Com­mer­cial prop­erty in Greece draw­ing in­ter­est from in­vestors

Kathimerini English - - Front Page - BY NIKOS ROUSSANOGLOU

In­vestor in­ter­est in leased com­mer­cial prop­er­ties in Greece has grown over the last 12 months ac­cord­ing to lead­ing es­tate agents. They stress that this prop­erty cat­e­gory is the only one – with the ex­cep­tion of tourism – to have seen any de­mand re­cently.

Yian­nis Paraskevopou­los, man­ag­ing di­rec­tor at Danos & As­so­ciates, says that leased com­mer­cial or pro­fes­sional prop­er­ties that can fetch sig­nif­i­cant re­turns are mo­nop­o­liz­ing dis­cus­sions with po­ten­tial Greek as well as for­eign in­vestors and at­tract­ing the great­est in­ter­est. He at­tributes that to a num­ber of fac­tors, such as the strong cash flow of do­mes­tic real es­tate in­vest­ment com­pa­nies, es­pe­cially after the re­cent in­flow of funds and in­vestors into their share cap­i­tal.

Paraskevopou­los adds that another rea­son is the drop in rental rates, along with the in­crease in in­vest­ment yields due to the fi­nan­cial cri­sis that has re­duced the num­ber of mar­ket play­ers in most do­mains. This com­bi­na­tion greatly ben­e­fits the Greek real es­tate in­vest­ment mar­ket and is the main rea­son why for­eign in­vestors are fo­cus­ing on the coun­try, be­cause, as he points out, “in the main Euro­pean mar­kets there is a huge vol­ume of for­eign in­vest­ments, re­sult­ing in re­turns hav­ing reached sat­u­ra­tion point, so that makes them turn to other mar­kets be­sides the ma­ture ones.”

A fourth rea­son cited for in­vestors’ shift to lo­cal com­mer­cial prop­erty is the ex­pec­ta­tion of fu­ture cap­i­tal value, a fea­ture in the Greek mar­ket that mainly at­tracts long-term in­vestors.

Ac­cord­ing to Paraskevopou­los the re­turns on of­fer have stabi- lized and amount to 8-8.75 per­cent for of­fice space, 7.5-8 per­cent for com­mer­cial stores and 11-12 per­cent for stor­age/lo­gis­tics space. Th­ese re­turns con­cern prop­er­ties in high-de­mand ar­eas and with sol­vent lease­hold­ers, th­ese be­ing Greek en­ter­prises and ma­jor multi­na­tion­als.

On the other hand, cer­tain fac­tors are hold­ing the mar­ket back, such as the un­sta­ble and con­stantly chang­ing tax sys­tem, the gen­eral cli­mate of po­lit­i­cal in­sta­bil­ity and the low sup­ply of ap­pro­pri­ate prop­er­ties for in­vestors.

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