health contributes to this sector’s growth. Unemployment is falling. According to the report, in September, it reached a 14-year low at 10%. This drop from 11.3% in Q2 2023 indicates an improving job market. Employment growth maintains momentum, growing by 1.6% year-on-year. A healthy job market supports consumer spending. This, in turn, boosts demand for logistics services.

Logistics Real Estate

The report noted that the logistics real estate sector in Greece is thriving. This reflects the nation’s broader economic growth. A key factor is the 2.5% growth projected this year. Greece’s growth in 2024 is expected at 2%. These rates surpass Eurozone averages. S&P Global’s upgrade of Greece to investment grade boosts market confidence. This stability is vital for logistics real estate expansion.

Businesses require more operational space, driving demand for logistics facilities. Greece’s industrial property market, especially in Attica, witnesses significant investments. The commerce sector’s evolution impacts this demand. It shifts towards a blend of online and physical stores. This change necessitates improved logistics capabilities. About 120,000 sqm of industrial space was absorbed in Q3 2023. This absorption rate exceeds previous years, indicating strong market demand.

The office and retail sectors in Greece also show positive trends. The tech sector’s growth, particularly in Athens, suggests a robust business environment. Furthermore, this growth supports the logistics sector indirectly. In addition, retail is experiencing an increase in transactions. Stable rental values in retail are supported by tourism and consumer spending.

A shift towards sustainability is reshaping the logistics market. Investors and occupiers are now focusing on ESG criteria. This trend is leading to more sustainable, efficient logistics spaces. The logistics real estate market’s growth is multi-dimensional. It’s influenced by economic expansion, e-commerce rise, and sustainability trends.

Increased demand and construction costs are driving rents up. The market is showing maturity signs, with average yields decreasing. This situation offers opportunities and challenges in the logistics sector. Stakeholders must navigate these dynamics carefully.

The PMI index, however, shows some challenges. In September, it closed at 50.3 points. This is down from 52.9 points in August. Reasons include rising input costs, new order decreases, and supply chain delays. These factors could impact logistics operations.

Office Real Estate

The office sector’s performance also impacts logistics indirectly. Q3 2023 saw a take-up of 50,000 sqm in offices. This level is stable compared to the previous quarter. It’s 100% above the same period in 2022. The aggregate total for the first three quarters of 2023 is 40% higher year-on-year. As noted above, the technology sector is driving demand in Athens. Office investment volumes recorded €90 million in Q3 2023. This is 25% higher compared to last year.

Noticeably, Investors remain cautious due to rising financing costs. The prime yields stayed stable across all sectors in the third quarter. In contrast with the yields, the prime rent in offices rose to €28/sqm/month. Some deals exceeded €30/sqm/month. Building quality significantly influences rent levels hence, within the same area, rent trends can vary.

Retail Real Estate

Retail saw 52 transactions in different markets this quarter. This is 30% higher than the previous quarter. It’s 25% higher year-on-year. Stable rental values in high streets were noted. The summer period’s tourist presence helped. Retail investment volumes were around €40 million.

Πηγή: greekreporters.com//Dimitrios Gkinis