Office
Take-up for the fourth quarter totaled 20,000 sqm, bringing the total value for the year to 160,000 sqm. This represents a 22% increase on the previous year and is only 12% below the highest take-up level recorded pre-crisis. Over Q4, two projects were completed with a total area of around 9,500 sqm, in line with the low number of completions in other 2023 quarters. As a result, there is intense pressure on prime rents, with the average prime rent rising to €29/sq m/month during the quarter, which is around 12% above last year. There is currently nearly 230,000 sqm of space under construction expected to be completed over the next two years, around 45% of which is reconstruction of existing buildings. Office investment volumes recorded were € 165 million in Q4 2023, 15% higher compared to last year. However, the deals were mainly of special interests, and is evident that investors maintain a cautious posture due to the recent rising of financing costs.Industrial
The fundamentals of the industrial property market in Greece remain strong with an investment volume of circa €60 million this quarter across the country, an increase of 20% compared to both the same quarter of 2022 and the previous quarter of 2023. It is important to highlight that the lack of supply is a problem for the logistics market, and the existing product does not meet the requirements for the current demand driving rent increases in prime logistics. Sound demand for modern urban space has been recorded from smaller to medium-sized occupier groups leading to upgrading large parts of the current Industrial and logistics property stock in urban locations.
Retail
In 2023, it is estimated that the Greek retail trade will end with a single-digit increase, which to a large extent is inflationary and does not imply a corresponding increase in real consumption. Driven by positive sales figures, appetite for new store space remained robust throughout the quarter. A wide range of retailers benefiting from the economic recovery and tourist demand, and the city centre experienced a surge in demand due to limited supply of prime spaces. Value and convenience-driven retail continues to perform well. In this quarter 50 transactions have been recorded in the different retail markets of the country, the same level as the previous quarter. High street retail continued to dominate, accounting for the majority of new openings. Retail investment volumes hit the record level of €180 million in Q4 2023 with the sentiment remaining positive for the sector.
Hospitality
In 2023, Greece's tourism sector flourished significantly, witnessing remarkable growth in total international arrivals, which surged by approximately 17.6% compared to 2022, as reported by the Bank of Greece, but also 4.4% higher than the pre-Covid record of 31.3 million in 2019. The five-star upper-upscale hotel sector in Athens and Thessaloniki saw significant growth in the latter half of 2023, leading to a RevPAR increase of over 25% compared to 2022 for both cities, on an annual basis. Average daily rates (ADRs) in Athens and Thessaloniki reached €260 and €150, respectively, while occupancies ranged between 60% and 70%. For seasonal selected upper-upscale resorts, in Corfu, Crete and Rhodes, preliminary results indicated an average summer season occupancy slightly exceeding 75%, while ADRs were around of €250, which is approximately 8% higher than 2022.
