2018 Eurobank Market Report

Property Market
Annual Report 2018

Greece
The present advertising brochure

«Property Market Annual Report 2018» has been
issued by Eurobank Property Services S.A.
Editor in charge:
DIMITRIOS ANDRITSOS, MRICS
CEO
Division Head:
Dr. DIMITRIOS PAPASTAMOS, MRICS
Manager
[email protected] +30 211 880 93 78
Research Team:
IOANNIS ANTONAKAKIS, Economist, MPhil
[email protected], +30 211 880 93 77
ILIAS LIAPIKOS, Data Scientist, MSc
[email protected], +30 211 880 93 75
MYRSINI ZOUROU, Analyst, BSc
[email protected], +30 211 880 93 82
You can contact us in order to discuss solutions

tailored to your needs. To learn about our services,
you can visit our web site:
www.eurobankpropertyservices.gr
Date
March 2019
Regulated by RICS
Table of Contents
Economy ................................................. 3 Offices ................................................ 11
Greek Banks and NPEs ........................... 5 Retail .................................................. 14
Major Projects and Concessions ............. 6 Logistics ............................................. 18
Real Estate Taxation ................................ 9 Residential .......................................... 20
REICS and other Investment Funds ........ 9 Conclusions ........................................ 23
Economy
• The Greek economy is growing.
• Tourism is a main driver of the economy and of its residential and retail property market too.
• There is a deficit of high end offices but this has fuelled a retrofitting wave which not only
reintroduces good lo-cations but also contributes to the reinvigoration of various areas.
• At the same time, older offices are still converted into hotels in the centres of Athens and
Thessaloniki.
• The retail property segment is growing with falling vacancy rates and expanding high street
retail areas.
• At the same time, shopping patterns change due to the technological changes taking place.
• The logistics sector is growing, with large scale infrastructure projects creating the conditions
for it to become a main driver of the economy. The creation of organized industrial parks and
logistics hubs across Greece will ena-ble high speed, combined transports.
p 02 March 2019
ECONOMY
GDP Figure 1 - Quarterly GDP Growth (%)
4,0
The performance of Greek GDP has been
3,0
steadily positive in 2018, recording the 9th
quarter of QoQ growth in 2018Q3. 2,0
1,0
At the same time, the transition from a
0,0
-1% average year on year change in 2016
-1,0
to an 1,4% in 2017 and a 2,1% average
-2,0
increase in the first three quarters of 2018
can only be considered a positive sign as -3,0
to the short-term growth prospects of the -4,0
economy. -5,0
-6,0
Nevertheless, it remains low given the
Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3
4_ 5_ 6_ 7_ 8_ 9_ 0_ 1_ 2_ 3_ 4_ 5_ 6_ 7_ 8_
need to increase the country’s GDP as a 20
0 20
0
20
0
20
0
20
0
20
0
20
1
20
1
20
1
20
1
20
1
20
1
20
1
20
1
20
1
counterbalance to its enormous government Source: Hellenic Statistical Authority
debt.
Figure 2 - Unemployment Rate (%)

UNEMPLOYMENT 24
23,4%
Despite short periods of reversal,
unemployment remained on a consistently 23 Dec 16
downward path. Over the past 24 months,

increases were recorded only five times and 22
only once was and increase followed by a
second one.
21
While the average unemployment for 2016

was 23,5%, the respective figure for 2017 20
was 21,5%, and for the first eleven months
of 2018 the respective average was 19,4%. 19
18,5%
Despite being quite high and indicative
Nov 18
of the difficulties faced by the Greek 18
economy, its consistent drop and its speed _1
0
_0
1
_0
4
_0
7
_1
0
_0
1
_0
4
_0
7
_1
0
16 17 17 17 17 18 18 18 18
is a soothing factor given the still relatively 20 20 20 20 20 20 20 20 20
limited number of job creating investments Source: Hellenic Statistical Authority
taking place.
Figure 3 - Inflation (%)
2,0
INFLATION 1,5
Although recording negative figures in the beginning of
1,0
the year, inflation returned to a positive territory in the
0,5
second quarter and remained positive until the end of the
0,0
year, recording a 0.6% average for 2018. Nevertheless, the
low figures being recorded also point out the fact that the -0,5
recovery of the Greek economy has not been spotless so far. -1,0
-1,5
Q4
_ Q1 _ Q2 _ Q3 _ Q4 _ Q1 _ Q2 _ Q3 _ Q4 _ Q1 _ Q2 _ Q3 1 8_
16 16 16 16 17 17 17 17 18 18 18 20
20 20 20 20 20 20 20 20 20 20 20
Source: Hellenic Statistical Authority
Greek Property Market - Annual Report 2018 p 03 March 2019

BOND SPREADS TOURISM
Greek 10-year bond spreads de-escalated from the intimidating Tourism, one of the main contributors of the Greek economy, has
figures of the past five years, and since December of 2017 they had another good year. According to figures published by INSETE,
fell and remained below 4,5%. During 2018, the relevant figures airport arrivals were in record territory with a 13% increase in
recorded were between 3.8% and 4.4%, which while far better arrivals from abroad or 20,3 million passengers recorded in the
than those of the past, cannot be considered low in comparison first eleven months of the year. Athens and Thessaloniki recorded
to those of other European countries. Without doubt, the increases of 19% and 11% respectively. At the same time,
stabilisation at those levels is indicative of the elevated risks tourist arrivals via road network were slightly lower by 2%, but
still associated with the Greek economy. On average, the in absolute figures, arrivals were at 11,9 million, which is by no
average Greek 10-year bond spread was 4,2%. means a negligible figure.
Tourism receipts, according to figures published by the Bank

TRADE BALANCE
of Greece, did not exhibit a proportionate increase. Tourism
Despite short term variability, Greek exports have been
receipts increased by only 4% during the first eleven months
increasing since the first half of 2016, and this trend continued
of the year, backing the argument that the mix of tourists has
until November 2018. On the other hand, imports also
changed over the years in addition to an increase in shorter
started increasing in the second half of 2016 and have had a
term visits, such as city break tourism, leading to lower
counterbalancing effect on the trade balance of the country
incremental increases in receipts when compared to tourist
ever since. Unfortunately, the effect of imports has been
arrivals.
greater leading to increases of the average deficit, both in
2017 and the first eleven months of 2018, for which there is
available data.
CONSUMPTION
Overall consumption statistics were indicative of a positive note
on the Greek economy. Starting in 2016, on a monthly basis, the
positive changes in consumption increased from 5 in 2016 to 8
in 2017, to retreat to 6 in the first 10 months of 2018, while a
positive trend continued being recorded on average during the
year, despite short term variability.
Fuel consumption has been on a positive trend since the first

half of 2016, strengthening the argument that the economy is
in recovery mode. A similar picture is evident when focusing
on food sector consumption statistics, but similarly to fuel
consumption, it is a figure also affected by the positive impact
of increases in tourism.
Focusing on department store consumption, there was no

crystal clear trend, implying a phase of transformation and
intense competition, with increases not being recorded across
the market but only in certain segments. To some extent,
this is explained by the widespread use of discount offers
by retailers, with increased volumes sold not necessarily
corresponding to increased revenues. At the same time, non-
store retail consumption has been on a strong positive trend
since the beginning of 2016 and this trend continued during
the first ten months of 2018, on average. Among others, this
was indicative of the growth observed in online retail activity
in Greece.

