Market Report Property - Eurobank Property Services

Research
Department
July
2014
Property
Market Report
G
>> ECONOMY OVERVIEW
Highlights
>>PROPERTY NEWS
R
E
E
C
E
• T he Greek residential market continues to be characterized by a combination
of excessive supply with a significant stock of unsold properties and low demand. Based on the Forecasting Model of EPS, prices in the residential market are expected to fall further at a lower pace in 2014 (about 6%), stabilize in
2015 and slightly recover from 2016 onwards resulting in an overall increase
of about 5-6% over the next five years compared with the existing price levels.
•R
educed transactions volume as a result of uncertain economic environment
in conjunction with liquidity problems of the majority of potential users and
investors continue to be the key components of commercial market in Greece
during the first half of 2014. The existing and potential tenants maintain the
bargaining advantage.
•L
imited investment interest has led to an almost zero level of supply of new
commercial units due to the reluctance of developers to proceed to new developments unless pre–selling or pre-letting is secured.
>> MARKET TRENDS
Disclaimer
The present advertising brochure
«Property Market Report» has been issued by
Eurobank Property Services S.A.
Editor in charge:
DIMITRIOS ANDRITSOS
Researcher:
Amalia vrachnou
Date
July, 2014
This report has been issued for advertising purposes by Eurobank Property Services S.A., a member of the Eurobank Group,
and may not be reproduced in any manner or provided to any other person. Each person that receives a copy by acceptance
thereof represents and agrees that it will not distribute or provide it to any other person. This report is not an offer to buy or
sell or a solicitation of an offer to buy or sell the real estate mentioned herein. Eurobank Property Services S.A. and others
associated with it may have positions in, and may effect transactions in the real estate mentioned herein, and may also provide
or seek to provide services (investment banking, brokerage or other) for those companies. The investments discussed in this
report may be unsuitable for investors, depending on the specific investment objectives and financial situation. The information
contained herein has been obtained from sources believed to be reliable but it has not been verified by Eurobank Property
Services S.A. The opinions expressed herein may not necessarily coincide with those of any member of the Eurobank Group.
No representation or warranty (express or implied) is made as to the accuracy, completeness, correctness, timeliness or
fairness of the information or opinions herein, all of which are subject to change without notice. No responsibility or liability,
whatsoever and howsoever arising is accepted in relation to the contents hereof by Eurobank Property Services S.A. or any of
its directors, officers or employees. This is an advertising report and is distributed free of charge.
Regulated by RICS
Global
Economy Overview
G
lobal economic activity appeared enhanced in the second half of
year, according to recent projections by the European Commission and the
2013, as it grew by 2.2% in the member-states of the Organization
IMF, the Eurozone will return to growth after two years, with GDP growing
for Economic Co-operation and Development (OECD) in the last
by 1.2%. Similar trends have been foreseen for this year in the European
quarter of the year. According to the latest IMF report, the rate of global
GDP growth formed at 3.0% with trends of stabilization compared with the
previous year (3.1%) and is expected to slightly increase to 3.6% in 2014.
Union, with its economic growth estimated between 1.5% and 1.6%.
In 2014 an overall positive growth is estimated in both EU (+1.4%) and
Eurozone (+1.0%).
The Foundation for Economic and Industrial Research (FEIR) estimates
Inflation was reported decreased with a formulation of 1.4% in EU and
that contributing factors in the configuration of the global GDP are the
1.5% in Eurozone due to the reduced oil prices and the appreciation of euro
noticeable recovery, primarily in the advanced economies, the deceleration
relative to the rates of 2012, however this downward trend is not expected
of fiscal adjustment in the Eurozone countries and the strong domestic
to apply during 2014.
demand in U.S.
Finally, according to the available data of the European Commission
Potential investors are gradually recorded less concerned about the
the Eurozone Economic Sentiment Indicator was reported 102.70 in May
sustainability of debt in the European countries. Furthermore, the banking
compared to 89.80 one year ago. In North America, the Economic Sentiment
system of the Euro Area appears strengthened through the advancing
Indicator increased sharply in the first quarter of 2014, while in Asia it
banking consolidation process in order to provide the necessary stability
deteriorated slightly in the first quarter of 2014, by 0.8 points compared
in conjunction with the limitation of the possibility of future systemic crisis.
with the previous quarter.
Regarding U.S., it is expected that the budget deal agreement with
reduced fiscal costs in late 2013 will significantly affect the domestic
demand. In Japan, the key factor for the development of the economy
continues to be the combination of loose fiscal policy and expansionary
monetary strategy. In China, the vulnerable financial system is considered
to be the most significant risk for the growth momentum of the country.
Finally, the recent geopolitical turmoil in Ukraine and Russia might have
important economic effects, related mainly to the production of natural gas
and oil in the wider region of the Commonwealth of Independent States and
their supply to its member-states and to the EU.
The latest report from FEIR indicates that in the fourth quarter of the
previous year the economies of the Eurozone countries grew on average
by 0.5%, compared with -0.3% recession in the preceding quarter. For
2013 overall, GDP fell marginally in the Euro area (-0.4%) and showed
stabilization trends in the European Union (0.1%). Regarding the current
July 2014
2
Market Trends
Greek
Economy Overview
A
ccording to the data released from the Hellenic Statistical Authority the
investment environment, investments are expected to increase by about 5-8%
recession of Greek economy continued to follow a downward trend
in 2014. In conclusion, FEIR anticipates that the output of the Greek economy
in the fourth quarter of 2013 and was formed at 2.3% in comparison
will remain unchanged this year with a possible slight increase.
to 3.2% in the preceding quarter and to 5.2% in the corresponding quarter of
According to data released by the Eurobank Research & Forecasting
2012. This is reported to be the lowest GDP decline since the beginning of the
Division, the Consumer Price Index was reported negative formulating a
Economic Adjustment Program in mid-2010 with an overall GDP growth of
deflation of 0.9% in 2013, for the first time in five decades, compared to the
-3.9% in the previous year from -6.4% in 2012. In addition, the GDP in Greece
observed inflation of 1.5% in 2012. The most recent analysis by the National
contracted 0.9% in the first quarter of 2014 over the same quarter of the
Statistical Service of Greece indicate a deflation of 1.1% in June 2014.
previous year pursuant to the available data of EL.STAT.
