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Greece Real Estate Market View

Nicky Simbouras • 1/17/2023
Greece’s economy will remain ahead of the major eurozone economies going into 2023, with GDP growth forecast to reach 6.2% in 2022 and 1.5% next year, according to the Bank of Greece. Despite the slowdown of most of the European markets, the Greek commercial real estate investment volume reached a record high of €1.65 billion in 2022, representing a 40% increase y-o-y.
The total hotel investment volume in 2022 is estimated at €700 million, in total 40 deals involving purchases of existing hotels, buildings for hotel conversions and land for hotel developments. This amount doesn’t include the acquisition of a stake in Greece’s Sani/Ikos Group by Singaporean sovereign wealth fund GIC in the biggest European hotel transaction since the COVID-19 pandemic.   
The office sector follows, with a transaction volume of €410 million in 46 transactions followed by retail attracting €327 million recording a 200% year-on-year growth, across 32 transactions. Core+ was the segment with the highest transaction volume at 51%, followed by value-add and opportunistic. The logistics & industrial sectors attracted investments of €100 million, while approximately the same amount was invested in land development acquisitions. 
Domestic REITs continue to be the leaders in deploying capital in the commercial property market in 2022, investing close to €400 million predominantly in hospitality, prime offices, and development land acquisitions, while €380 million refer to overseas capital, at lower levels than anticipated, given the global economic headwinds.
According to Cushman & Wakefield Proprius’s head, Nicky Simbouras, most of the trends summarised below that started in the post-pandemic environment of 2022 are set to continue in 2023, factoring in this year, the upcoming elections and the political risk involved, in view of possible government instability and unstable political scene after the elections:  
  1. Domestic investment has accounted for the majority of total transaction volumes, with international capital supplying significant amounts of equity capital mostly in the hospitality sector. The Greek real estate market benefits from a strong domestic private and institutional investor base. 
  2. High liquidity accumulated by households during the pandemic directly or indirectly affected the real estate market. With the gradual return to normality, consumption of goods and services increased as well as the investment in existing or new properties. 
  3. The retail real estate market is experiencing a resurgence after years of downturn. After the pandemic-led disruption of 2020 and 2021, investors and developers’ interest is back to the retail industry, with sales and footfall growth to be reported in prime markets.
  4. ESG criteria and sustainable developments are at the heart of occupier and investor strategy. Investors aim to certify their properties according to LEED, BREEAM, as well as other internationally recognised grading and benchmarking systems in sustaining asset values and demand.  
  5. Interest in Logistics will continue to be strong from domestic and international investors. We expect this trend to continue in 2023 as demand continues to exceed supply for well-located assets. The lack of available assets is responsible for low transactional volume while directing investors to purchase land or forward funding.   
  6. Major private development projects are expected to reshape markets. Interest is focused on the progress of the major development projects, including Hellinikon, which are expected to influence and redefine the office and retail markets. 
  7. Rebalancing in the investment market in favour of other types of assets that are less correlated to traditional real estate and economic cycles. Intense competition among real estate investment companies leads to a search for alternative categories, able to ensure higher returns such as serviced apartments student housing, senior housing, co-living, education, wineries etc.    
  8. The hotel market remains in focus due to the significant increase in tourism. Preliminary figures for 2022 show that the sector has almost fully recovered, reaching 2019 figures. Given the popularity of the sector, the tourism industry is anticipated to be in focus for 2023.
  9. Inflated construction costs, skilled labour shortages, and construction wage growth are to be monitored closely during 2023. Developers might be required to explore alternative cost-cutting routes with a further focus on cost control and risk assessment and process improvements. 
  10. Within 2023 office occupiers are expected to bring more clarity in relation to the space they will intend to occupy in the following years. Office take-up in 2022 totalled around 110,000 sq m,  25% above the previous year. This trend is expected to continue in 2023, with the bet now focused on the percentage of occupiers willing to agree to a pre-let agreement and a longer closed lease period.       