GREEK BANKS AND NPES
After three recapitalisations and considerable cost cuts, Greek Figure 5 - NPE Ratio of Greek Banks (%)
49,5
banks found themselves in a far better condition by the end 0,6%
of 2018 than in the past years. With selective sales of their 49,0 -0,1%
-0,4% 1,4%
subsidiaries in the Balkans, they have focused their efforts on 48,5
the Greek market and the foreign subsidiaries each one has 48,0
-0,7%
chosen to keep and grow. The focus on core banking activities 47,5
continued during the year. 47,0 -1,5%
-1,1%
46,5
In terms of liquidity, conditions have improved considerably, with
the dependence of Greek banks on ECBs Emergency Liquidity 46,0
Assistance (ELA) falling from €46,5 billion in the beginning of 2017 45,5
to €22,0 billion in the beginning of 2018 and finally to €4,0 billion by 2017_Q1 2017_Q2 2017_Q3 2017_Q4 2018_Q1 2018_Q2 2018_Q3
Source: Bank of Greece
the end of the year.
During the year, although capital controls were still in place, As part of their effort to manage their non-performing
they were gradually eased providing further positive signals exposures, Greek commercial banks performed a number of
regarding of the economy and of the banking system of the portfolio sales which some of which included not only loans
country. Still, conditions remained demanding due to the NPL backed by asset collaterals but also repossessed properties.
load remaining pressing throughout the year. Two major deals of such portfolios were completed during
2018:
Overall, according to figures published by the Bank of Greece,
by the end of 2017 NPEs of commercial and cooperative banks • T he €1.950 million “Amoeba” collateral backed commercial
in Greece had decreased to € 94,4 billion, a 10% decrease in loan portfolio sold to Bain Capital Credit by Piraeus Bank
comparison to December 2016, while by the end of the third and
quarter of 2018 they had dropped to €84,7 billion, another • T he €800 million “Jupiter” collateral backed commercial loan
10,3% decrease in the first 9 months of the year. and REO portfolio sold to Lana Securitisation Sarl by Alpha
Bank. The former is funded by Apollo Global Management
Figure 4 - NPEs of Greek Banks
110,00 LLC and the International Finance Corporation (IFC)
104,83
105,00 Furthermore, since in many cases, non-performing exposures
100,00 to some borrowers were not the exclusive to one bank only,
the four systemic banks also entered into a servicing deal with
€ billion
95,00
doBank for an €1,8 billion portfolio of non-performing loans of
90,00
this category.
85,00
84,72 In certain cases, investors focused on the loans of specific
80,00
companies. Pillarstone agreed with the four systemic banks to
2017_Q1 2017_Q2 2017_Q3 2017_Q4 2018_Q1 2018_Q2 2018_Q3
assume the servicing of over €150 million loans of Notos Com
Source: Bank of Greece
Holdings combined with an equity infusion of €25 million which
will be performed jointly with the four creditor banks.
Nevertheless, the NPE ratio of Greek commercial and
cooperative banks which stood at 48,5% by the end of 2016, Finally, in order to speed up the process of lowering NPL ratios
dropped to 47,2% by the end of 2017 and reached 46,7% by the and have an alternative to other measures, negotiations took
end of the third quarter of 2018, implying that more steps are place during the second half of the year for the creation of a
still required for the Greek banking system to improve its health. “bad bank” which will offer a solution to those banks which will
be interested to massively offload non-performing loans.
So far, the effort to decrease the NPL burden has necessitated
write-downs and write-offs, loan modifications and
restructurings as well as non-performing loan portfolio sales of
both secured and unsecured loans.

MAJOR PROJECTS AND CONCESSIONS
AIRPORTS PORTS
Eleftherios Venizelos Airport Piraeus
The concession for Eleftherios Venizelos Airport in Attica was During 2018, Piraeus Port ranked second in Europe in terms of
extended by 20 years, while the Greek Government plans to put freight transport figures, from seventh in 2017. As part of the
another 30% held by HDRAF for sale in 2019. concession agreement with the Greek State, COSCO has agreed
to invest €293,7 million in port infrastructures. Besides those,
The 14 airports managed by Fraport there are further plans to develop additional infrastructures
Fraport officially assumed the management of the 14 airports
such as a logistics hub, car park buildings and a passenger
included in the concession agreement with the Greek
terminal for cruise ships.
Gevernment in March 2018. During 2017, the 14 airports
managed by Fraport recorded a 10,3% increase in passenger Thessaloniki
numbers in comparison with those of 2016. As for the port of Thessaloniki, 2018 was marked by the
acquisition of 67% of its capital by the South Europe Gateway
Upgrade works which had started in 2017 in the 14 airports
Thessaloniki (SEGT) joint venture. According to the investment
continued in 2018. Renovation and upgrade works of main
plan of the acquirer, there will be a modernisation of port
infrastructures continued during 2018, as did the expansion
infrastructures with a focus on freight transport equipment and
and upgrade of dedicated retail use spaces with the relevant
a re-organisation of it business structure in order to reposition
investment for the period 2017-2021 expected to be in the
the port in the market, attract freight volumes and develop
range of €50-55 million.
complementary activities, while optimising the utilisation its
During 2018 construction works for the new terminal of rail network connections. SEGT is obliged to perform €180
Macedonia Airport in Thessaloniki begun and the overall million investments in the coming seven years, as part of the
project will include the renovation of the existing terminal, the concession agreement with the Greek State.
renovation and extension of the runway and other works. As for
Other Ports
the remaining 13 airports, the completion of upgrade works in
As part of the ten smaller ports being prepared for future
the airports of Kavala, Zakynthos and Chania were expected by
concession agreements, Alexandroupolis Port is tilting towards
the end of 2018 with the completion of upgrade works of the
becoming a natural gas transport hub. Its planned connection
rest expected by the end of 2021.
with the IGB gas pipeline is expected to be used among others
The 23 remaining Airports for import of LNG from the US, while it also has space to
For the remaining 23 airports the management of which support logistics activities.
has yet been assigned to investors, clustering and selective
Elsewhere, the ports of Volos and Astakos are gradually
investments were considered as the preferable short term
attracting agricultural logistics activities with the former also
course of action, in order to improve their infrastructures and
attracting dry cargo activities, while other ports such as those of
increase their worth. A prime example, expected to become the
Kavala, Corfu, Igoumenitsa and Lavrio, are orientated towards
recipient of considerable investment is the airport of Kalamata
cruise related activities.
which, due to its location, can cater to a large number of cities
of the Peloponnese and tourist destinations.
RAIL TRANSPORT & INFRASTRUCTURE
The acquisition of TRAINOSE by Ferrovie dello Stato Italiane
is contributing towards starting a new chapter in terms of
rail infrastructure and rail transport services. A €500 million
investment plan will lead to the provision of high quality rail
transport services for both passengers and freight, creating
a viable competition to road and airport transport. To this
direction also helps the sale of “ΕΕΣΣΤΥ”, the state company
focusing on maintenance of locomotives, to TRAINOSE which
while approved by the Greek Court of Auditors during 2018,

was expecting the opinion of Greek competition authorities by Romania. The future brings a freight transport alternative to the
year-end, regarding whether it should remain an independent Straits of Bosphorus.
company or not.
The electrification project of the rail line connecting Athens

URBAN TRANSPORT
with Thessaloniki completed in December. Travel time on the
In Athens, the extension of metro line 3 continued in 2018
upgraded line has fallen on an announced 4 hour and 30 minute
with additional stations planned to be added to the currently
journey, while the completion of further infrastructure upgrades
active network in 2019. Further, works continued towards the
by the end of 2019 will further lower the time to 3 hours and 20
extension of the light rail network to Piraeus expected to be
minutes.
delivered for use in 2019. Gradual delivery of 25 new Alstom
At the same time considerable focus was recorded on the Citadis X05 trains is expected to begin during the year.
prospects of combined transport, through the connection of
As for the planned line 4 of Athens Metro, the three joint
the rail network with all major ports of mainland Greece, such
ventures chosen to participate in the bidding process for the
those of Piraeus, Patra, Igoumenitsa, Astakos, Volos, Ikonio,
€1,5 billion first phase of the project were expected to submit
Thessaloniki, Kavala, and Alexandroupolis.
their offers before mid-December and the selection process is
Thriassion expected to reach its conclusion by Spring 2019. The first phase
As for the part of the relevant concession, the management of the project is expected to add 14 new stations to the existing
of a 58,8 hectare area was awarded to ETVA-VIPE and Goldair, network.
which will be followed by an investment which is expected to
reach €160 million. The plan and construction of the relevant
infrastructure was assigned to Mytilinaios Group of companies
and, after the approval of European competition authorities, the
project is expected to begin with construction works expected
to last six years. 235.000sqm of buildings are expected to be
constructed in the coming 10 years.
At the same time, the invitation process for the future

concession of a 145 hectare area owned by OSE, i.e. a freight
terminal and the adjoining yard, is expected for 2019.
Gkonos military camp

