Athens' trade market: an oasis amid pressures in Europe.

The Athens office market is characterized by high yields of up to 6% and very low vacancy rates compared to other European capitals, according to BNP Paribas Real Estate. Athens is one of the most attractive investment options in Europe, despite the commercial real estate crisis that continues worldwide, according to a report by BNP Paribas Real Estate.

In comparison to other European commercial markets, the Athens market stands out for its small footprint. Here, high yields and low vacancy rates create a stable environment in an industry that is under intense pressure due to rising interest rates and the proliferation of remote working.

According to BNP'. 'Paribas Real Estate, yields on luxury office space in Athens are as high as 6%, compared to 4.1% in Rome and 4.5% in Lisbon.

It is worth noting, however, that yields in other European capitals are rising due to inflation and changes in the European Central Bank's (ECB) monetary policy, which is affecting the fundamentals of the market - rent levels and real estate prices. In the first quarter of 2023, annualized yield growth in Amsterdam was 120 basis points, while yields in Milan and Madrid increased by 100 basis points.

Despite the implementation of new green projects, vacant space levels across the country remain low. In Athens, the figure stands at 4%, compared to 12% in Barcelona, 8.7% in Rome and Budapest -' '13.1%.

"The overall share of vacant office space in Europe was 7.4% in the first quarter of 2023 (+20 basis points compared to the first quarter of 2022)," emphasizes BNP Paribas Real Estate. "Most markets show stability, but Barcelona (+300 basis points compared to the first quarter of 2022) and Dublin (+210 basis points) have seen an increase in the proportion of vacant office buildings completed in 2022. Most markets have a two-tiered dynamic - low availability in central locations and new builds, and significantly higher levels of vacant space in peripheral office areas," the report said.

At the same time, the overall investment atmosphere in the market remains challenging, as both buyers and' 'sellers are pulling out of deals.

"Logistics suffered the most (down 71%) as prices were already high before the problems occurred. Offices also suffered (-66%) due to the difficulty of pricing amidst the structural changes that are taking place in the sector. Hotels (-21%) and retail (-37%) experienced the least decline in investment," concludes the report.

With regard to the rest of the year, experts emphasize that office real estate values are expected to continue to decline in' 'Europe. In Europe, office prices have fallen by up to 33% over the past year, according to consultancy JLL. "We appear to be about two-thirds of the way through the price correction in Europe, although this varies by market, suggesting that the decline in luxury real estate prices is likely to be complete by Q4 2023," JLL notes.