22 Feb 2022

Following a record high of around 50,000 Infections in early January due to the fast-spreading Omicron variant, infections have been easing also allowing authorities to ease the curbs. Music in restaurants and bars is allowed again and operating hours are extended. Those eligible to enter Greece without a test from 7 February are all travellers from EU and Schengen Zone member states as well as from the 33 non-EU countries and territories that have joined the EU Digital COVID Certificate system. Face masks are obligatory in most public places. Healthier tourist flows to Greece over the summer, helped the Greek economy reclaim a significant part of COVID-19-induced losses, according to the European Economic Forecast Winter 2022, forecasting overall real GDP to grow by 8.5 percent in 2021 by 4.9 percent in 2022 and by 3.5 percent in 2023, driven also by investment activity mainly supported by the EU’s resilience and recovery tool. Nonetheless, the uncertain evolution of Omicron and possible future new variants is a key downside risk to growth as well as increase of interest rates, high energy costs, disruption of the international supply chains, increased costs of raw materials and construction costs and inflation. Headline Inflation projections have been revised up, at 3.1% in 2022 and 1.1% in 2023 as energy prices are now set to remain high for longer and price pressures are broadening to several categories of goods and services.
In this context, it should be noted that there is encouraging evidence from all asset classes including the most affected sectors from the pandemic, retail and hospitality. Looking to 2022, consumer spending is expected to return to pre-pandemic levels, boost private consumption and in turn support growth. Overall, the market rebound should continue supported by major regeneration schemes, new development and reconstruction projects being launched. 
In the office sector after years with a lack of office pipeline, Athens’s office market will have 379,000 sq m of new office space by the end of 2025 and 100,000 sq m under construction. Take up is rather low, around 20,000 sq m per quarter estimated to increase in 2022 fueled by the new expectations of users but also new climatic and environmental considerations.  Industrial market activity has reached all-time record numbers both in the case of demand and investment activity. International hotel brands are taking position in the market while multinational firms have invested heavily in building huge data centres in Greece over the past two years and Greece is slowly becoming a European data super hub. 


27 July 2021

As of 20 July 2021, Greece with a population of about 11 million people, had registered 459,146 cases according to the National Public Health Organisation and 12,820 deaths. Since 15 May and following escalating vaccination rollout, Greece removed most of its COVID-19 restrictions including the mandatory SMS system of citizen movement texts for shopping, essential outings and exercise. The country has administered at least 4.85 million COVID-19 vaccine doses, which means that around 57.6% of the population have received at least one dose of the vaccine, whereas about 46.3% have been fully vaccinated. Mandatory measures include wearing of masks at all times in indoor spaces and congested outside places. Indoor F&B and entertainment spaces reopened on 16 July to the vaccinated public and there is also a new multi-tiered system allowing different levels of customer access to entertainment, dining and leisure venues, depending on the vaccination status. Organised beaches reopened on 8 May with health protocols (including mandatory self-tests for employees and spacing requirements between sunbeds). Museums and conservatories as well as casinos have reopened with visitor quotas and protocols. Currently, Greece allows restriction-free entry to all arrivals from the European Union and Schengen Area countries. Following a ‘worrying’ local outbreak, the Civil Protection Ministry banned music on certain areas and forced the Government to mandate the vaccination of healthcare workers and nursing home staff. 

Analysts and authorities continue to upgrade their short and medium-term growth forecasts for Greece, as manufacturing PMI showed record growth and retail sales rebounded from the lockdown. Building permits increased by 124.5% year-on-year (YoY) in April after an increase of 42.9% seen in March according to the Hellenic Statistical Authority. The European Commission continues to marginally revise upwards its forecasts for Greece’s growth with the latest summer forecasts seeing the economy growing by 4.3% in 2021, from the 4.1 % expected in May. Greece saw just 7 million tourists and €4 billion in revenues in 2020, down from a record 33 million visitors and €18 billion in revenues in 2019 and expects tourist arrivals and revenues this year to reach half the levels seen in 2019. Around 2.3 million tourists have visited Greece so far this year, according to Deputy Tourism Minister Sofia Zaharaki. Germany was once again the top country of incoming tourism, with 412,000 arrivals, while the Polish market was a big surprise totaling 202,000 so far, from a total of 295,000 in 2020. 


25 March 2021

As of 16 March 2021, Greece with a population of about 11 million people, had registered 223,789 cases according to the National Public Health Organisation and 7,196 deaths. The country has been under various forms of lockdown restrictions since early November, with retail businesses and restaurants shut and strict limits imposed on movement outside the home. Greek authorities have reimposed a lockdown continuing until further notice to combat the spread of COVID-19 and tightened restrictions for Athens, Thessaloniki and other ‘deep red’ areas such as movement restrictions, mandatory seven day quarantine for travellers arriving from abroad, an expanded nighttime and weekend curfew, suspension of many business and entertainment operations, prohibition of gatherings, restrictions of restaurant operations to delivery/carry-out only, and restrictions on travel between regions in Greece.

