1. 4, Nikitara & Psaron str.
152 32 Chalandri
Athens, Greece
tel +30 210 6811760
fax +30 210 6811722
www.naiglobal.com
The first quarter of 2014 confirmed the positive signs highlighted in 2013
for the Greek Economy. The surplus in the Government Budget led to the
decrease in the spread between the Greek Government Bond and the
German Bund at 500 bps, the lowest since 2009. Furthermore the
announcement of Greece returning to the money markets after 4 years
with the issuance of 5 year Gov. Bonds in Q1 of 2014 reduced the spread
to 450 bps and reinforced confidence in the Greek Economic recovery.
The steady improvement of the Greek Economy is gradually affecting
the Real Estate Market. Rents and Yields for the CBD and most of the
traditional office locations in Athens remained stable in 2013. Between
Q1 of 2013 and Q1 of 2014 the property market in Athens witnessed
several office relocations of big companies to bigger and better space.
Tenants with negotiation power were the first to take advantage of Grade
A quality accommodation at lower rent. Owners/investors are now
negotiating lease terms and rent and offer better incentives to potential
tenants. As the Athens office market is starting to recuperate, the
opportunity of refurbishing part of the large amount of Grade C and D
office space is becoming more apparent.
MARKET SNAPSHOT
Macroeconomics Indicators
Current
GDP (Q4 2013)
CPI (April 2014)
Unemployment
(Q4 2013)
-2.3%
-1.30%
27.50%
Change from
Last Period
Office Market Indicators
May 2014
Grade A
Prime Office Rent
Grade A
Prime Office Yield
Grade A Prime
Office Vacancy Rate
2€ 16/m
8.25%
2.00%
Change from
Last Year
Macro-Economic Overview
Office Market Overview
Source: NAI Hellas
25
20
15
10
5
0
€
€
€
€
€
€
2010 2011 2012 20132009
9%
8%
7%
6%
5%
4%
3%
2%
1%
0%
7.00%
8.25% 8.25%
2Rent ( /m /month)€ Yield
Grade A Office Market - 5 years Overview
8.25%
7.50%
8.00%
Q1 2014
Athens Office
Market Report
2014
2. Transaction Costs
on Rent
Agency 1 to 2 months' rent or 8% to 12%
of annual rent
Lawyer ½ month to 1 month rent
on Sale
Agency 1% to 2%
Lawyer 0.5%
Notary Public 1.25%
Taxation
on Rent
VAT 23% of rent (some can be recoverable)
or Stamp Duty 3.6% on rent
Local Tax via the Electricity bill
on Sale
Transfer Tax 3%
Capital Gains Tax 15%
Owner's Incentives
Up to 4 month's rent free period
Some contribution to fit out work
Service Charges
€ €
Grade A, B office space
€ 5 to € 7 per m per month for above
average Grade A office space with security
2 to 4 per m per month for average2
2
ATHENS OFFICE MARKET HIGHLIGHTS
Significant Transactions Q1 2013 - Q1 2014
2
Grupo Dolphin agreed to a Sale of a 4,400m office building in
Kifissia for €4.5 mil at an implied yield of 10%.
2
Dolphino Capital bought the ex BNP Paribas Office of 6,000m on
Vas. Sofias Av from BNP Bank for €10.3 mil at an implied yield of
10%.
Eurobank Properties REIC and the Hellenic Republic Asset
Development Fund (Taiped) moved forward to a 20 year Sale &
Leaseback of 14 public buildings for €145.81 mil. The total gross
2
area leased was 189,000m for an annual rent of €14 mil, implying
an investment yield of 9.6%.
Pangaea REIC completed a 20 year Sale & Leaseback of 14
public buildings from the Hellenic Asset Development Fund
2
(Taiped) for €115.5 mil. The total gross area was 200,000m
leased for an annual rent of €11.5 mil implying an investment yield
of 10%.
Monumental Plaza on Kifissias Av, Marousi in 2013 welcomed
2 2
Leroy Merlin in 1,000m and Pharmathen in 4,000m .