The 67 hectare area in Diavata area of Thessaloniki is intended
to be converted into a logistics hub which will serve as a central In Thessaloniki, the construction works of the main metro
point in north and central Greece transports but also as a main line progressed during 2018, with 95% of construction works
logistics hub in the Balkans. Currently in the non-binding offer having been completed by the end of the year in 13 stations.
submission phase, the expectation is that by the end of 2019 2019 is expected to mark the completion of electromechanical
the concession will have been completed and an investor will works, the arrival of the first trains and the beginning of the
have been chosen. infrastructure test phase. By the end of 2020, the metro
network of the city is expected to have been completed and
As a project it is expected to serve complementary to the
delivered for use, with the planned expansion towards the west
logistics hub of Thriassion in Attica and that in Alexandroupolis.
of the city as well as towards Macedonia Airport expected to
Alexandroupolis follow.
An area of than 50 hectares is planned to be part of a €150m
project for the creation of a logistics hub which will operate REGENERATION PROJECTS
in tandem with the port of Alexandroupolis. Attracting great Hellenicon
interest as a LNG transportation hub, it is also expected to offer With the Greek Council of State having given its approval in the
direct access to the rail network connecting Alexandroupolis first quarter of 2018, judging the project as non-conflicting to
Port with the main western Black Sea ports of Bulgaria and the constitution or any laws, the €7 billion project is expected to

transform the old Hellenicon Airport into a high-end destination. Piraeus Regeneration
The 620 hectare area is expected to include a casino, hotels During the year the area witnessed progress in various projects
and residences for high net-worth individuals. According to which included the repaving of various streets and upgrades
expectations, 2019 might be a fruitful year which will mark the of its urban infrastructures with a balanced focus on both
signing of the agreement between Global Investment Group and pedestrians and vehicles.
the Greek Government, which will enable investors to proceed
to the initiation of construction works. Besides the centre of the city where commercial streets were
being upgraded through the year, a contract was signed for
Two major issues remained open at the end of 2018, the
the financing of the regeneration effort of Agios Dionyssios
solution of which is a prerequisite, were the permit to operate
area which will include a redistribution of traffic flows and a
a casino within the project area as well as the approval of the
reorientation towards pedestrians and cyclists.
city-planning studies of the project.
The public space management committee of the project, Within this context, the Piraeus Port Plaza redevelopment
a mechanism enabling the coordination with the adjoining project of Dimand Development progressed during the year. It
municipalities, convened in the beginning of 2019, marking gradually transforms the old Papastratos industrial premises
another step forward. into a complex housing a multitude of uses including offices,
hospitality uses and residences, acting as a proof of the
Athens Centre Regeneration gradual change of character of a previously industrial area into
The effort to rehabilitate the centre of Athens continued in 2018 a upgraded urban landscape, attractive to both businesses
with various functional and aesthetic upgrades taking place, and visitors. The planned construction of metro access and
aiming at reigniting business and visitor interest for the centre the upgrade of the passenger section of Piraeus Port will push
of the city. By providing support to a multitude of uses in order towards an extensive transform the area.
to remain or return to the centre through an attractive urban
landscape the city aimed not losing out on the increased tourist Finally, the municipality also moved forward with the
visits, as the city is gradually becomes a city break destination. regeneration project of Mikrolimano area. The aim is to keep
In addition the efforts of the Municipality, an additional pedestrian flows away from car flows, while expanding the
organization was created in 2018 to act as a connecting link regeneration towards SEF Stadium and creating a natural
between the government, Municipality of Athens and Perfecture “link” with the gradual upgrade of the seafront of Attica which
of Attica, enabling a better coordination of the actions required currently taking place through a number of widely impacting
for the regeneration of the various areas of the city. projects.
On the other hand, not very far from the centre of the city,
the Academy Gardens project was eventually cancelled, after
numerous obstacles and delays it faced over the past years.

REAL ESTATE TAXATION
During 2018, there was a first update of “zone values”, a investment plan. Despite having a Debt to Assets ratio of
fundamental metric of real estate taxation, having an impact 28% in May which probably allowed the company to further
on the objective value tax map and a great number of property increase its leverage, the debenture issue was paused due to
taxes. Due to the fact that the effect would impact transactions un-inviting conditions in the financial markets. Eventually in
taking place from the beginning of 2019, this contributed December, the company announced a secured debenture loan
to increased property transaction volumes, as recorded in of €120 million.
cadastral offices until the end of the year. Overall, the expected
By year-end, the expressed intention of NBG to sell its holdings
impact will be on at least 17 taxes, ranging from municipal
in Pangaea capital remained an issue to be addressed in the
taxes imposed on properties to off-shore company taxation.
beginning of 2019. As required by REIC law, Pangaea needed a
Furthermore, in an effort to record property owners and assets higher free float ratio than its current.
producing revenues from short term stays, a new registry was
Grivalia REIC
activated in August, which is expected to contribute to the
During the year, Grivalia was quite active. Besides the property
creation of a better regulatory framework for this market in
acquisitions it completed, the company arranged two secured
Greece. It is also expected to assist in addressing an issue of
lines of credit in the form of debenture loans of €75 million
non-disclosed incomes and in their taxation.
each, increasing its debt to assets ratio to 17% from 13% in the
beginning of the year.
At the same time, its cash fell from €62million in year-end 2016
REICS AND OTHER INVESTMENT to €54 million in year-end 2017 and reached 37 million by the
end of the third quarter of 2018, while its financial expenses
FUNDS increased to €4,4 million in 2018Q3 in comparison with €3,1
million in the respective period of 2017, without measuring the
2018 was marked by increased activity of real estate
effect of the new lines of credit announced during the year.
investment companies (REICs) while at the same time the
increased tax burden on these companies and turmoil in the Finally, in 2018Q4, Grivalia REIC and Eurobank decided to merge
markets partially held back their efforts to pursue growth. with the conversion of Grivalia shares into Eurobank shares, a
At the same time, a number of investment funds introduced move expected to contribute to capital adequacy ratios of the
competition for assets, adding further pressure. latter. As Greek banks focus on their core banking activities it
is expected the gradual sale of the portfolio currently held by
The effect of changes on the REIC tax applied in 2016 has had
Grivalia will follow.
a negative impact on its profits. With cash and equivalents held
by REICs being taxed at the same rate as their investments in Also during the year, Grivalia Hospitality, a company owned by
properties, there were are disincentives to retaining high levels M&G Investments (50%), Grivalia Properties REIC (25%) and
of idle cash for long. At the same time, the realisation of their ERB Eurolife (25%), was incorporated in Luxemburg. As part of
investment plans made increasing debt levels a choice. its effort to realize its investment plan, the company completed
a €60 million share capital increase, proportionately paid by its
Overall, 2018 was a quite active year for the Greek REIC
three shareholders.
market.
Trastor REIC
Pangaea REIC In similar fashion with other participants of the REIC market,
Two new investors, Castlelake and Coller Capital, indirectly
the company proceeded with a €24 million debenture loan in
acquired part of the share capital of NBG Pangaea REIC through
an effort to realize its investment plan and take advantage of
their acquisition of shares in Invel Capital, holder of 65.49% of
investment opportunities in the Greek real estate market.
Pangaea. This move was without doubt a vote of confidence in
its strategy and its prospects. Briq REIC
Also issued a €10 million debenture loan in July 2018 in order
During the first half of year, the company initiated the process
to finance its investment plan.
to issue a €400 million debenture loan in order to fund its

Ble Kedros REIC (Coco-Mat) plan in order to settle its debt with two of its main creditors.
The Coco-Mat owned company mainly focusing on hospitality During the year, the company was focused its effort on the
and retail properties issued a €4,2 million loan in October in repositioning of its main holding, Athens Heart Mall, which it
order to finance its investment plan. has been trying to make more attractive to prospective buyers.
According to published news, the company has been in talks
Orilina Properties REIC with Hines for some time in relation with this asset.
The November 2014 incorporated Orilina Properties, obtained a
REIC license in November 2018 which is followed by a two year Kloukinas Lappas
period to decide its listing in the stock market, a requirement Despite its initial intentions, the company temporarily stopped
in order to retain the REIC status. Its main focus is income the process to create and list a REIC in Athens Stock Exchange,
producing office and retail properties. due to not satisfying one of the listing requirements.
Noval
The Viochalco owned company, focusing on the real estate
holdings of the parent group, is planned to obtain REIC status
FOREIGN INVESTMENT FUNDS
The year was also marked by the introduction of new investors
in order to further promote the capabilities of the parent group
in the Greek real estate landscape, adding competition for prime
in the commercial real estate development and management
but distressed situation assets with good prospects to produce
business.
income. In the first quarter of the year, Dromeus Capital outbid
Fourlis other candidates in two office property auctions. Not bound by
Fourlis Holding applied for a REIC license in November. The limitations and eventually unattractive taxation of REIC status,
soon to be Trade Estates REIC, is expected to focus on retail such funds contributed to nudging and property yields lower.
and logistics properties catering to e-commerce activities.
On the other hand other investors, each for their own reasons,
Pasal Development aimed at liquidating their holdings in the Greek market. Among
Having found itself in difficulty, Pasal submitted a reorganization them, Grupo Dolphin and Helens Re.

