Greece is well known for its natural beauty, traditional architecture, Mediterranean cuisine and a favourable climate

During recent years, the Greek real estate market has experienced a period of rapid growth and development, making it the “steaming engine” of national economy with a total property value of €68.2 billion, almost 42.6 per cent of GDP.

Generally speaking, there are plenty of reasons contributing to that expansion. First is the key geographical location of Greece; a member of the EU with a stable economic and political environment, its closeness to Balkan countries and the Middle East makes Greece an ideal location for any company with plans to expand. Secondly, the completion of the Olympic Games and all the major infrastructure upgrade projects that accompanied them make Greece well known for its security, climate, and natural and physical beauty.

Last but not least, the Greek economy is dramatically and dynamically improving, offering many opportunities for growth. Considering the fact that it consists of many sectors, which have unlimited margins for development and advancement, Greek economy becomes an ideal environment for someone looking to expand his or her business activities.

Thus, the increasing need for real estate property, along with the provision of advanced and sophisticated services, make the Greek market an attractive destination for any kind of real estate activity offering potential for revenues and growth.

But what are the current trends under this overview? The conclusions of many experts vary depending on the potentiality each property type represents.

Compared to last year, leisure property will decline due to a new VAT regulation and Tax Authorities Prices. On the other hand, the leisure property market will not remain stagnant, as the quantity of houses, which are at the final stage of development, are not subject to the new VAT tax.

The office space market meets a period of recovery presenting potential for growth and maturity. After three years of rent reductions, prices have stabilised at an indicative level of €15- €20 per square metre.

The interest in newly constructed office spaces is high for international companies that have particular specifications for their working environments.We cannot expect prices to rise, but rather to remain stable reflecting the sales prices, which are €4,000 or less per square metre, compared to lease prices which are €20 or less per square metre. From the investment point of view, the offering yields are about 6-6.75 per cent.

The consequential changes in retail commerce do not leave the real estate market uninfluenced. Further, the construction and operation of big commercial and entertainment centres is estimated to change the price levels of the shops situated at traditionally commercial neighbours resulting in price reductions, increases in offering spaces and improvement of products and services. The demand for commercial property is estimated to continue increasing, especially after the successful operation of big multinational chain stores that wished to expand their activities in Greek market. These successful examples will attract the interest of other multinational chain stores and foreign investors to invest in big projects. As a result, substantial progress will be made in the sector of direct investments, either from foreign funds wishing to proceed on purchases of plots for development or from big national companies.

Logistics real estate in Greece is a sector that, in the last decade, has stimulated large business deals. There are various reasons as to why the entrance of big international commercial chain stores to the Greek market would have a positive impact on logistics real estate:

• The increased amount of imported products from Asian countries;
• The application of supply chain management methods and ecommerce solutions used by many companies today;
• Growth trends expect to be reinforced by the new development law that finances up to 40 per cent of the construction cost of each logistics project, offering excellent opportunities for someone considering such projects.

More precisely, 2004 was an important year for logistics due to the investments made in infrastructure and technology in order to serve the crowds of the Olympics. For the current year, it is estimated that the rate of development will reach almost 12 per cent.

From financial point of view, the prices for the acquisition of plots for logistics development range from €80-€170 per square metre, while the existing coverage building factor is about 40 per cent and the construction cost is about €300-€350 per square metre.

The market for summer and resort houses is experiencing a period of the greatest growth of the past few years. On the supply side of this market, many big projects are in progress by big construction companies and international or domestic developers; the new tax law that encourages investments across Greece helps these projects. On the other side, the demand for new houses from pensioners from north European countries and high wealth individuals from East Europe is estimated to continue, especially on the famous Greek Islands and in coastal properties throughout Greece.

There are several reasons as to why this demand will continue growing. First, Greece is well known for its natural beauty, traditional architecture, Mediterranean cuisine and a favourable climate. Further, Greece is surrounded by sea and has one of the longest coastal lines in Europe. In effect, it provides a variety of coastal properties, many of which are extremely close to mountains as well. Offering both land and sea, Greece has plenty of special area for developers or investors to build or buy summer homes. In conclusion, being at the centre of interest for many expanding, multinational companies, the Greek real estate market is experiencing maturity and development. The strong competition between national and international players will bring about increasing needs for newly constructed office spaces and logistics centres, leading to improvement of products and services throughout the following years.

Biography

Dimitris Biniaris is General Secretary of the Greek Chapter of the International Real Estate Federation (FIABCI) and also General Secretary of the Greek Federation of Real Estate Agents.With 12 years’ active involvement in real estate, he is the founder and Managing Director of the DBINIARIS S.A, as well as the company’s head of the Investment and Consultancy departments and a project manager.