With inflation rising and interest rates increasing, the European property market is facing serious challenges. However, the property markets of Cyprus, Greece and Serbia continue to demonstrate resilience, offering attractive opportunities for both local and foreign investors.
CEO of Danos Group , Yannis Paraskevopoulos , speaking at an event in Nicosia, stressed that the outlook for the three countries remains positive, with strong demand for both residential and commercial property. In particular, foreign investment plays a key role in the development of the Cyprus and Greek property markets, especially in the commercial property sector.
Despite the challenging economic conditions, demand for Class A office space remains stable in these countries, indicating a resurgence of interest in commercial real estate. This trend has been particularly pronounced in Greece, where the office market has resisted the decline seen in other European countries.
The Greek Market: Attractive Conditions for Foreign Investors
Danos research , the Greek office market continues to offer significant opportunities for investors. Data from the Central Bank of Greece shows that in the first half of 2024, 54.2% of all foreign investments of €2.1 billion were directed towards real estate acquisitions, amounting to €1.14 billion.
Demand for Class A office space in Greece is driven by the country’s growing economy and the increasing number of investors focused on properties that meet sustainability criteria ( ESG ). Danos ’ Paraskevopoulos noted that ESG criteria have become an important factor for investors, stimulating the construction of new certified office buildings that meet modern requirements.
According to Danos Group , 75% of all new leases in Greece were for high-quality properties with high energy efficiency ratings . Athens remains one of the most affordable cities in Europe to rent modern offices, which provides a competitive advantage. The average rental price for new certified offices in Athens exceeds €30 per square meter, while the rent for non-certified properties is around €25 per square meter.
In addition to Athens, Thessaloniki has become a new center of attraction for international companies such as Pfizer and Deloitte . Other cities such as Patras and even regions less active in the office sector, such as Crete, are also starting to attract the attention of large companies due to high yields of 6-6.5%.
Cyprus: Commercial Property Market Recovers
In Cyprus, the office market is showing a significant recovery, reaching the highest level of demand in the last five years . The main factor is the active influx of foreign investment into modern Class A office space. Demand for such properties will continue to grow throughout 2024.
Office rents in Cyprus rose by 8.5% in Q1 2024, 10% above pre-Covid levels. Limassol and Larnaca led the way in rent growth and new construction , but Nicosia is also showing a strong recovery as companies move to energy-efficient office properties.
Despite ongoing construction projects, rental rates in Cyprus will remain high due to steady demand and a preference for properties that meet modern environmental standards.