OFFICE MARKET
OFFICES
DEMAND & SUPPLY Athens
During 2018, demand from users remained focused on higher • A mgen leased office spaces at 59-61 Agiou Konstrantinou
specification spaces in areas easily accessible using public Street in Maroussi
transport or in locations where finding a parking space is not • F MC moved to its new in Athens, at 348 Syngrou Avenue
too difficult. The desire for high visibility or better, the tolerance • n November AXA inaugurated its refurbished offices at 48
for a lower visibility location varied depending on the nature of Michalakopoulou Street
each company’s activities and that of its end customers. • K leopas Alliot moved to its new offices at 350 Syngrou
Avenue, in Kallithea
The technological evolution of hardware used in modern offices,
• G lobalWebIndex leased offices in Athens, at 56 Ermou Street
the use of wireless networks and a trend towards physical
• M arsh moved to its new office premises at 8-10 Sorrou
footprint minimization and mobility are redefining the required
Street
specifications of office spaces in Greece as well.
• N P Insurance moved to its new, owned offices at 81-83
Older offices can be retrofitted and become competitive once Kifissias Avenue, in Maroussi
again. Combined with the large stock of older assets, distressed • S hire moved to its new offices at 38 Vassileos Konstantinou
or not, retrofitting continued being a popular trend 2018. Offices Avenue, in Athens
in central and in general attractive locations were highly sought • Willis Tower Watson moved to its new address at 32 Kifissias
after since, once brought to a condition that satisfies aesthetic, Avenue, in Maroussi
energy performance, required layout and other important • NP ZOIS moved to new offices at 162-166 Syngrou Avenue,
C
standards set by tenants, those offices become desirable to Kallithea
users and can achieve much higher post-retrofit yields, plugging • axibeat announced its intent to bring its Athens activities,
T
the supply gap that continued in the quality office space currently in three locations, under one roof. It has agreed
segment during 2018. with Noval to lease 2.500sqm in the latter’s, office building
at 115 Kifissias Avenue in Ampelokipi, Athens which is
At the same time, in central locations, the trend to convert older currently under development.
office spaces into boutique hotels remained popular in 2018 and
was another factor lowering the availability of offices, especially Thessaloniki
in the business centres of Athens and Thessaloniki. • Interamerican opened new offices on 5 Ionos Dragoumi
• S igmaSoft move to new premises on 173-175 Ethnikis
Given that NPL property collateral pools contained a major Antistaseos, Kalamaria
source of candidates worth acquiring, investors were
particularly active in their search of distressed assets with Investors were particularly active during the year with a number
good prospects, seeking to close profitable deals. Even of acquisitions. Among the transactions completed during the
with a relatively short-term approach, after turning those year by some notable cases completed by Greek REICs stand out.
assets around and reclassifying them, the prospect of taking
Pangaea REIC
advantage of their full potential would materialise as a capital
• A cquired an approximately 6.900sqm office and retail
appreciation.
property at the intersection of Syngrou Avenue and
The lack of quality offices in good locations was evident by Lagoumitzi Street, in Neos Kosmos, Athens
the interest that good distressed assets attracted but also by
Grivalia REIC
the fact that the construction of semi-finished office projects,
• A cquired a 4.630sqm office building at the intersection of
paused for years in some cases, restarted during the year.
Omirou Street and Stadiou Street
This positive trend was amplified by the recorded preference • A cquired a 4.457sqm commercial building at 5 Grigoriou
of tenants to be based in high quality spaces. A number of Lampraki Street in Glyfada, with 2.025sqm are dedicated to
relocations and renovations took place during the year, among retail and offices uses
which some notable cases stood out. • cquired “Value Τουριστική” SA, owner of a 14.427sqm
A
office building at the intersection of the Ilia Iliou Street and

OFFICE MARKET
Minoos Street in Neos Kosmos, Athens • The completion by Dimand of a €48 million office building at
• cquired the remaining 50% of “Piraeus Port Plaza 1”, a
A Katsoni Street and Doiranis Street in Kalithea
14.170 sqm previously industrial building converted into • T he Piraeus Port Plaza buidings by Dimand, the gradual
offices, of with 9.700 sqm over ground completion of which progressed during the year
• cquired 49% of “Piraeus Port Plaza 2”, an 26.755sqm
A • The Orbit building by Noval on 115 Kifissias Avenue, the
previously industrial building converted into offices by construction of which restarted during 2018
Dimand SA, in Agios Dionyssios, Piraeus
Trastor REIC
• A cquired a 372sqm, 3rd floor office space at the intersection RENTS
Office rents increased slightly during the year. In Athens, for
of Filellinon Street and Othonos Street, in Athens. The
prime offices in Syntagma and Vassilissis Sofias Avenue, rents
company also owns the 4th and 5th floors of the building
were in the range between €17 and €21/sqm/month. Kifissias
• cquired a 1.600sqm office and retail building at 194
A
Avenue prime rents hovered in the range between €14 and €17/
Kifissias Avenue in Chalandri, with 901sqm above ground
sqm/month, while rents for prime offices at Syngrou Avenue
• cquired a 5.070sqm office building at 515 Messogion
A
remained lower, between €12 and €15/sqm/month. It should
Avenue in Aghia Paraskevi
be noted that there were few transactions for spaces located in
• cquired a 917sqm office space at 4 Theofanous Street in
A
office buildings which were in high demand, where higher rents
Athens
were recorded.
Intercontinental International REIC
Figure 6 - Prime Office Rents - Athens & Subs
• A cquired a 3.589sqm office building leased to a multinational 30,0
company, located at 18 Zekakou Street and Karamanli Street,
25,0
in Maroussi
• cquired an 838sqm building at 3 Charitos Street and 6
A 20,0
Sefssipou Street in Kolonaki, with office and retail uses 15,0
Briq REIC 10,0
• A cquired a 1.788 office building with 1.403 over ground, at 5,0

18 Filellinon Street in Chalandri.
0,0
• A cquired a 767sqm office space at 1 Alamanas Street in 2006 2008 2010 2012 2014 2016 2018
Maroussi Syngrou Avenue Kifissias Avenue CBD
• cquired a 1.629sqm building at 4 Gennadiou Street and
A Source: EPS R&A Division
Ypsilandou Street in Kolonaki, Athens
In Thessaloniki, rents for prime offices in the centre of the city
Besides REICs, other investors were active during the year. The
were in the range between €8 and €10/sqm/month, while its
most active, Dromeus Capital, completed three transactions
east and west suburbs, prime rents were in the range between
during the year.
€5 and €7/sqm/month.
• A cquired a 8.334sqm office complex at 66 Kifissias Avenue
Figure 7 - Prime Office Rents - Thessaloniki & Subs
in Maroussi
10,0
• cquired 921sqm of office spaces at 4 Theofanous Street in
A
8,0
Ampelokipi, Athens
• cquired a 1.400sqm building at 16 Kifissias Avenue,
A 6,0
operating as a medical centre 4,0
As for the office construction pipeline, new projects were few. 2,0
During the year, there was a focus on completing projects that 0,0
had been paused due to the crisis, acquiring and retrofitting 2012 2014 2016 2018
distressed assets but also for conversions into uses that were West Subs East Subs CBD
in demand. Three projects stood out. Source: EPS R&A Division

OFFICE MARKET
YIELDS Figure 9 - Prime Office Yields - Thessaloniki (%)

9,00
Overall, for prime offices yields were in the range between
7,25% and 7,75%. In specific cases, even lower yields were
considered acceptable. There were investors who were willing 8,00
to complete transactions at lower levels in expectation of a
recovery in rents and values in the coming years.
7,00
Figure 8 - Prime Office Yields - Athens & Subs (%)
9,00
6,00
8,50
20
20
20
20
20
20
15
17
16
13
14
18
8,00
Source: EPS R&A Division
7,50
7,00 OUTLOOK
6,50 Focusing on offices, the combination of increased demand,
which will continue as the economy recovers, with the lack of
6,00
modern specification spaces is expected to continue fueling the
20
20
20
20
20
20
20
20
20
20
20
20
08
11
14
15
10
12
13
18
07
09
retrofitting trend which is currently recorded.

16
17
It is a fact though that, as the stock of existing available

In Thessaloniki, yields for prime offices were in the range buildings diminishes and half-finished projects are completed
between 7,5% and 8,0%. and reach the market, absorption rates and improving credit
conditions will make new developments once again a viable
alternative, especially with the prospect of diminishing yields.
A positive medium term trend in rents is expected to be

dependent on the prospects of the economy and the longevity
of the economic recovery which will gradually require the
signing of new leases which will set the benchmark higher.