Thus, it is estimated that the deflationary trend will continue for the rest of
The Greek political and economic environment is influenced mainly
2014, albeit weaker than in the previous year (CPI around 0.6%). As for the
by the quite satisfying fiscal results of 2013 and the return of Greece to the
Unemployment Rate, this was reported slightly higher in comparison to 2013
international markets. Specifically, the medium-term bond issued by the Greek
with a reported 27.8% in the first quarter of 2014, while in overall 2013 it stood
public sector can possibly facilitate similar initiatives in the banking system,
on average at 27.3%.
in order to reinforce liquidity and corporate lending, at terms sustainable for
Greece - Key Macroeconomic Indicators
enterprises. In addition, it is worth noting that till the first semester of 2014 a
successful increase by €8,5 bn of share capital of the greek systemic banks
2010
2011
has been reported. On the other hand, there are still considerable obstacles to
Real GDP (yoy%)
-7.1
investment activity, such as low demand, changing taxation, entry barriers and
CPI (yoy%)
distortions in the competition of markets and professions.
Unemployment Rate (%)
14.8
Economic Climate Index
75.1
72.8
80.0
148.3
170.3
156.9
One of the key components of Greek economy evolution is considered to
-4.9
4.7
2013
-3.9
2014
-0.9 (Q1/14)
3.3
1.5
-0.9
-1.1 (06/14)
21.0
26.4
27.3
27.8 (Q1/14)
be the tourism industry which traditionally has a major contribution in the
Gross Public Debt (% GDP)
domestic product. Within this framework, the number of international arrivals
Source: Eurobank Research & Forecasting Division & EL.STAT.
2012
-6.4
93.1 103.7 (06/14)
175.2
177.2e
at major Greek airports in the first two months of 2014 increased by 28.8%,
compared to the previous year, and this upward trend is expected to continue
in the current year.
In conclusion, according to IMF, Oxford Economics and Consensus Forecasts
regarding income, interest rates, credit growth, inflation, unemployment,
Concerning public expenses for investment purposes, the available data
etc., the completion of the recessionary cycle is expected in 2015 with the
of the Public Investment Program show a significant acceleration of the
determination of a new equilibrium level and the definition of the prospects of
program’s implementation by 80% in the first two months of 2014 compared
a market recovery in the forthcoming years.
with 2013 and is expected to be noticeably affected by the activity of the Hellenic
Republic Asset Development Fund. Furthermore, an increased interest from
international investors is expected in the second half of this year both in the
tender procedure of the Hellenic Republic Asset Development Fund and in
the case of foreign direct investment. Taking into account these trends in the
July 2014
3
Property News
D
uring 2013 the investment environment was characterised by
including the International Broadcasting Centre (IBC) in the Municipality of
a limited activity mainly due to the shrunken available capital
Maroussi, the area of Cassiopeia in Corfu, and the sale of five properties
of the enterprises in combination with the uncertainty in the
abroad (London, Brussels, Tashkent, Belgrade and Nicosia). Finally, it is
economic environment. Nevertheless, it should be noted that the decline in
worth noting the concession of the shoreline in Palioyri and St. John in
investment slowed significantly in the last year not exceeding 4.0% versus
Halkidiki to a foreign investor and a Greek construction group respectively.
17.6% in 2012. Based on the available data by the National Bank of Greece,
Within 2014 in the context of the strategic exploitation of public land a
during 2013 individual transactions in the area of commercial market were
number of remarkable properties among others was transferred to the
reported corresponding to a cash flow exceeding €1 bn.
Hellenic Republic Asset Development Fund (HRADF) such as part of the
For the first half of 2014 the point of reference within the recent largescale deals in land development is considered to be the exploitation of
coastal front of Athens, the port of Zea, the ski resort of Parnassos, Xenia
hotels, and the area of the rural prisons in Cassandra.
former Helliniko airport of a total area of 620 hectares. The proposed
Concerning the tourism real estate market, a major deal is considered
investment by Lamda Development and Global Investment Group
to be the sale of 90% of Astir Palace Vouliagmeni SA to Jermin Street
concerns the development of residential areas, hotels, shopping centers
Real Estate Fund IV LP. Other transactions include the sale of Miramare
and stores, theme parks, museums, arts and culture, outdoor cultural
Hotel in Corfu, the island ‘Scorpio’ in the Ionian sea to foreign investors,
sites, health centers and wellness, sports and recreation areas, in
Gerakina Beach of Polygyros in Chalkidiki to a consortium of an American
order to create a contemporary business, educational and research hub
fund and greek investors, as well as the new 10-year lease of King
in combination with the extended upgrade of the existing marina and
George hotel in the center of Athens, the 40-year lease of a 11,000 sqm.
the beach front. According to estimates of the FEIR, the exploitation of
office building to the Elektra Group of Companies by the Church of Greece
the area is expected to contribute to the economic development of the
with a planned conversion to a hotel and the 30-year plus 10-year lease
country through the creation of 35,000 new jobs in the period from 2014 to
of the Makedonia Palace hotel in Thessaloniki. In addition, an investment
2025 without taking into account the positions that will be created by the
of €80 mil is in the pipeline in the area of Kalamata by Grace Hotels. The
operation of the facilities in the medium to long term.
future complex is scheduled to start its operation in 2017 and will include
In the area of REITs a handful of deals was reported till the first semester
the development of a new hotel unit, and villas for sale. In the area of
of 2014 such as the increase of the holding percentage of Fairfax Financial
investments two large-scale projects are in the phase of the authorization
Holdings Limited in Eurobank Properties and the acquisition from the
procedures and refer to the development of two tourist accommodation
latter of the 100% of the share capital of Cloud Hellas through its share
complexes in the islands of Kea and Milos with a total budget of €160 mil.
capital increase. Furthermore, the role of REITs is expected to be enhanced
In the context of promoting tourist market the creation of theme parks as
through a favorable system of taxation, while investments in residential
independent projects or part of hotel accommodations are currently on
property are now authorized on the condition that they will not exceed 25%
the agenda of the Ministry of Development.
of the total portfolio of the REITs in the time of their acquisition.
