Street retail in Athens: focus on the center and prosperous suburbs
Since 2010, the Greek government has taken many measures to reduce public debt and budget deficits. They have already brought the first results: according to the IMF estimates, GDP growth in 2017 was 1.8%, and in 2018 it will increase to 2.6%. This is the right moment to invest in Greek real estate: the country’s economy is gradually recovering, and the real estate market has reached the bottom and will soon start to grow.
Against this background, the retail real estate sector comes to life: new players are entering the Greek retail market. In order to minimize risks, investors prefer to choose high-quality objects in the premium locations of Athens.
The main markets of Greater Athens
The main trading artery of Athens is the pedestrian Ermou street in the Monastiraki area. Here are located stores of international brands of the average price category. Other popular locations with retailers are Panepistimiu, Patision, Stadio and the fashionable neighborhood of Kolonaki, where there are many fashion boutiques and restaurants.
Real Estate in Athens
Most of the buildings in Kolonaki were built in the 1960s. After 30 years, this part of the city turned into a prestigious area populated by the most affluent residents of Athens Photo: macrolepis / Wikimedia
In the northern suburbs of Athens, most of the outlets and restaurants are concentrated in Kifissia, Marousi, Nea Ionia, Neo Psychiko, Nea Eritrea and Halandri. Peristeri and Egaleo stand out among the western suburbs, where the stores of popular brands for low-income buyers are concentrated. To the south-west of Athens, Piraeus is a thriving retail real estate market, the service area of which is about 500 thousand people. Shops are concentrated on the three main streets – Iron Polytechniu, Vasileos Gheorghiu and Sotiros. The main shopping areas to the south of Athens are located in the suburbs of Glyfada, Kallithea and Nea Smyrni.
Real Estate in Athens
Glyfada – the southern suburb of Athens, popular with wealthy residents of the capital. Local Beach Awarded Blue Flag Award Photo: Mister No / Wikimedia
Supply and demand
According to a study by the Hellenic Confederation of Commerce and Entrepreneurship (Hellenic Confederation of Commerce and Entrepreneurship, ESEE), 69% of entrepreneurs in the field of trade in Greece rent the occupied space and only 31% own it.
The high occupancy rate of retail space in Athens is due to a limited supply: new properties are rarely built, since construction permits are issued for a long time and banks are reluctant to finance development projects. According to NAI Hellas, in Greece, the lowest in Europe is the rental rate of shopping centers (Gross Leasable Area, GLA) – 55 m² per 1,000 people. In most cases, the owners of shopping centers go to the expansion of existing space in order to meet the needs of large brands. By 2020, additional 200 thousand m² of retail space will appear in Greece – including through the redevelopment projects of 14 regional airports privatized by Fraport.
Shops on central streets are popular with tourists and make a serious competition to shopping centers. According to the research organization Urban Land Institute, the share of vacant premises on the central streets of Athens and in popular suburbs is less than 5% for street retail facilities and less than 4% for shopping centers.
In general, retail in Greece continues to attract a significant share of investment: about 38 million euros in the fourth quarter of 2017, and 35% of them accounted for transactions with commercial real estate. According to NAI Hellas, the investment company Grivalia Reic became the most active buyer in the last three months of 2017, purchasing two supermarkets in Athens, a store in Piraeus and two boutiques in Nea Eritrea. The largest deals in 2017 were the purchase by the investment company Pangea Reic of four Sklavenitis supermarkets for 47 million euros and the acquisition by the international investment company Varde Partners of a 31.7% stake in Lamda Malls for 61.3 million euros.
Rental cost and profitability
According to Cushman & Wakefield, during 2017, the cost of renting premium street-retail in the central areas of Athens remained stable and increased on Ermou Street (20.5%) and in Piraeus (7.1%). Shops in Athens surrendered on average for 75 euros / m² per month in Piraeus, 90 euros / m² in Kolonaki, 115 euros / m² in Kifissia, 120 euros / m² in Glyfada and 235 euros / m² on Ermou Street.
Real Estate in Athens
Ermou is the most expensive shopping street in Athens and, according to a study by Cushman & Wakefield’s Main Streets Across The World 2016/2017, it ranks 25th in the list of the most expensive shopping streets in the world. According to the Urban Land Institute, the average monthly turnover of branded stores on Ermu Street reaches 10 thousand euro / m².
According to NAI Hellas, supermarkets with an area of less than 3 thousand square meters in Attica are available at a price of 8 to 18 euros / m² per month, and hypermarkets with an area of more than 3 thousand square meters range from 7 to 14 euros / m². Rental of space in shopping centers can vary from 9 to 20 Euro / m² for large tenants (from 2 thousand m²)