Office deals hit record high in 2019

The number of deals being done on office buildings in Greece is expected to hit a new high in 2019, in what is likely to considerably exceed the 500 million euro mark.

An increase in the number of modern offices going under the hammer, in combination with higher demand, has prompted a spike in deals being completed in this segment of the market. An indicative example is the recent sale of an office building in Marousi, northern Athens, used by Deloitte for 30 million euros to Dromeus Capital's GreCo Fund.

A few days earlier, the offices previously used by the DOL media group on Michalokopoulou avenue, were sold for 25 million euros to real estate investment company Trastor, while in March, Orilina Properties bought the building accommodating the head offices of Ellaktor for 25 million euros.

Furthermore, a group of four office buildings that previously belonged to the Vovos group was purchased for 95 million euros by Brooklane Capital that also acquired offices housing Mircosoft Hellas for 12 million euros. In a closely watched transaction, offers on the sale of four office buildings put up on the market Prodea Investments are expected to be submitted next week in a sale estimated to be worth 75 million euros.

Meanwhile, rents for office space are heading higher, advancing by up to 13.5 percent in the third quarter of the year.
A report put together by Proprius, which is partnered with Cushman and Wakefield, points out that office rentals in Syntagma square have reached 21 euros per square meter per month, advancing 13.5 percent from last year. On Kifisias Avenue, the price of renting offices has advanced 6 percent, hitting 17.5 euros per square meter, while in Piraeus the cost is around 14.4 euros per square meter, up 9 percent for the year.
Experts see rent prices continuing to rise in coming years on the back of strong demand and a low supply of quality assets despite some initiatives to push ahead with new constructions. In any case, new office buildings won't be ready for one to two years from now.

Changes in the market have driven yields to ten year low. According to Proprius, yields around Syntagma have dipped to around 6.5 percent (from 7.5 percent last year), 7 percent on Kiffisias Avenue (from 7.75 percent a year earlier) and 7.25 percent on Piraeus Avenue (versus 8 percent).