It should also be noted that at this stage there are over 120 listings
Under the framework of the Privatization Program, in 2013 quite a few
for hotel units on sale throughout Greece, especially in the islands, such
agreements have been made concerning the exploitation of public property,
as Milos, Santorini, Paros, Andros, Tinos, Serifos, Syros, Antiparos,
July 2014
4
Property News
Mykonos, Naxos, Sifnos, Ios, Rhodes, Patmos, Kos, Corfu, Crete, Kefalonia
and Zakynthos. In the city center of Athens there are notices for 11
establishments available for more than €125 mil in total.
In conclusion, it is overall estimated that the prospects of gradual
improvement of the investment climate depends on the final institutional
framework, the finalization of the tax system, the improvement of liquidity
conditions and the cost of energy. In this framework twelve energy
investments, identified by the EU as Projects of Common Interest (PCI’s)
amounting to € 7 bn, have been included in the process of the law on strategic
investments (fast track) and mainly include energy interconnections with
the Caspian and Eastern Mediterranean (Cyprus-Israel).
July 2014
5
Infrastructure
I
Αγορά
Γραφείων
n 2013 the relaunching of a number of infrastructure projects was
The construction of Thessaloniki Metro has experienced some delays
initiated, aiming mainly at the improvement of the economic and
due to archaeological issues with its completion to be expected in the last
investment environment in the long term. The key interventions of this
quarter of 2016 while future extensions regionally (Kalamaria, Evosmos,
strategic approach include modernization of the main railroad network,
Kordelio, Stavroupoli and Efkarpia) have been scheduled.
speeding-up of the construction of the main national highways and
Towards the modernization of the Greek railway network, the project of
secondary connections, building underground rail systems in the main
a new high speed railway line that connects Tithorea to Domokos has been
cities, improving operating conditions in the ports and increasing capacity
scheduled, and the construction of a section of the railway line between
and quality of services in the airports.
Ikonio and Thriassio, exclusively used for the carriage of goods, has been
In this context, in late 2013 the agreement for the launching of the
Adriatic gas pipeline (TAP) was signed, with the start of the construction to
be scheduled in 2015 and its completion in 2018.
completed.
Regarding exploitation of airports, the Ministry of Infrastructure,
Transport and Networks plans to hold tendering procedure for the
In the area of urban development, the project of the overall regeneration
construction of the new airport of Heraklio in Kastelli and the HRADF
of the beachfront of Faliro is currently in the pipeline and includes the
proceeded to the approval of seven investment schemes for granting
development of a Metropolitan Park in combination with the partial
the rights of use, management, development, expansion, maintenance
reconstruction of Poseidon Avenue located in the southern region of
and operation of Regional Airports. In addition, it is noted that the Greek
Athens. The intervention in Panepistimiou Avenue, which includes the
government has proceeded to the definition of the necessary framework
pedestrianisation of 1.5 km, is considered as a project planned to reverse
for the development of waterways along Greece and, initially, in the ports
the last years’ depreciation of the metropolitan center. With the view to
of Patra, Lavrio, Heraklion, Volos, Skyros, Rethymno, Zakunthos and
upgrading the transportation networks along Greece, a number of future
Kerkyra.
projects are expected to start their implementation within 2014 such as:
1) the extension of tram line to Omonia Sq., 2) the extension of the West
Regional motorway to Mesogeia through a tunnel, 3) the expansion of the
highway of Attiki Odos to Rafina and Lavrio, 4) the completion of the Regional
motorway of Aigaleo, 6) the development of the single link of Salamina
island to Athens, 7) the expansion of Kimis Avenue from the interchange
of Attiki Odos to the Olympic Village junction, 8) the construction of the
highway that will connect Thiva to Elefsina, and 9) the construction of the
new highway between the cities of Patra and Pyrgos with a length of 75 km
and an estimated delivery in the first half of 2016.
Within 2013, the operation of seven new metro stations has started,
while the extension of Line 3 of Athens Metro to Piraeus of 7,6 km length,
including six new stations is on construction track.
July 2014
6
Αγορά Γραφείων
Market Trends
Pricing
Real Estate Market Trends (July 2014)
Residential Market
Rent Prices
Demand
Supply
➘
➘
Medium Low
➘
➘
Second / Holiday Home
➘
Commercial Market
➘ ➘
➘
➘
Prime Location
According to the available data of Bank of Greece in 2013 the drop in
Yields
prices in the residential market continued at a faster pace than in the first
years of the current crisis, which led to a decrease in values in 2014 of
approximately 35% from their peak.
Greece Residential Prices Index
Retail
➘
Offices
➘
➘
➘
➘
➘
➘
➘
Logistics
➘
➘
➘
100
History
Forecast
80
➘
Source: Eurobank Property Services S.A.
RESIDENTIAL MARKET
Trends – Key points
The Greek residential market continues to be characterized by a
combination of excessive supply with a significant stock of unsold
properties and low demand. This results to further reduction in sale and
rental values of residential property.
