Market insiders say the Greek commercial property market is ready to bottom out by next year and will start to post higher numbers in 2014, if not sooner. Rental rate renegotiations and a general reduction in prices is expected to continue until the third quarter of this year, but will open up some good opportunities for investors.
The drop in commercial property prices, including first-class buildings, is the primary reason why investors have been interested in opportunities. There is a greater margin for capital gains now and there has been an increase in yields approaching the 8.5 per cent mark in the office market.
Eurobank Properties managers believe that opportunities will multiply in the market this year. The adjustment period for rents is expected to end in 2013.
Aristotelis Karytinos, the general manager for real estate at the National Bank of Greece Group and the chief executive at subsidiary Ethniki Pangaia Properties, stated that Ethniki Pangaia Properties is looking at a number of investment proposals to strengthen its profile on the Greek bourse by acquiring Eurobank Properties, of which it controls over 56 per cent.
Ethniki Pangaia was involved in one of the largest investments in recent years when it acquired a 60,000 sq m property on the Attiki Odos highway, near Paiania in eastern Attica for 120 million euros (£102.2 million). The purchase of the property was entirely funded from the company’s own capital.
It has been leased for 32 years to Cosmote, a leading mobile phone operator, and offers an annual yield of up to 8.5 per cent. The previous owner was a company belonging to Dimand Real Estate property developers.
According to Karytinos, this move forms part of the company’s investment policy that will spread the risk across its lease tenants. The value of Ethniki Pangaia’s portfolio of properties is more than 700 million euros (£596 million).
The majority of the properties are leased by the National Bank Group. The recently-added buildings on Attiki Odos bring a high resale value to the portfolio, which will provide a benefit if the company decides to approach foreign buyers to cash in any capital gains in the future.
The Attiki Odos property is the first one to hold the LEED Gold Certificate, which is the voluntary assessment document listing the following information about a building:
International investment funds prefer to buy properties with energy certificates. A building with this designation can command a higher selling price from a potential buyer.