RETAIL MARKET
RETAIL
DEMAND & SUPPLY few of them were readily available, the fact that many were
Following a good year, 2018 was characterized by an uptick in large enough to enable a large scale of operations but remained
retail activity in prime areas and further stabilization in many empty was indicative of a still defensive posture of retailers and
secondary retail areas across Greece. investors towards locations not offering the highest visibility.
In part due to the combination of public works aiming to upgrade Furthermore, in addition to the high mark in seasonal tourism,
the urban landscape in the centres of cities across Greece and in the entire area reaped benefits due to the fact that the city
part due to increased tourist numbers in many of them, vacant gradually becomes a city break destination. The buoyant tourism
retail properties in prime areas were far less common sight than figures of 2018 and previous years, once again contributed to the
last year, with retailers gradually becoming interested in broader existence cases where hospitality uses replaced retail and office
areas than in the past. The aforementioned was influenced by uses. Another new arrival verified the relevant trend in 2018; Elia
increased footfall in many retail destinations, main streets and Ermou Athens Hotel on 15-17 Ermou Street opened its doors in
malls alike, which to some extent added to the allure of such December.
destinations in the eyes of retailers.
The notable rent and value differentials observed between
Athens Ermou and nearby streets, but also the number of older
In the centre of Athens, Ermou Street experienced another buildings remaining empty have attracted considerable
year of heavy consumer traffic. From Syntagma Square to investor interest in the area. Pangaea REIC acquired a number
Aeolou Street, there was no vacancy of readily available retail of buildings in the area which have the potential to house
units during the year, while there were two changes of retailer. both large retailers and hotels, among which was the old
Tsouderos replaced J. Bournazos at Ermou Street and Nikis Hitiroglou building at the intersection of Mitropoleos Street and
Street, while Guess replaced Replay at Kapnikareas Square. Kapnikareas Street.
Furthermore, in tune with the gradually rising profile of the street,
Overall though, despite notable exceptions, the area street
a number of renovations took place during the year, most notably
continued attracting mainly hospitality, food and beverage
those of the Bershka flagship store and of the BSB store. Overall,
related uses, with the main drive being to take advantage of the
in that section of the street there was only one building that
increased pedestrian traffic recorded in recent years. Repairs
remained empty during the year, but it should be noted that it
and renovations were a frequent sight during 2018 and have
was not readily available for use.
continued in the beginning of 2019.
In the section of Ermou Street, from Aeolou Street to Athinas
Despite the reignited interest in the area and widespread
Street, which has a comparatively lower profile, there were also
repaving of pedestrian routes performed by the municipality
no empty readily available units. Nevertheless, there still empty
in order to upgrade the centre of the city, old empty buildings
buildings in need of heavy repair works in order to become ready
were still not a rare sight at year-end. The longevity, strength
for tenants.
and distribution of the recovery in the retail property segment of
Similarly, new arrivals of tenants marked the neighbouring the area remains to be seen, especially given the repositioning
streets such as the OGGI store on Mitropoleos Street and of secondary retail clusters and the fact that retailers have
various smaller retailers, bars and restaurants on Mitropoleos, starting adopting hybrid approaches such as “request it on
Aeolou, Athinaidos, Kolokotroni and Athinas Street. the web site – try in the store” which change the dynamics
regarding the required space on a main retail shop.
On the other hand, despite the high performance of the main
retail corridor of the area, there were still spots that were With metro stations having become the access points of
indicative of the mixed perceptions as to the retail capacity of preference for visitors in the area, retailers take note and weigh
the area. Besides the very few, not readily available buildings it in their choices of locations. Besides Ermou Street, renewed
which remained empty on Ermou Street, the picture was a bit interest was recorded for locations on Stadiou Street, between
different on adjacent locations. Although gradually diminishing, Klafthmonos Square (Panepistimio Station) and Syntagma
there was a non-negligible number of buildings which could Square (Syntagma Station), with new arrivals including
house retail uses but were available throughout the year. While Imanoglou Jewelry and others.

RETAIL MARKET
It should be noted that a trend of retail gentrification continued main retail destinations of the southern suburbs of Athens, the
during the year with a gradually increasing interest for areas retail property landscape was marked by increased interest
which had ended up being avoided during the past years. This of retailers with a gradual expansion of areas where high
verified by the choice of large retailers to open stores in areas consumer footfall figures were recorded. Still the redistribution
which had clearly fallen behind due to the crisis, such as the of retailers which has taken place in various areas, due to the
part of Stadiou Street from Kafthmonos Square to Omonia financial crisis and owners not accepting lower rents, has
Square. created new clusters which retained strength in 2018 and was
not expected to change in the immediate future.
Examples of retailers choosing the area included Ianos with
a new shop focused on music. Other main streets of the area Nevertheless, empty stores were gradually leased while others
attracted retailer interest. Flying Tiger opened a new store at were renovated. To some extent, the situation was aided by the
Panepistimiou Avenue and 28th October Street, near Omonia use of percentage rents offering a lower entry point to retailers
Square, as did Galerie de Beauté. Both moved into a building and a different framework allowing shorter durations for
owned by NBG Pangaea REIC. commercial leases, introduced with law 4242/2014.
On the other hand, interest remained relatively stable for Similarly with the south, the northern suburbs such as Kifissia
currently prime locations in Kolonaki, with bars cafeterias, have recorded increased interest and healthy levels leasing
confectioneries and bakeries having replaced many fashion activity during 2018. Despite the existence of large malls
retailers, especially in smaller units, creating new clusters. This not far from local main street retail markets, which have had
has partially changed the character of the area. There was a a considerable effect so far, main streets in the northern
redistribution of retailers in the area, with the centre of interest suburbs have changed their retailer mix and after a geographic
being Filikis Etairias Square and Kanari Street. In contrast, there redistribution of retailers within them, have stabilised. During
was retailer interest for locations not far from those which last year, there was a gradual relative increase in leasing
definitely was not as strong. activity, a good sign under the “new normal” circumstances, but
still far from levels of the past. Still, there were indications of
2018 was characterized by an uptick in
opportunistic behaviour from both the side of few owners and
retail activity in prime areas and further prospective users in few cases.
stabilization in many secondary retail
areas across Greece. Elsewhere in Attica, there are various suburbs where retail
activity grew in 2018 and this had a marked positive effect on
Empty retail locations remained even on Filikis Etairias Square the local retail property markets, despite gradually changing
on Patriarchou Ioakim, Anagnostopoulou, Skoufa, Milioni, shopping patterns.
Solonos Street and elsewhere.
Thessaloniki
Of course, this was not necessarily due to diminished interest In Thessaloniki, for another year, main street retail interest was
by prospective tenants. To some extent, it was the consequence concentrated on Tsimiski Street and Mitropoleos Street, with
of bid-ask spreads since the perception of the former regarding vertical connecting streets also drawing attention although
rents in many cases differed considerably from those of owners still limited in comparison to the main retail streets of the city.
having properties in the area. To this contributed the fact that A bit further from the seafront of the city, Egnatias Street also
as transportation in the centre of the city is tilting towards the attracted gradually increasing interest during the year. This
use of the underground rail network, the fact that Kolonaki retail was due to the rising awareness of the positive effects that
market is at an elevated area in comparison to other competing the Thessaloniki metro rail network will have on consumer and
locations such as Voukourestiou Street or Ermou Street, making visitor mobility, consequentially giving a positive push on the
access slightly difficult. This has partially limited the attraction retail market of the city.
of the area, especially when combined with the lack of high-end
Numerous leases were recorded throughout the year with the
retailers in the area which used to attract consumers in the past.
following being among the notable transactions.
Elsewhere in Athens, where the effect of increased tourist • C laire’s opened a new store at 21 Agias Sofias Street
flows is has not been so direct, the picture was slightly • Sloggi opened its first Sloggi branded store, located in
different during the year although gradually more positive. In Mediterranean Cosmos Mall