60
40
Greece: 35% fall from peak to 2014 q1
20
0
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
During the first half of 2014, demand, supply, as well as rental prices
There has been a considerable decrease in the number of transactions
have remained in the same low levels in comparison to the last quarter of
that was formed up to 84% from 2007 to date, according to the Index
2013 with a trend towards stabilization. A significant characteristic of the
of Residential Property Transactions of the Bank of Greece. The total
Greek residential market is the heightened interest of potential buyers in
number of transactions in 2013 is estimated to be less than 20.000, while
prime locations rather than the secondary ones which is mainly driven by
the pure sales and purchase transactions are estimated between 5.000-
the overall recession of market values and their trend of stabilization in
10.000. On the other hand, the demand for summer housing in 2013
low levels for prime residential properties. The recorded weaker demand
from foreigner buyers noticeably increased since there was a capital
for secondary assets in less attractive locations has the continuous result
inflow for the purchase of tourist property of approximately €168 mil in
of a stock accumulation of such properties.
2013 vs €113 mil in 2012 (implying in any case less than 1.000 items).
Based on the Forecasting Model of EPS, prices in the residential market
With a view to the attraction of investment in residential property, the
are expected to fall further at a lower pace in 2014 (about 6%), stabilize
Greek government has offered a five year residence licence, open
in 2015 and slightly recover from 2016 onwards resulting in an overall
to renewal, to all non-EU investors in residential property of at least
increase of about 5-6% over the next five years compared with the existing
€250.000 worth.
price levels.
July 2014
7
Market Trends
office MARKET
Overview
Limited investment activity and reduced transactions volume mainly due to
Dolphin / Pampa Energia with a total area of 13,500 sqm. (1. a 5,500 sqm. building
uncertain economic environment in conjunction with limited financial liquidity
once accommodating BNP Paribas by Vas. Sofias Avenue in CBD, and 2. a 8,000
of potential users and investors remained the main characteristics of the office
sqm. office unit in Kifissia formerly used by Pantechniki S.A).
market in Greece during the first half of 2014.
Demand-Supply
Market News
Existing demand is concentrated mainly on newly constructed office buildings
In the area of transactions, Eurobank Properties spent a total of €213
totaling up to 1,500-2,000sqm each, with areas of 400-500sqm/floor. The major
mil in the last two months of 2013 for investments in commercial market.
trends of office market are the renegotiation of existing leases by the existing
Specifically, the company proceeded to the acquisition of a portfolio of
tenants in order to ensure the best possible financial terms as well as relocations in
14 properties previously owned by HRADF through the relevant tender
less costly alternatives. In addition, the majority of the potential users is interested
for commercial sale and leaseback. The portfolio included the police
30 such as satisfactory view,
in newly constructed spaces with upgraded attributes,
headquarters (General Police Directorate of Attica) on Alexandras Avenue
transport access, quality of construction, internal configuration possibilities etc.,
and buildings housing the Ministries of Education (Maroussi), Health
maintaining the same cost. New office space supply remains in low levels, as
(Kifisias Avenue, Maroussi) and Justice (Mesogeion Avenue, Goudi). In
there was no significant speculative development 25
of new offices due to the fact that
turn, the National Pangaea REIT has invested in 2013 approximately €211
potential users are difficult to be found. Non-core office locations are vulnerable to
mil in commercial property. Specifically, it proceeded in the acquisition of
oversupply, high depreciation rates and capital expenditure requirements.
20
the portfolio of the other 14 properties previously owned by HRADF through
commercial sale and leaseback for a period of 20 years. The portfolio
among others included the accommodations of the General Secretariat
Trends
for Information Systems (Moschato), the Hellenic Statistical Authority
Currently, the existing and potential tenants have the bargaining advantage.
(Piraeus), the main building of the Ministry of the Interior in Vas. Sofias
It is noticeable that owners are more conciliatory to rent their properties in
Avenue and the building of the Ministry of Culture located in the center
lower rent values in order to insure a standard income. However, this does not
of Athens. Moreover, the company had acquired one of the few newly
apply when it comes to selling office premises and this trend keeps market
developed office complexes in Paiania which corresponds to an area of
values stable. Demand followed a downward trend during the second quarter
over 60,000 sq.m. and is leased for a period of 32 years in Cosmote.
10
of 2014 comparing to a considerable increase reported
in the previous quarter.
Among the transactions that stood out till the first half of 2014 was also the
acquisition of two office premises by the Argentine investment fund Grupo
15
However, this trend is estimated to differentiate in the second half of 2014 with
expected demand to slightly pick up the pace.
Athens Office Market - Average Monthly Rental Prices (€ /sqm/month)
5
Athens Office Market - Average Monthly Rental Prices (€ /sqm/month)
30
25
0
2006
2007
20
Syngrou Avenue
15
Kifissias Avenue
10
Mesogeion Avenue
5
0
2006
Syngrou Avenue
Kifissias Avenue
2007
2008
2009
2010
2011
2012
2013
2014f
CBD
July 2014
8
MarketMarket
Trends
Office
Pricing - Yields
Grade A premises stand at 11-14€/sqm., while for older units they range at
According to the available data of Bank of Greece, the values of office
the lower levels of 8-10€/sqm.
In Thessaloniki, monthly rents on the main shopping axis of Tsimiski Str.
spaces in prime markets have dropped by 40-42% from their peak.
In Athens, rental prices in the area of CBD range between 11-18€/sqm.,
range between 5-9€/sqm. and in the broader area of the center between 3-5€/
with the higher prices of 14-18€/sqm. to be reported in Syntagma Square
sqm. In Kalamaria prices are estimated at 3-6 €/sqm., while in the Eastern
and in prime locations of Vas. Sofias Avenue.
and Western Thessaloniki, where more upgraded office spaces are located
In Kifisias Avenue for Grade A offices monthly rents range between 12-
compared with the city center, rental prices range between 4-6 €/sqm.
14€/sqm., while for older properties in secondary points around 7-12€/sqm.
