Greece Commercial Real Estate: Athens Office Boom

Athens is witnessing a surge in commercial real estate, with over 200,000 sq.m. of new offices being developed to satisfy rising business demand.

In the bustling realm of Athens' real estate market, a staggering 200,000 square meters of new office edifices are currently under construction, with an additional 133,428 square meters in the planning stages. This surge in development is emblematic of the burgeoning investment activity aimed at satisfying the insatiable demand for modern commercial spaces.

According to a recent analysis by CW Proprius, the second quarter of the year witnessed the absorption of 45,000 square meters of office space in the broader Attica region—a figure that represents a remarkable 50% increase from the first quarter. However, it is worth noting that this figure is 13% lower compared to the same period last year, primarily attributable to a dearth of available properties and a reduction in leasing agreements. Notably, during this quarter, a significant 60% of transactions pertained to contemporary office buildings, underscoring a clear preference for modernity among tenants.

In total, the first half of 2024 saw lease agreements signed for 75,000 square meters, with 40% of these contracts involving the renewal of existing leases, while the remaining 60% pertained to relocations to new premises. The analysis highlights robust demand from sectors such as services, information technology, and public administration. A notable example includes the relocation of the public revenue agency to newly refurbished offices at the former Athens Heart mall, which has been transformed by Premia Properties into a sustainable "green" building.

Geographically, one-third (32%) of leases in the second quarter were concentrated in the city center of Athens, with 30% in the northeastern segment of Attica. The southern suburbs, surprisingly, absorbed 25% of the demand, a significant uptick compared to recent trends. CW Proprius attributes this shift to the rising allure of the so-called Attica Riviera for both hospitality and office purposes.

The interplay of high demand and constrained supply continues to exert upward pressure on rental prices, which now hover around 30 euros per square meter on a monthly basis. Remarkably, many of the buildings currently under construction have already secured tenants, with 45% of the 197,400 square meters under construction already committed to lease agreements by the end of the second quarter.

In this quarter alone, 28,000 square meters of office space were delivered in Attica, with an impressive 70% of these spaces either already tenanted or in negotiations with prospective tenants. CW Proprius forecasts a sustained positive trajectory for the office market, with demand expected to remain robust, particularly for environmentally friendly "green" office buildings. Thus, as Athens continues to evolve, its commercial real estate landscape appears poised for a vibrant and sustainable future.