RETAIL MARKET
• INGLOT opened a new store at 66 Tsimiski Avenue • A cquired an approximately 2.000sqm commercial property at
• P rotergia opened a new store at Mitropoleos Street Evridamantos Street and Lagoumitzi Street in Neos Kosmos,
• A new PUMA Store opened its doors at 36 Mitropoleos Athens
Street
Grivalia
• N ak opened a new store at the intersection of Tsimiski and
Aristotelous Streets
• A cquired a 4.457sqm commercial building on 5 Grigoriou
Lampraki Street in Glyfada, of which 2.025sqm are dedicated
• A nel opened a new store at Tsimiski Avenue, moving from
to retail and offices uses
its previous location At the intersection of Tsimiski Avenue
and Karolou Dil Street Trastor
• P iraeus Bank opened a new “e-branch” at 80 Tsimiski • A cquired a 90sqm fully leased retail unit at 6 Panagitsas
Avenue Street in Kifissia
• A new IQOS store opened its doors at Tsimiski Avenue, near • A cquired a 1.600sqm office and retail building at 194
Aristotelous Square Kifissias Avenue in Chalandri, with 901sqm over ground
• A new Pull & Bear store opened at Tsimiski Avenue • A cquired a 700sqm retail property at Skalidi Street in Chania,
The combination of increased interest and opportunistic Crete
tendencies exhibited both some owners and prospective Finally, investors were particularly interested in distressed
tenants, contributed to markedly increased rents being situations having a strong real estate component, with two
considered normal in some cases. characteristic cases playing out during the year:
• T he agreement through through which Pillarstone (KKR) will
assume the servicing of over €150 million debt and will
LARGE RETAILERS jointly invest on Notos Com Holdings with the four Greek
Big retailers were quite active during the year, with systemic creditor banks, as part of an agreement through
the following being some of the notable cases. which Pillastone will support the restructuring of Notos
• Jysk increased its store count from 13 stores near the end of • F olli Follie, a retail goods company with presence across
2017 to 22 by the end of 2018 and is planning to increase the Greece and internationally, came across serious financial
figure to 40 stores according to its 5-year strategic plan trouble. With its debtholders pressing for a restructuring,
• L eroy Merlin opened its fifth store in April 2018, with another its retail presence and especially its equity stake in Attica
two expected to open their doors in 2019 Department Stores drew investor interest from both its
• S PAR reentered the Greek market in 2018 and brought 17 existing shareholders but also foreign retailers.
stores under its name, despite its initial plans for 80 by the
end of the year. It is planning to cover the distance in 2019
• Z ara also increased its store count but at a slower pace than RENTS
others, already having presence in the majority of large cities Athens
throughout Greece. Its store count changed from 43 stores Overall, retail property rents In Athens remained relatively stable
by mid-May 2018 and 47 by mid-February 2019 during the year, with increases being recorded in prime areas.
In terms of notable acquisitions of retail properties during the year, In the centre of the city and primarily in the area of Ermou and
some notable transactions performed by local REICs stood out. Kolonaki, by the end of 2018 prime rents were between €120
and €165/sqm/month, but it should be that for smaller retail
Pangaea REIC
units which attracted a great number of alternative tenants,
• A cquired a 1.608sqm listed property at 66-68 Mitropoleos
there were cases where higher rents were recorded. Also, as
Street and Kapnikareas Street
most of the units in prime locations were leased in the previous
• A cquired a 736sqm retail and residential property at 66
years, their rents are not directly comparable to rent levels at
Andrianou Street and Aeolou Street in Athens
which a property would be leased at 2018 year-end.
• A cquired a 2.525sqm property at 66 Ermou Street in Athens
• A cquired a 1.086sqm listed retail property at Kanari Street
and Solonos Street in Kolonaki, Athens
• cquired an approximately 6.900sqm office and retail
A
property at Syngrou Avenue and Lagoumitzi Street in Neos
Kosmos, Athens

RETAIL MARKET
Figure 10 - Prime Retail Rents - Athens & Subs YIELDS

275 Athens
250
During 2018, prime retail yields in Athens dropped and were
225
in the range between 6.50% and 7.25%, while for few highly
200
175 attractive cases and special transactions, yields even lower than
150 6.50% were recorded during the year.
125
100
Figure 12 - Prime Retail Yields - Athens & Subs (%)
8,0
75
50
7,0
25
0
6,0
20
20
20
20
20
20
20
20
20
20
20
20
20
08
11
14
15
10
12
13
18
06
07
09
16
17
5,0
High Street Retail Shops (other main markets)
High Street Street Retail Shops (Ermou - Kolonaki)
4,0
20
20
20
20
20
20
20
20
20
20
20
20
20
08
11
14
15
10
12
13
18
07
09
06
16
17
In other high interest areas such as prime locations of Kifissia This was to some extent due to the fact that similarly with
and Glyfada, rents were between €80 and €110/sqm/month. the office market, some investors were genuinely confident
Overall, it should be noted until the end of 2018 that there regarding the prospects of market, thus acquiring prime
continued to be increased interest to lock in the current low properties at genuinely low yields given the current level of rents.
rents at which good locations could still be leased, although this Having the expectation that the market will record rent
was always in conjunction with the desirability of each location. increases in the mid-term which in turn will support the upside
Additionally, since the majority of prime locations had already potential of their acquisitions, some investors went ahead of
leased at lower rents during previous years, new leases were the market bidding higher than what the market can currently
often for properties that remained empty and not part of the top offer; the aim not necessarily being to earn rents from the
end. Finally, new leases of smaller retail units at higher rents properties but capital appreciation in the coming years. It will
were not necessarily representative of a local retail property not necessarily be proven wrong, despite the inherent risk.
market in its entirety.
Thessaloniki OUTLOOK
In Thessaloniki, by the end of 2018 prime rents at Tsimiski The retail property market in Greece is expected to continue
Avenue were in the range between €75 and €120/sqm/month recovering during 2019, although the digital transformation
while for prime locations at Mitropoleos Street they ranged currently taking place and the interplay between main street
between €30 and €50/sqm/month. Finally, for locations at shopping and malls will keep affecting shopping patterns.
Egnatias Avenue they were between €25 and €45, recording The improvement of retail market conditions are expected to
small increases in comparison with last year. provoke further rent and value increases, with the next phases
of a recovery feeding the expectation that, lower profile retailers
Figure 11 - Prime Retail Rents - Thessaloniki
will be replaced by others who will be able to pay higher rents.
125
100 Over the medium term, as new store formats and ways of
in-store ordering such as touchscreen ordering, QR codes, and
75
retail stores without cashiers will have an impact on the speed
50 at which retail activity takes place consequently increasing the
25 capacity of retail locations to serve larger numbers of visitors.
Especially in Greece where there is a considerable focus on
0
food and beverage retail, a change in shopping pattern might
20
20
20
20
20
20
20
have a serious effect on the retail property segment, with

13
16
15
17
18
12
14
Egnatia Mitropoleos Tsimiski fast food restaurants and convenience stores being the first
Source: EPS R&A Division candidates to experience this change. Of course, it might take
some time until those changes reach Greece.

LOGISTICS MARKET
LOGISTICS
DEMAND & SUPPLY them to the build-to-suit option offered by many developers in
The logistics sector in Greece remained on a growth path in this segment.
2018, with the economy in recovery mode and the country’s
Besides land plots, older properties of lower specifications were
port and rail infrastructure attracting increased investments. As
among candidates for redevelopment as demand for them in
it gradually becomes a primary contributor to the country’s GDP,
their current condition was limited. This was a point of interest,
measures are taken in order to standardize the framework in
especially given that many of them were in locations considered
which industrial and logistics businesses operate.
advantageous, and their acquisition price could justify the
The enactment of a modern legal and regulatory framework redevelopment cost.
which takes gradually takes place, enables the creation of a
During 2018, a number of users moved to new facilities, either
better context in which to locate and operate industrial and
owner-occupied or leased.
logistics activities.
• Praktiker Hellas started using its new 14.000sqm logistics
One of the topics of interest for investors is the solution of issues centre in Aspropyrgos
related to unofficial industrial concentrations across the country, • O lympos expanded its existing storage and logistics space in
which in essence is related to themes such as waste management, Makrichori, Larissa
location specifications and permitted uses among others. • Isomat expanded its industrial logistics facilities in St.
Athanassios, Thessaloniki
The first area which will benefit from an undated framework is • W ürth Hellas S.A. moved its logistics facilities to a 3.000sqm
the unofficial industrial concentration of Oenophyta. Through space in Avlonas
the creation of Oenophyta Rehabilitation Business Park, the • L idl inaugurated its upgraded logistics facilities in Trikala,
€250million project will enable the construction of the required one of its four logistics centres in Greece.
infrastructure and assign additional 50 hectares to logistics • A B Vasillopoulos completed its new supermarket in Grevena
uses. The next area which is expected to benefit from the • K ri-Kri completed the expansion of its cooling chambers in
new framework is the industrial concentration in Kalochori, its logistics facilities in Serres
Thessaloniki. • P harOS, a pharmaceutical company, moved to its new
premises at Lesvou Street in Metamorphossi
As the areas where industrial and logistics activities are
situated, in Oenophyta, Thriassion, Thessaloniki and At the same time, Greek REICs were also active in this segment
elsewhere, are gradually are gradually upgraded, combined during the year.
with infrastructure investments which are planned or have • N BG Pangaea REIC acquired three warehouses in
started to take place in Greek ports, and the upgraded rail and Aspropyrgos, the first ones to be included in its portfolio.
road network, a better connectivity will become a reality and • A lso, Fourlis Holding applied for a REIC license in November
combined transports will become easier. More specifically, a and is expected to exhibit an active focus on logistics
gradually improving context of operation provides additional properties.
assurance to investors who would like to choose Greece to • B riq acquired a 2.000sqm warehouse building at 123
locate factories or logistics hubs, with laws such as 4512/2018 Kifissou Avenue, in Aghios Ioannis Rentis
and 3982/2011 contributing to the creation of the necessary
Finally, urban logistics locations also attracted interest, especially
conditions.
from users trying to optimize their last-mile logistics activities.
While to a large extent, still a mainly owner-occupier market, Despite the lack of readily available spaces in many areas, the
overall activity in the industrial and logistics property segment adequate stock of older buildings made conversion a viable route
was at healthy levels during 2018, with increased demand for for some users.
both land plots for development and warehouse buildings, from
both users and investors. RENTS
Attica
Users were interested for modern specification space which in At the end of 2018, rents for prime logistics spaces in Attica
many cases was not readily available, in consequence leading increased and were in the range between €3.25 and €4.00/