Masks are required everywhere, indoors and outdoors while all schools are closed until 29 March. A nighttime curfew is in effect from 21:00 to 05:00 throughout the country. As of 4 March 2021, the weekend curfew is expanded in Athens, Thessaloniki and other high COVID areas, in effect from 19:00 to 05:00. The Greek Ministry of Health has developed a priority system for COVID-19 vaccination and system for appointments, and so far, nearly 1.2 million vaccine doses have been administered, with more than 383,000 people fully vaccinated with both doses. The current phase of vaccination is for individuals age 75 and above, as well as for individuals age 60-65, according to announcements by the National Public Health Organisation.

Greece’s prime minister has outlined a new €2.5 billion ($3 billion) package of relief measures for businesses and workers affected by the coronavirus pandemic and related lockdowns. The new stimulus package is set to provide relief for more than 500,000 businesses and freelancers, and millions of workers and brings the total funds provided for pandemic relief measures to €11.6 billion so far in 2021. The new measures include a new round of interest-free loans for businesses suffering lower turnover in the first quarter of the year, and the possibility in some cases for up to 50% of these loans not being repaid and therefore turning into subsidies. A rent exemption for affected businesses is also extended for March, while credit is extended for tax and social security contributions.  


14 January 2021

Following the click away shopping period between 13 December and 7 January, the Greek authorities have re-imposed a lockdown through to 11 January 2021 to combat the spread of COVID-19.  

Authorities announced 24-hour movement restrictions, mandatory 3 day quarantine for travellers arriving from abroad, an expanded nighttime curfew from 21.00 to 5.00, suspension of many business and entertainment operations, prohibition of gatherings, restrictions of restaurant operations to delivery/carry-out only, and restrictions on travel between regions in Greece.  

Masks are required everywhere, indoors and outdoors. All travellers entering Greece are now required to present a negative molecular test result (PCR test) for COVID-19, performed up to 72 hours before their entry to Greece. Greece will currently only allow EU citizens, EU residents, and residents of certain other specific countries to enter. All visitors from air, land or sea, will be subject to random tests upon arrival. Upon being tested, travellers move to their final destination. In the event of a positive result, they will be contacted and placed on 14-day quarantine, with expenses covered by the Greek state. 

Nursery and grade schools will be re-opening on Monday 11 January while a decision to re-open secondary schools and tertiary education will be reached following assessment of epidemiological data next week. Until then, classes will be held online starting 8 January. In the last 24 hours, Greece recorded 816 new COVID-19 cases and 48 deaths.

In general, travel outside the home should be avoided, but is permitted for work and for the following reasons between the hours of 5.00 and 21.00: 

  • For health reasons; 
  • To buy essential supplies if delivery is not possible in time; 
  • Essential banking or urgent appointments for public services (e.g. electricity); 
  • To help people in need. Transfer to/from workplace of a spouse or first-degree relative. Transfer of a minor to/from school (with a certificate from the school); 
  • Attending a ceremony (e.g. funeral). Travel to exercise visitation rights; 
  • Movements near one’s residence for physical exercise, or care of pets or strays.

In efforts to keep businesses above water and to provide support to employees out of work due to a new tougher round of COVID-19 restrictions, the Greek Government said it would be releasing a new relief package for January. Made up of 7 measures aimed at stimulating the market, the Government announced new support schemes for small businesses enabling lending, NSRF programs backing retail and catering services providers, and rent reductions for affected companies. More specifically the January measures are: 

  • businesses that were forced to remain closed due to government orders will not be required to pay rent in January, at the same time previous rental reduction measures continue to apply for certain categories; 

  • the Government will be accepting applications for inclusion in the 5th round of aid in the form of ‘repayable advance’ - an irrevocable, tax-free amount that cannot be offset against any debt;

  • employees on furlough in January are entitled to a €534 subsidy, while telework has been extended until 31 January; 

  • some 100,000 professionals (lawyers, engineers, dentists, veterinarians, accountants, economists, notaries etc.) will be entitled to a €400 subsidy to be paid by the end of January; 

  • F&B services providers, including restaurants and bars, wishing to purchase outdoor heating appliances can benefit from a subsidy after applying online; 

  • aimed at retailers only, the development ministry announced that it would be financing as of January the total cost for the creation of online store operations (e-shop); 

  • concerning very small companies with turnover between €100,000 - 200,000 unable to access bank lending for working capital, the Hellenic Development Bank plans to expand its business financing program. From the end of January, very small enterprises will have access to a total of €450 million in working capital loans with Greek state guarantees. 

