More than 375,500 square meters of quality office space are under construction or have recently entered the market of Athens as demand for prime work space remains strong despite the pandemic.
At a time when many European markets are looking for ways to reduce the oversupply of offices resulting from the increase in remote working, demand for good quality offices in Greece continues to rise, mainly from large multinational companies.
According to data from Arbitrage Real Estate and DCarbon, most of the new offices entering the market are located in the center of Athens, Maroussi and Piraeus and will receive green certification.
"The construction of new buildings has lagged behind and the buildings that have been added to the market in recent years are generally limited," Konstantinos Markogiannakis, Head of Valuation & Advisory at Arbitrage Real Estate, told Business Daily.
"However, all new buildings meet high standards of sustainability and the trend of 'green' buildings, which has emerged in the last 5-6 years, continues at an increasing rate," he added.
A number of features make a building environmentally friendly, such as the provision of natural ventilation, adequate lighting and multi-functional building ventilation systems (passive and active).
Market officials point out that multinational companies usually look for dynamic and flexible spaces that promote collaboration and interaction, focusing on space and entertainment venues as well as outdoor meeting places.
Among the offices that meet many of these criteria are the Piraeus Tower, the Piraeus Port Plaza, the offices and studios of Cosmote TV (completed in 2019) - all three projects belong to Dimand Real Estate Development.
Although prime office space is considered a low-risk investment, market officials note that the investment risk remains high for older office buildings providing conventional workplaces.
Recent data show that even in the heart of the pandemic, in the second half of last year, an impressive number of transactions were completed in Athens.
According to Danos, the deals made in the second semester amounted to 900 million to 1 billion euros.
"The lack of grade A office space still remains an issue to the market supply, since there is lack of quality spaces to meet investor demand that appears to be persistent despite the pandemic. Athens is a prominent office market since here is room for investor profit compared to other European Office markets. There is a pipeline of new developments for grade A office spaces, that will partly meet the current demand, however there are optimistic plans for the next 5 years in the sector," says Danos.
Meanwhile, the price of offices continue to rise but the pace has been slowing for some three years now.
Bank of Greece figures for the first half of 2020 show that the nominal prices of high standard office space, in relation to the second half of 2019, increased marginally by 0.3% in the greater Athens area, in relation to an increase of 2.6% in the second half of 2019 and 2.7% in the first six months of 2019.
Stelios Bouras
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