LOGISTICS MARKET
sqm/month, while in specific cases even slightly higher figures Figure 15 - Prime Logistics Yields - Attica
11,00
were recorded.
10,00
Figure 13 - Prime Logistics Rents - Attica
8,00 9,00
7,00 8,00
6,00
7,00
5,00
4,00 6,00
3,00
20
20
20
20
20
20
20
20
20
20
20
20
08
11
14
15
10
12
13
18
07
09
16
17
2,00
1,00
0,00
20
20
20
20
20
20
20
20
20
20
20
20
08
11
14
15
10
12
13
18
07
09
16
17
OUTLOOK
The outlook of the industrial and logistics property segment is
Thessaloniki positive but dependent on the large scale projects which are
Similarly in Thessaloniki increases were also recorded with
currently realized or in the planning phase.
rents ranging between €1.75/sqm/month and €2.50/sqm/
month. Users will continue seeking high quality assets and those are
Figure 14 - Prime Logistics Rents - Thessaloniki the assets they will pay for, while lower quality ones will remain
3,00 good as candidates for redevelopment.
2,50
The creation of new logistics hubs will to some extent
2,00 redistribute demand and supply across the country, but
1,50 given the rising role of Greece as a transport hub for goods
1,00 and commodities between Europe and the rest of the world,
0,50
increases in one area will not necessarily be losses for another.
0,00
20
20
20
20
20
20
15
17
16
13
14
18
YIELDS
Attica
Yields for prime logistics spaces in Attica dropped further in
2018, hovering between 9,75% and 10,25%. Again there were
few cases where lower yields were recorded. For non-prime
logistics assets yields in the range of 11,00% to 12,00% were
considered normal. Of course, given varying desirability of
various locations and issues regarding suitability, there was an
effect on yields, in some cases creating a “gray zone” between
prime and secondary property yields.
Thessaloniki
In Thessaloniki, yields for prime logistics spaces also dropped
and were in the range between 10,50% and 11,25% by the
end of the year, recording a decrease in comparison with 2017,
while for secondary assets yields were between 11,25% and
12,50%.

RESIDENTIAL MARKET
RESIDENTIAL
DEMAND & SUPPLY besides their proximity metro stations or tourist attractions,
After another year that was marked as a high point in tourism, can double as law firm, medical or other professional practice
the tendency to convert apartments into short-term rental offices.
residencies continued from strength to strength in 2018.
Other high interest areas, including Psyri also attracted interest,
In areas which have attracted great interest, the effect of Airbnb but their character as less residential in comparison, meant
has been profound so far, providing an alternative source of that interest for such units could mainly materialize through
revenue for many owners, which in many cases is much higher conversions of older office or light industrial buildings.
than that from a long-term lease. This has consequently fed high
hopes in a large share of owners in the affected areas. Many have Other areas of the city attracting interest were in the south
withdrawn their properties from the long-term lease market and suburbs i.e. Glyfada, Voula and Vouliagmeni, while in general,
now offer them as short-term rentals. In some areas the effect was locations near the seafront and having proximity to the Hellenicon
so prevalent during 2018 that availability of smaller apartments for regeneration project were also high in the shopping list.
long-term leases was genuinely limited. At the same time, asking
Foreign investors, in some cases chose to acquire multiple
rents in those areas for a large share of properties that remained
properties at the current, still quite low prices, creating focused
available for a long-term lease were fast approaching mid-2006 to
demand for properties in certain areas. With the aim often being
mid-2008 levels, while for apartments smaller than 50sqm, asking
to refurbish and resell later at much higher prices, while having
rents often reached and in some cases even exceeded those
a short term rental income in the mean-time, buyers often
figures by the end of the year.
completed such transactions during 2018.
At this point, it should be highlighted that in areas where
Increased investor interest in certain areas has already started
apartments double as short term rentals, often those units are
to have a positive effect on prices as refurbished apartments
offered furnished for long term-leases, while at the same time
re-enter the market as income producing properties. The
this category of apartments is often refurbished in the last five
consequence has been a spill-over effect in the form of
years as a means of becoming more competitive in the short
demand from both users and investors for other areas which in
term rental market. Thus, the rent differentials recorded are
comparison remain considerably cheap.
justified to some extent.
On the other hand, as some owners and investors have become
Increased revenues from short-term rentals have attracted a
excited with short-term rental income, the influx of properties in
great number of investors in the residential property segment.
that market has affected supply considerably, leading to lower
For them, the slump of the Greek property market has been
revenues for some owners. Since more competitive properties
the ideal entry point in order to acquire properties of all types,
than theirs enter the market for the same rent, there are cases
for prices which in many cases were lower than 40% from the
where a lower short term renal rent is the solution in order to
levels recorded in the peak of the market.
retain high occupancy.
Investor interest in the residential segment has been amplified
Furthermore, the dependence on tourism has made those
by the Greek golden visa programme which, at €250.000
properties, a bit more sensitive to short term fluctuations
is considered a quite affordable entry ticket, giving non-EU
while at the same time, the lack of time on the owners’ part, to
citizens and their families access to European countries.
manage their properties has created a business opportunity for
The areas which ranked high in terms of demand from investors dedicated companies acting as managers and this this imposes
looking for residential assets that could be converted into short- a cost.
term rentals, were those near destinations of tourist interest.
Finally, the fact that this market has been active and profitable
Those areas included Plaka, Thsissio, Koukaki, but also Mets,
for some time and that property numbers having reached a
Neos Kosmos, Ampelokipi and Pangrati due to spill-over effects.
critical mass, has been a major driver which motivated the
At the same time, residences in Kolonaki and other adjacent government to prepare the required infrastructure in order to
areas attracted much attention especially those cases which have a better oversight and of course to tax short term rentals.

RESIDENTIAL MARKET
As a consequence, the aforementioned factors in combination • A ntigon Urban Chic Hotel at 15 Antigonidon Street
with the considerably positive effect on long term lease rent • B ahar Boutique Hotel at 10 Edessis & Katouni Street
levels during 2018, led some owners to be relatively indifferent • T he Mood Hotel at 31 Katouni Street
as to the source of their residential property revenue, either
from short-term stays or a long-term lease. During the year investors were actively seeking buildings in
central locations, especially examples with distinctive design
With the residential property market in the centre of the city features. A positive fact was that by the end of the year, there
being affected by the short term rental trend and the golden was still an adequate number of such buildings in the centre
visa programme, local buyers gradually become increasingly of the city providing investors with alternative candidates to
interested in other areas, such as the northern suburbs of the acquire.
city. Although traditionally more expensive than locations of the
centre, remain relatively more affordable due to the short rental At the same time, in the local residential market, locations
effect in the centre of the city. This contributed to a quite healthy overlooking the seafront of the city traditionally attracted
transaction volume during 2018. Such areas included Kifissia, greater interest from prospective buyers, a non-neglible
Psychiko but also other areas with more attainable residential share of who were foreign. Although such properties had not
properties having seen a serious drop in prices over the past been battered by the crisis similarly to other areas and due
decade. to position they were quick to start recovering, it has been in
other parts of the city where the search for properties could
Investor interest in the residential still offer deep discounts by the end of the year. Buyers were
segment has been amplified by the often interested for areas relatively far from the centre of the
Greek golden visa programme which city such as those in the west suburbs such as Evosmos, where
given low prices allowed many users to become owners during
is considered a quite affordable entry
2018, while other areas such as Perea also attracted interest,
ticket, giving non-EU citizens access both as residences and as investment assets. It should be noted
to European countries. though that the increased volume of transactions non-central
locations during 2018, did not have a considerable impact on
Thessaloniki
prices in those areas, contrary to what happened in the centre
Also affected by the short term rental trend recorded in Athens
of the city.
and in almost all tourist destinations in Greece, Thessaloniki
experienced increased interest for residential properties Finally, in Chalkidiki, a main summer destination for Balkan
intended to be used as short terms rental assets. A direct tourists, increases numbers of residential property transactions
consequence of increased tourism figures and the changing were also recorded during the year, although the effect on
seasonal patterns due to also becoming a city break destination prices has been relatively limited in most cases due to a large
is the considerably increased attention drawn to the centre of stock of properties remaining unsold by the end of the year.
the city.
Vacation Destinations
The lack of an adequate stock of available houses to cater for Enjoying the benefits of increased tourism, seaside destinations
the short term rental segment, besides creating an imbalance of the mainland as well as island destinations saw considerable
in the residential market of the centre of the city, it has also increases in demand during the year. Short-term rental
contributed to another trend which continued from 2017. During platforms have given to both visitors and prospective buyers
2018, there was intense interest for the conversion of old valuable insights regarding the local residential property stock.
buildings into boutique hotels. Many of them listed and some In consequence, they have been a factor which contributing to
of empty for decades, such buildings were often bought at increased activity in the leisure residential segment of various
deeply depressed prices. After being renovated and converted local property markets.
into boutique hotels, they have breathed new life to secondary
streets and neighbourhoods of the centre creating new clusters. While the most highly regarded tourist destinations continued
on a positive momentum during 2018, which supported the
A number of such hotels opened their doors in 2018, creating buoyancy of the local property markets, other destinations
offerings for a wide spectrum of clients. Among them were also captured the attention of buyers. Destinations in the
characteristic cases such as Peloponnese, Cyclades, Dodecanese, Crete and the Ionian

