Investors are turning buildings into multi-purpose accommodation units in central Athens in a bid to get on top of sharply rising real estate prices.
Hybrid, or multipurpose, hotels are becoming more popular in the Greek capital as the era of quick profits from short term property rentals is coming to an end. This involves providing furnished rooms to tourists or regular hotel services from the same building in a move that lowers investor risk and caters to a larger category of visitors. These hotels are equipped to easily provide both Airbnb type services and hotel accommodation.
The ability to meet the needs of more customers helps reduce the building's operational costs and increase its potential value in what is perceived as being crucial if the investor plans to sell it in future years.
Assets in the central Athens area, such as Acropolis, Monastiraki, and Plaka, are often chosen to jointly provide these services. For example, a vacant building on Sarris street, Psyri, is being developed by Israeli group Ficus Investments for accommodation purposes. Also, on nearby Ivis street, a company called Hellenic Filoxenia Suites and Apartments is converting a five-story building into a hotel.
Sector officials say that this is the only way investors can invest in these areas due to high property prices. Strong demand for Airbnb services has pushed prices up to 60 percent higher in the last three years. In some cases, price hikes were even higher, increasing investor risk at the same time.
Indicative are selling prices in Psyri, particularly on stand-alone assets. Old factories and workshops, which are plentiful in the area, can sell for up to 5,000 euros to 5,500 euros per square meter, in price levels that are seen in affluent beachside areas such as Glyfada.
The steep costs can be justified, up to a point. Daily revenues for accommodation in central Athens reaches up to 73 euros per day, based on data from Airbnb and HomeAway for the month ending October 15. Every month, this translates into an income of 1,244 euros with the occupancy rate being at around 70 percent, the data shows.