In the prime locations of Syggrou Avenue monthly rental prices for newly
Taking into account that the Greek office market is considered to be a
constructed or recently renovated properties are formed at 10-13€/sqm. and
buyer’s market, the estimated yields for Grade A offices in prime markets
for older units at 7-9€/sqm. Finally, for Mesogeion Avenue monthly rents for
range between 8.0-8.5%.
Thessaloniki Office Market
Prime Office Market
9.0%
Average Monthly Rental Prices (€ /sqm/month)
Thessaloniki East (Cosmos area)
min (€/sqm)
min
7.5%
7.25%
7.0%
Kalamaria
8.00% 8.25%
8.0%
max (€/sqm)
8.50%
8.50%
8.5%
Thessaloniki West (26th October)
7.00%
6.5%
6.75%
6.30%
Tsimiski Str.
7.50%
Average Prime Yields
6.25%
6.0%
2005
0
ATHENS
2
1. Center of Athens (CBD)
2. Kifissias Avenue
3. Syggrou Avenue
4
6
8
4. Vouliagmenis Avenue
5. Attiki Odos
6. Mesogeion Avenue
10
2006
2007
2008
2009
2010
2011
2012
2013
2014f
THESSALONIKI
1. Area of Tsimiski, Mitropoleos
and Dimokratias Square
2. Kalamaria
3. October 26th Str.
4. Evosmos-Stavroupolis
5. «Cosmos Area»
July 2014
9
Market Trends
RETAIL MARKET
Overview
Credit availability decrease towards households and businesses,
semester of 2014. However, much of the middle ground, particularly
increasing debt obligations, reduction in disposal income as well as
secondary retail pitches, is still struggling. The secondary submarkets
uncertainty in the economic environment and employment, led to a further
are characterized by increased vacancy rates, while re-letting period
reduction in consumer activity. Street retail market has been mostly
has lengthened considerably. According to data from the National
affected by the crisis and is characterized by reduced levels of demand,
Confederation of Hellenic Commerce (NCHC) in March of 2014, a
while shopping centers appeared to be less affected due to coordinated
percentage of 31.2% of businesses in the CBD of Athens have been
marketing policies that they have managed to develop in order to face the
reported closed. In comparison to the previous semester, the situation
depression. Currently, the existing and potential tenants continue to have
may seem marginally improved but it should be noted that this is the
the bargaining advantage with retail market to be considered mainly as
first time that the rate of vacancy reported in CBD is over 30% with the
buyer’s market.
highest percentage of closed businesses to have been recorded in
September of the previous year 2013 (28.8%). The majority of vacant retail
units is mainly located in the traditional commercial triangle of Omonia
Market News
- Syntagma - Monastiraki, as well as by Stadiou Str., Panepistimiou Str.
In the area of investments, Eurobank Properties has acquired four
and Ch. Trikoypi Str.
commercial properties in Athens and Thessaloniki leased to Praktiker,
Carrefour and McDonalds. In the second semester of 2014 ATTICA
DEPARTMENT STORES S.A. is planning to open a new 7,000 sqm. retail
Trends
store in Thessaloniki (formerly operated by Fokas) expanding its business
Currently, the existing and potential tenants have the bargaining
activity in addition to the current clothing chain operating in City Link by
advantage with retail market to be considered mainly as buyer’s market.
Panepistimiou Str. (25,000 sqm.), in Golden Hall-Maroussi (12,000 sqm.),
The current stabilization trend of retail market is expected to apply during
at The Mall Athens (3,500 sqm.) and Mediterranean Cosmos, Thessaloniki
the second half of 2014.
(5,000 sqm).
In the field of commercial parks, the listed company REDS SA
Real Estate Development and Services has announced twelve lease
Towards the direction of reviving the retail market, through the utilization
of a significant number of available retail property, the Greek government
decided in 2014 the partial deregulation of retail rental.
agreements at Smart Park in Spata which correspond to stores of a total
area of approximately 1,200 sqm. with the occupancy of the park rising
to 98%.
Outside the boundaries of Attica and specifically in Korinthos, a new
project concerning the development of a Shopping Park in the old Korinthos
Pricing - Yields
According to the available data of Bank of Greece, the values of retail
property in prime locations have dropped by 45-48% from their peak.
Pipeworks has been launched by Viohalko. The Mare West is considered
In Athens the monthly rental prices in prime locations of CBD (Ermou -
to be the largest commercial development in the area of Korinthos, with a
Kolonaki) range between 100-130€/sqm., while for secondary pitches they
total area of 13,500 sqm. and an estimated start of construction works within
stand at 80€/sqm. In shopping centers rents for stores with areas larger
2014.
than 100 sqm range between 30-60€/sqm. while for smaller areas they
Finally, in the second semester of 2014 GAIAOSE is also expected
form between 60-90€/sqm.
to re-announce the tendering procedure for the development of a
In the market of Thessaloniki, monthly rents in prime locations of the
shopping center of 37,000 sqm. in the main railway station of Piraeus port
center on Tsimiski Str. 3A, (middle section between P.P.Germanou Str.
complementing the developmental program of Pireaus Port Authority S.A.
and Aristotelous Str.) range between 70-100€/sqm., on Tsimiski Str. 2A
including, inter alia, cultural functions and cruise terminal. In addition,
(1st and 3rd sections which cover the rest of the street) prices stand at
Urban Rail Transport S.A. (STASY) is proceeding to the lease of 13 stores
30-70€/sqm., and at the ends of the street they are formed at 20-30€/
located in metro and railway stations.
sqm. By Mitropoleos Str. 3A, (middle section between Ag. Sofias Str and
Mitropolitou Iosif Str.) monthly rental prices range between 30-50€/sqm.,
while by Mitropoleos Str. 2A (rest of the street) they stand between 10-
Demand-Supply
30€/sqm. By Egnatia Str. 3A (area of Kamara) monthly rents are formed
Demand is mainly focused at prime locations and this has created a
at 25-50€/sqm., while for the rest of the avenue (Egnatia Str. 2A) they
slight upward trend in rental prices for these markets (Kifisia, Glyfada,
stand at 15-25/sqm. Finally, by P. Koromila Str. rental prices are formed
Ermou) with a slight stabilization trend of retail market during the first
at the levels of 15-25€/sqm/month.