RESIDENTIAL MARKET
islands, all attracted both mainstream and niche property Athens, residential property prices increased by 1.9%, while in
seekers, offering them a diverse set choices in terms of Thessaloniki the respective increase was more than double that
landscape, character and cost of acquisition. figure, although it should be noted that there some variability
is inherent in the data of the area, increasing the probability for
In the high-end leisure residential segment, bespoke residencies
short term reversals.
in destinations still offering post card views without the clutter
and peak of the season congestion remained a must-have. Areas attracting higher interest ranked higher in terms of
increases while most others were stable or recorded small
PRICES decreases. In urban centres, larger properties still exhibited a
Residential property prices, as recorded by the Residential relative lag in their positive response to the economic recovery
Property Price Index of EPS, increased during 2018. as did areas in mainland Greece where local economies are still
hurdled by limited sources of income and indebted businesses
More specifically, an increase of 3.1% was recorded in 2018. In and households.
EPS Index EPS Residential Price Index

110,000
100,000
90,000
80,000
70,000
60,000
50,000
20164
20084
20094
20104
20114
20124
20184
20074
20144
20154
20174
20134
Greece Athens Thessaloniki


RESIDENTIAL MARKET
OUTLOOK CONCLUSIONS
The outlook for the residential segment is positive. If no deep
downward reversal is recorded in the near future, it might be Overall, the Greek economy and its property market are
safe to say that overall, the Greek residential property market experiencing a comeback. Vacancies, rents, yields and values
reached its bottom in the third quarter of 2017 and from that improve, part due to the improving fundamentals and part due
point forward it started growing again. to positive expectations regarding the prospects of the market.
The residential property segment will gradually benefit from a On the other hand, a the slowdown of European economies
lower unemployment rate, improving credit conditions and the might delay the recovery of the Greek economy and its property
better management of personal debt exposures through a better market, as will other external shocks. Nevertheless, as the
legal and regulatory framework regarding personal default. Greek economy is turning around, its assets remain very
competitively priced, especially in comparison to other markets
As the recovery of the economy and the residential property
of Europe which potentially find themselves at the peak of their
market in Greece is dependent on tourism, shocks affecting
cycle and this is something worth taking into account.
hospitality revenues might have an effect on both the economy
and residential properties in the coming years. The effect of As infrastructures in Greece gradually become better through
external events such as a slowdown of the European economy current and future investment and as the structural reforms of
and of a hard Brexit on Greek tourism and the short term rental the economy continue, the country will have the potential to
market might not be negligible if they come to be. create the required conditions for a lasting recovery. The latter
will contribute to attracting and keeping long term investors,
Additionally, infrastructures at peak use in main tourist
whose presence the country needs.
destinations highlight that there might be a cap which, when
exceeded, might start slowing down demand for those
destinations.
Overall, it should be noted that a trend will continue. Many

buyers, especially local, actively search the market for cases
of clear mispricing. In essence, they search for properties with
good characteristics, which have been out of favour for long
due to the financial crisis. Such properties existed and remained
genuinely cheap during 2018 and this will continue in 2019 as
well. A main fact that supports the argument is that during the
year, the widespread trend of residential repairs recorded in
2018 was not only in residential areas affected by short term
rentals and the golden visa programme.
Of course, while the fact that the economy and the job market
have not yet recovered, with unemployment being over
18.5% during 2018, highlights the argument that there might
be imbalances in some areas which are sustainable due to
the short term rental wave but also that low prices recorded
have not been a coincidence. At the same time, it highlights
the argument supporting the strong potential of the market
to absorb considerable price increases as conditions in the
economy further improve.

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Eurobank Property Services S.A.

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Disclaimer
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to any other person. Each person that receives a copy by acceptance thereof represents and agrees that it will not distribute or provide it to any other person. The
information contained herein is not an investment, legal, tax or other advice. This report is not an offer to buy or sell or a solicitation of an offer to buy or sell, or
in general an offer or solicitation for any transaction. Eurobank Property Services and others associated with it may have positions in, and may effect transactions
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herein. The investments discussed in this report may be unsuitable for investors, depending on the specific investment objectives, needs, investment experience
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Property Market

Annual Report 2018

The present advertising brochure

You can contact us in order to discuss solutions

to the short-term growth prospects of the -4,0

counterbalance to its enormous government Source: Hellenic Statistical Authority

Figure 2 - Unemployment Rate (%)

downward path. Over the past 24 months,

While the average unemployment for 2016

limited number of job creating investments Source: Hellenic Statistical Authority

Greek Property Market - Annual Report 2018 p 03 March 2019

Tourism receipts, according to figures published by the Bank

Fuel consumption has been on a positive trend since the first

Focusing on department store consumption, there was no

Greek Property Market - Annual Report 2018 p 04 March 2019

Greek Property Market - Annual Report 2018 p 05 March 2019

Greek Property Market - Annual Report 2018 p 06 March 2019

The electrification project of the rail line connecting Athens

At the same time, the invitation process for the future

Gkonos military camp

Greek Property Market - Annual Report 2018 p 07 March 2019

Greek Property Market - Annual Report 2018 p 08 March 2019

Greek Property Market - Annual Report 2018 p 09 March 2019

Greek Property Market - Annual Report 2018 p 10 March 2019

Greek Property Market - Annual Report 2018 p 11 March 2019

Sefssipou Street in Kolonaki, with office and retail uses 15,0

Briq REIC 10,0

• A cquired a 1.788 office building with 1.403 over ground, at 5,0

Greek Property Market - Annual Report 2018 p 12 March 2019

YIELDS Figure 9 - Prime Office Yields - Thessaloniki (%)

retrofitting trend which is currently recorded.

Source: EPS R&A Division

It is a fact though that, as the stock of existing available

A positive medium term trend in rents is expected to be

Greek Property Market - Annual Report 2018 p 13 March 2019

Greek Property Market - Annual Report 2018 p 14 March 2019

Greek Property Market - Annual Report 2018 p 15 March 2019

Greek Property Market - Annual Report 2018 p 16 March 2019

Figure 10 - Prime Retail Rents - Athens & Subs YIELDS

have a serious effect on the retail property segment, with

Greek Property Market - Annual Report 2018 p 17 March 2019

Greek Property Market - Annual Report 2018 p 18 March 2019

Source: EPS R&A Division

Greek Property Market - Annual Report 2018 p 19 March 2019

Greek Property Market - Annual Report 2018 p 20 March 2019

Greek Property Market - Annual Report 2018 p 21 March 2019

EPS Index EPS Residential Price Index

Greece Athens Thessaloniki

Greek Property Market - Annual Report 2018 p 22 March 2019

Overall, it should be noted that a trend will continue. Many

Greek Property Market - Annual Report 2018 p 23 March 2019

GREECE Romania Serbia

Eurobank Property Services S.A.

Greek Property Market - Annual Report 2018 p 24 March 2019

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• A cquired a 1.788 office building with 1.403 over ground, at 5,0