Following the vaccination of frontline healthcare workers and vulnerable groups that have priority, the vaccinations of the general population will begin sometime during the second 10 days of January 2021. 


19 August 2020

On Wednesday 12 August, Greece reported its highest daily tally since the start of the outbreak in the country with 230 new cases of COVID-19. The country’s pandemic death toll stands at 226. Aiming to curb the spread of COVID-19 in Greece, the Government announced a series of new precautionary measures on 17 August, including extra restrictions for the islands of Paros and Antiparos.

The following measures apply from 17 August through to 24 August: 

  • A 50-person cap at public events in affected areas, with the exception of activities and events where special rules apply such as restaurants, theatres, cinemas etc. 

  • Restaurants, clubs and entertainment venues in Attica, which includes Athens, the Saronic Gulf and Kythira islands, close at midnight through to 7am. The measure also applies to the regions of Crete, Eastern Macedonia and Thrace, Thessaloniki, Halkidiki, Larissa, Corfu, Mykonos, Paros, Santorini, Volos, Katerini, Rhodes, Antiparos. Zakynthos and Kos.

  • Emergency restrictions already imposed on Poros island will be extended to 24 August - bars, clubs and restaurants will be required to close at midnight (from the current 11.00 pm curfew). 

  • Masks are mandatory in army barracks, social solidarity structures, and in refugee and migrant reception and accommodation facilities.

  • Staff on holiday leave returning to work at care facilities, nursing homes, military camps, social solidarity structures, and refugee and migrant accommodation facilities will be required to undergo COVID-19 testing prior to work. 

  • Holidaymakers returning to their homes are strongly advised to wear masks at all times for a week in all public and private enclosed areas and in public when social distancing is not possible.

  • Public or private sector employees who are considered vulnerable and at a higher risk of contracting COVID-19, as of 31 August will be able to choose to work from home or from the back office. 

In the meantime, the Attica regional authority has cancelled all cultural events starting 16 August through to 31 August in its regional divisions: Central Athens, Southern Athens, Northern Athens, Western Athens, Piraeus, Saronic Islands, Western Attica and Eastern Attica. Earlier this month, the European Commission amended its forecast for the Greek economy. Although the Commission still expects Greek GDP to fall by 9% this year, it believes the economic prospects for 2020 in the aftermath of COVID-19 are milder than first predicted, with 2021 expected to see a positive rebound with growth of around 6%. 


7 May 2020

Although the rapid response from the Government to implement lockdown was critical, in a country heavily reliant on tourism and with a significant proportion of small and medium-sized companies, the effects of the pandemic are powerful in the economy. The Government is trying to mitigate this impact, it voted the measure of 40% reduction in the commercial rent of March and April 2020 to all enterprises affected by the pandemic among other cash flow boost measures. The Government announced plans for a gradual return to normality starting on 4 May. The impact of the pandemic on Greek real estate is apparent. Although transactions at an advanced stage are proceeding with difficulties, in purchaser due diligence mostly international players are adopting a cautious approach placing on hold their short-term new activity. However, many domestic investors continue actively looking for opportunities in real estate, a trend which progressively expands every week.   

Construction activity has been slowed down which is expected to cause delays in the completion of new office, industrial and residential buildings, and refurbishments. Office occupiers have mostly postponed new leasing transactions, while under review of their short-term plans are interested in shorter and more flexible lease terms. Retail and hospitality sectors are the hardest hit segments, similarly to the other European markets. The logistics sector on the one hand is facing difficulties due to suspended deliveries of goods on the other hand, the increasing demand for e-commerce is helping the sector.  

During Q1 2020, all asset classes experienced stable YoY performance due to increased activity during the first two months of the year. Quarterly preliminary data shows reduced investment volumes YoY in 1st Quarter of 2020 while the closing of Porto Carras sale in mid-April which has been agreed before COVID-19 will boost transaction volume in 2nd Quarter. However, we are expecting a rather low Q2 & Q3 and hoping for a Q4 eyeing for a stronger Q4 activity.  


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