July 2014 10
Market
Trends
Retail Market
Athens Retail Market - Average Monthly Rental Prices (€ /sqm/month)
300
250
200
150
100
50
0
2006
2007
2008
2009
2010
8.00%
2012
2013
Shopping Malls
(Shops >100sq.m)
Retail Shops (prime
locations on other main markets)
High Street Retail
Shops (Ermou -Kolonaki)
2011
2014
Shopping Malls
(Shops <100sq.m)
Retail Market
7.60%
7.50%
7.20%
7.50%
7.50%
7.00%
6.80%
6.75%
6.50%
6.40%
6.00%
6.00%
6.00%
Average Prime Yields
5.80%
5.60%
2006
2007
2008
2009
2010
2011
2012
2013
2014f
July 2014 11
Market
Trends
Retail Market
The average rental prices for shopping centers range around 14-55€/sqm.
depending on each store’s individual position and specific characteristics.
Yields at the 2nd quarter of 2014 have been reported slightly lower and range
between 7.00-7.75% in prime markets, while for secondary markets with almost
non-existent investment interest they exceed 8.5%.
Thessaloniki Retail Market
Average Monthly Rental Prices (€ /sqm/month)
P.Koromila Str.
max (€/sqm)
Egnatia Str. 3A
min (€/sqm)
min
Mitropoleos Str. 3A
Tsimiski Str. 3A
20
40
60
80
100
120
THESSALONIKI
ΗΝ
ΙΟ
Υ
ΕΝ
ΤΟ
ΥΓ
ΜΗ
ΩΝ
ΛΟ
ΥΣ
ΤΡ
ΡΙΟ
Υ
ΚΟ
ΜΝ
ΡΑ
Κ
ΙΜ
ΙΣΚ
Η
1
ΜΗ
ΤΡ
ΛΕ
ΟΡ
ΕΡ
ΜΟ
Υ
ΛΕ
ΙΟ
Υ
ΟΛ
Ε
ΟΣ
Ν
ΡΑ
ΤΗ
ΓΟ
ΥΜ
ΑΚ
ΡΥ
Γ
ΑΛ
ΕΞ
1
2
ΤΣ
ΙΜ
ΙΚΗ
Σ
ΙΣ
ΚΗ
Ν
ΤΡΩ
Ν ΠΑ
ΑΝ
Υ
ΑΝΟ
ΓΕΡΜ
∆Ρ
ΟΥ
Σ
ΒΩ
ΛΟ
Υ
Υ ΜΕΛ
ΠΑΥΛΟ
ΠΡ
ΟΞ
Ε
Α
ΚΟ
Ρ
Φ
ΣΗ
ΟΜ
ΙΩ
ΗΛ
ΙΟ
ΥΓ
ΟΥ
ΝΑ
Ρ
ΝΟ
Υ
ΤΡ
ΜΗ
ΗΤ
ΡΟ
ΠΟ
ΛΙ
ΤΟ
Υ
Α
Μ
∆Η
ΗΤ
4. Egnatia
ΡΟ
Π
5. Proxenou Koromila ΟΛΕ
Μ
1. Tsimiski
2. Mitropoleos
3. Ermou
ΝΗ
ΑΙΩ
ΠΑΛ
5
1. Ermou
2. Voukourestiou
3. Kolonaki (Skoufa)
ΙΑΝ
ΕΓ
ΝΑ
ΤΙΑ
ΟΠ
ΩΝ
ΩΦ
ΣΤ
4
Η
ΤΣ
ΣΗ
ΙΑΣ
3
ΕΩ
ΣΟ
Φ
ΣΙΛ
ΙΩ
ΤΟ
Υ
ΑΓ
ΙΑΣ
ΕΥ
ΘΕ
ΕΛ
ΙΟ
Υ
ΑΞ
ΒΑ
ΤΟ
ΥΡ
ΠΛΑΤΕΙΑ
ΜΑΚΕ∆ΟΝΟΜΑΧΩΝ
Ι∆ΟΥ
ΚΟ
ΥΝ
ΙΩΑΝΝ
ΟΠ
ΒΕ
ΟΛ
Ι
ΝΙ
Υ
ΙΟ
ΖΕ
ΛΕ
2
ΝΑ
ΤΙΑ
ΙΣΤ
ΟΤ
Ε
ΑΚ
ΗΡ
3
ΠΛΑΤΕΙΑ
∆ΙΚΑΣΤΗΡΙΩΝ
ΕΓ
ΛΟ
Υ
ΩΣ
ΛΕ
ΣΙ
ΒΑ
ΕΡ
ΜΟ
Υ
ΝΑ
∆
ATHENS
ΑΡ
0
ΩΝ
ΤΣ
ΙΜ
ΙΣ
ΚΗ
July 2014 12
Market Trends
LOGISTICS MARKET
Overview
Trends
Limited investment activity mainly due to liquidity problems of the majority
The completion of several significant infrastructure works (i.e. the
of potential investors continues to be the main characteristic of logistics market
construction of the national highways that connect Greece to other
with the exception of a few individual transactions. Downward pressure on
European countries along with Balkans, the improvement of the railway
rental prices compared to the previous years mainly due to tenant’s bargaining
network in conjunction with the revitalization of marine infrastructure) will
power and weakened interest of users continues to apply.
facilitate both the national and international commercial transactions and
is expected to affect positively the logistics market as well.