2
Sony Hellas SA moved to 1,500m at the Arcania Business Centre
on Amarousiou-Chalandriou Str., Marousi.
2
Ernst & Young rented 6,000m in the ex Unilever Building on
Chimaras Str, Marousi.
Kraft Foods relocated to 19/21 Aristotelous str, in Metamorfosi on
2
4,000m .
Mars Hellas moved to the Intracom complex in Paiania, Lavriou
Av.
Diolkos Building on Kimis Av, in Kifissia, in 2013 welcomed
2 2
Unilever in 4,400m , Leo Pharma in 2,000m and BMW in
2
2,000m .
2
BBDO relocated to 2,000m on Marinou Antipa in Herakleion.
Globo Technologies rented 2 floors on Ethinikis Antistaseos,
2
Chalandri of 1,000m .
Vodafone rented ayxiliary space in Lykovrysi in a converted
2
industrial building of 6,000m in total.
Sales
Lettings
Anangel Shipping SA is waiting for its new building in Kallithea,
2
Southern Athens of 10,000m .
Diamantidis Shipping are also preparing a second building in
2
Palaio Faliro of around 5,000m .
Attiki Technodomiki will deliver a 2 floor building on 247 Kifissias
Av in Kifissia by the end of 2014.
Vagenas Construction & Famous Estate SA has started
development of a plot of land on Kifissias Av. 345 in Kifissia of a
two-floor and a three-floor office block.
Athens Office Market – New Construction 2014
3. W
C
N
S
P
Athens International
Airport
Piraeus
Kifissia
Glyfada
Petroupoli
Keratsini
Chaidari
Acharnes
Pallini
Koropi
Paiania
Markopoulo
Pikermi
Vironas
Ag. Paraskevi
ATHENS OFFICE MARKET
City Centre
Alexandras Av.
Patision Av.
Piraeus Av.
Vas. Sofias Av.
Ampelokipi
National Rd
Petrou Rali Av.
Iera Odos Av.
Thivon Av.
Athinon Av.
Kifissias Av.
Mesogeion Av.
National Rd
Attiki Odos
Sygrou Av.
Faliron
Vouliagmenis Av.
Poseidonos Av.
Piraeus Av.
Akti Miaouli Av.
Akti Tzelepi Av.
Akti Kondili Av.
Kononos str.
Ag. Dionisou str.
Kastoros str.
Athens Centre (C) Athens West (W) Athens North (N) Athens South (S) Piraeus (P)
2
In the greater Athens area the total Grade A and B office stock is c.1.8 mil m mostly concentrated north and in the wider CBD
area. The consecutive fall in rental values since the credit crunch in 2008, led to Grade A and Grade B office accommodation in
prime locations becoming more affordable. The outcome of this imbalance created an increase in Demand for Grade A quality
space in prime locations and an excessive supply of Grade C and Grade D space. Potential tenants that cannot find suitable
office space in Grade A buildings are turning to Grade B by upgrading the space to their requirements in return for rent free
periods, prolonged escalation period and/or reductions in rent. As such there is little supply of and high demand for Grade A
and B offices in the city of Athens, especially in prime locations, while on the other hand there is large supply of and almost zero
demand for Grade C and D office space. Vacancy rates of Grade A and B buildings are much lower than the vacancy rates of
ageing Grade C and D offices.
Supply & Demand
Office Stock Allocation Per Area
(Grades A & B)
Athens Grades A & B Stock, Vacancy Rate
500
450
400
350
300
250
200
150
100
50
0
9
8
7
6
5
4
3
2
1
0%
%
%
%
%
%
%
%
%
%
VacancyRate(%)
2Stock(000'sm)
Athens Centre (C) Athens West (W) Athens North (N) Athens South (S) Piraeus (P)
2Grade A (m ) 2Grade A (m ) Grade A (%) Grade B (%)
Source: NAI Hellas on-site inspections
Athens Centre (C)
Athens West (W)
Athens North (N)
Athens South (S)
Piraeus (P)
Source: NAI Hellas on-site inspections