A determining factor towards the development of logistics market in
Market News
Attica is considered to be the optimal planning of the exploitation of the
A recent deal in the field of logistics market was the purchase of three
60 hectares area in Thriassio where the Freight Station of OSE operates.
storage centers with a total area of 38,000 sqm. in Aspropyrgos by Eurobank
Overall, it is estimated that the development of upgraded freight centers
Properties. In April of 2014, Lidl Hellas proceeded to the development of
will contribute towards the strengthening of the domestic industry supply
a new 50,000 sqm. logistics center in the area of Kalyvia in Attica and is
chain, provided that accurate delineation of areas with specific land uses
planning to continue the expansion strategy with an additional unit of a
will take precedence.
total area of 60,000 sqm. in Sindos, Thessaloniki.
Outside the limits of Attica, Cosco proceeded to the lease of warehouses
in the port of Alexandroupoli through its subsidiary Cosco Logistics. There
has been, also, an agreement between 26 major industrial and commercial
Athens Logistics Market
Average Monthly Rental Prices (€ /sqm/month)
8
enterprises, cooperatives, transport companies and TRAINOSE with a view to
the development of a logistics network in order to accommodate the transport
of goods, originally through the central axis of Athens - Thessaloniki. As pointed
out, this agreement aims to the creation of the first logistics network in Greece
6
with expected measurable development benefits for the Greek economy and
entrepreneurship. The network is being planned to accommodate Ikonio and
Thriassio in Attica as well as Thessaloniki’s Central Station and Sindos in the
4
broad area of Thessaloniki.
In 2014, the operation of a new transit center of ZTE Corporation in Piraeus is
launched through the use of the infrastructure of Cosco in the port in order to
2
promote the company’s products through TRAINOSE to the European market.
In parallel, ZTE is planning to develop in Piraeus a maintenance and repair
0
2006
center for all devices that are been directed to the European market which may
2007
2008
2009
2010
2012
2011
2013
2014f
result in the creation of a production line in the long term.
Thessaloniki Logistics Market
Average Monthly Rental Prices (€ /sqm/month)
Demand-Supply
Demand for logistics units in prime locations has reported a slight
Kalochori-Oraiokastro
upward trend in the first quarter of 2014 due to the considerable interest
of potential users to utilize the existing organized logistics centers as the
best alternative in order to avoid the necessary operational expenses of
Sindos
individual warehouses in combination with the overall recession of rental
prices. The greatest proportion of the trading volume came from transport
and pharmaceutical companies with a demand for land surface up to 5,000
0
0.5
1
1.5
2
2.5
sqm for the development of their facilities. However, the level of supply of
new logistics units remained at almost zero levels due to the reluctance
of developers to proceed to new developments unless pre–selling or preletting is secured.
max (€/sqm)
min (€/sqm)
min
July 2014 13
3
Market
Trends
Logistics
Market
8.50%
12.0%
Logistics Market
11.0%
10.50%
10.25%
10.50%
10.00%
10.0%
9.50%
9.0%
8.50%
8.40%
8.0%
Average Prime Yields
7.75%
7.50%
7.0%
2006
2007
2008
2009
2010
2011
2012
2013
2014f
Pricing - Yields
The average levels of monthly rents in the main markets of Attica are
formed at 2.5-3.5 €/sqm. However, there are cases where in upgraded
Oreokastro rental prices in the field of industrial units as well as logistics
are formed at 0.5-2.2€/sqm.
properties slightly higher lease rates can be achieved.
In prime locations of Thessaloniki such as the Industrial Area of Sindos,
Yields in prime markets are estimated around 10.0%, while for secondary Δ. ΛΑ
monthly rental prices range between 1-2.50 €/sqm., while in Kalochori and
markets they are reported higher than 11.0%.
ATtica
THESSALONIKI
Ν. ΚΙΛΚΙΣ
Δ. ΑΣΣΗΡΟΥ
2
Δ. ΚΟΥΦΑΛΙΩΝ
Δ. ΑΓΙΟΥ ΑΘΑΝΑΣΙΟΥ
Ν. ΠΕΛΛΗΣ
Δ. ΜΥΓΔΟΝΙΑΣ
Δ. ΚΑΛΛΙΘΕΑΣ
Δ. ΛΑ
Δ. ΩΡΑΙΟΚΑΣΤΡΟΥ
4
3
Δ. ΧΑΛΚΗΔΟΝΟΣ
1
ΛΙΜΝ
1
6
Ν. ΗΜΑΘΙΑΣ
4
7
5
Δ. ΑΞΙΟΥ
Δ. ΕΧΕΔΩΡΟΥ
Π.Σ.Θ.
2
Δ. ΧΟΡΤΙΑ
Δ. ΧΑΛΑΣΤΡΑΣ
ΚΟΛΠΟΣ
ΘΕΣΣΑΛΟΝΙΚΗΣ
Δ. ΘΕΡΜΗΣ
Δ. Β
Δ. ΘΕΡΜΑΪΚΟΥ
3
Δ. ΜΗΧΑΝΙΩΝΑΣ
1. Aghios Stefanos
2. Oinofyta
3. Markopoulo
4. Magoula
5. Aspropyrgos
6. Thriasio
7. Metamorfosi
1. Sindos
2. Kalochori
3. Oraiokastro
4. Aghios Athanasios
Δ. ΜΙΚΡΑΣ
Δ. ΕΠΑΝΟΜΗΣ
July 2014 14
S/E Europe
Market Trends
Real Estate Market Trends
Bulgaria
Q1 2014
Rent prices
Demand
Supply
➘
➘
Prime Location
➘
Residential Market
Yields
➘
Medium Low
➘
➘
➘
➘
Second/Holiday Home➘
sofia
Commercial Market
➘
Retail
➘
Offices
➘
➘
➘
➘
➘
➘
Logistics
➘
➘
➘
➘
Source: Property Services Sofia AD
Bulgaria - Key Macroeconomic Indicators
2010
2011
2012
2013
Real GDP (yoy%)
0.4
1.8
0.6
0.9
2014f
1.8
CPI (annual average)
2.4
4.2
3.0
0.9
-0.2
Unemployment Rate (%)
9.2
11.3
12.3
13.0
12.8
Gross Public Debt (%GDP)
16.7
17.0
18.4
18.9
23.1
Policy Rate
N/A
N/A
N/A
N/A
N/A
Source: Eurobank Research & Forecasting Division
July 2014 15
Countries
S/E
Europeof Activity
Real Estate Market Trends
Residential Market
romania
Q1 2014
Rental prices
Demand
Supply
Prime Location
➘
➘
➘
Medium Low
➘
➘
➚
Second/Holiday Home
➘
➘
➘
Commercial Market
bucharest
Yields
Retail
➘
➚
➚
➘
Offices
➘
➚
➚
➘
Logistics
➘
➘
➚
➘
Source: Eurobank Property Services S.A.
Romania - Key Macroeconomic Indicators
2010
2011
2012
2013
2014f
-1.6
2.5
0.6
3.5
3.0
CPI (annual average)
6.1
5.8
3.3
4.0
2.3
Unemployment Rate (%)
7.3
7.4
7.0
7.3
7.2
Gross Public Debt (%GDP)
31.2
33.0
38.0
38.3
39.9
Policy Rate
5.25
5,25
5.25
4.00
3.50
Real GDP (yoy%)
Source: Eurobank Research & Forecasting Division
Real Estate Market Trends
Residential Market
Q1 2014
Rent prices
Demand
Supply
➘
➘
➘
Prime Location
kiev
Yields
➘
➘
➘
Medium Low
ukraine
➘
➘
Second/Holiday Home
➘
Commercial Market
➘
➘
➘
➘
Offices
➘
➘
➘
➘
➘
Logistics
➘
➘
➘
Retail
Source: Property Services Ukraine LLC
Ukraine - Key Macroeconomic Indicators
Real GDP (yoy%)
CPI (annual average)
Policy Rate
2010
2011
2012
4.1
5.2
0.2
2013
0.1 2014f
9.4
8.0
0.6
0.1 5.1 (Q4 /14)
N/A
7.75
7.5
7.5 N/A
-1.1 (Q1 /14)
Source: Eurobank Research & Forecasting Division
July 2014 16
Countries
S/E
Europeof Activity
Real Estate Market Trends
Residential Market
belgrade
Q1 2014
Rent prices
Demand
Supply
Prime Location
➘
➘
➘
Medium Low
➘
➘
➘
Second/Holiday Home
➘
➘
➘
Commercial Market
➘ ➘ ➘
➘ ➘
serbia
➘
➘
➘
Offices
Retail
➘ ➘
➘
Yields
Logistics ➘
Source: ERB Property Services d.o.o. Belgrade
Serbia - Key Macroeconomic Indicators
2010
2011
2012
2013
2014f
Real GDP (yoy%)
1.0
1.6
-1.5
2.5
1.0
CPI (annual average)
6.2
11.2
7.8
7.8
3.5
Unemployment Rate (%)
19.2
23.0
23.1
20.1
21.2
Gross Public Debt (%GDP)
44.5
48.7
59.3
62.5
66.9
11.75
11.25
11.25
9.50
8.50
Policy Rate
Source: Eurobank Research & Forecasting Division
July 2014 17
Contact Information
UKRAINE
ROMANIA
SERBIA
BULGARIA
GREECE
GREECE
ABROAD
Advisory Services
International Real Estate Division
Tel.: +30 210 3522502
Fax: +30 210 3523410
Tel.: +30 210 3522756
Fax: +30 210 3523426
Property Valuations
Bulgaria
Tel.: +30 210 3523425
Fax: +30 210 3523410
EFG Property Services Sofia A.D.
Tel.: +359.2.811.7010
Technical Services
Romania
Tel.: +30 210 3523438
Fax: +30 210 3522670
EFG Property Services S.A.
Tel.: +40.21.308.6101-4
Business Development
Serbia
Tel.: +30 210 3522680
Fax: +30 210 3523426
EFG Property Services Ltd. Belgrade
Tel.: +381.11.202.2410
Brokerage – Athens
Ukraine
Tel.: +30 210 3522680
Fax: +30 210 3522672
Property Services Ukraine LLC
Tel.: +380.44.391.5604
Brokerage – Thessaloniki
Tel.: +30 2310 506185
Fax: +30 210 3522672
July 2014 18
Contact Information
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Eurobank Property Services S.A.
20 Amaliados & Eslin Str., Tel.: +30 211 8809393, fax: +30 211 8809399 , e-mail:[email protected]
Disclaimer
This report has been issued for advertising purposes by Eurobank Property Services S.A., a member of the Eurobank Group, and may not be reproduced in any manner or provided to any
other person. Each person that receives a copy by acceptance thereof represents and agrees that it will not distribute or provide it to any other person. This report is not an offer to buy or sell
or a solicitation of an offer to buy or sell the real estate mentioned herein. Eurobank Property Services S.A. and others associated with it may have positions in, and may effect transactions in
the real estate mentioned herein, and may also provide or seek to provide services (investment banking, brokerage or other) for those companies. The investments discussed in this report
may be unsuitable for investors, depending on the specific investment objectives and financial situation. The information contained herein has been obtained from sources believed to be
reliable but it has not been verified by Eurobank Property Services S.A. The opinions expressed herein may not necessarily coincide with those of any member of the Eurobank Group. No
representation or warranty (express or implied) is made as to the accuracy, completeness, correctness, timeliness or fairness of the information or opinions herein, all of which are subject to
change without notice. No responsibility or liability, whatsoever and howsoever arising is accepted in relation to the contents hereof by Eurobank Property Services S.A. or any of its directors,
officers or employees. This is an advertising report and is distributed free of charge.
July 2014 19