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COVID-19 Impacts on Greece Real Estate

Nicky Simbouras • 8/19/2020

On Wednesday 12 August, Greece reported its highest daily tally since the start of the outbreak in the country with 230 new cases of COVID-19. The country’s pandemic death toll stands at 226. Aiming to curb the spread of COVID-19 in Greece, the Government announced a series of new precautionary measures on 17 August, including extra restrictions for the islands of Paros and Antiparos.

The following measures apply from 17 August through to 24 August: 

  • A 50-person cap at public events in affected areas, with the exception of activities and events where special rules apply such as restaurants, theatres, cinemas etc. 

  • Restaurants, clubs and entertainment venues in Attica, which includes Athens, the Saronic Gulf and Kythira islands, close at midnight through to 7am. The measure also applies to the regions of Crete, Eastern Macedonia and Thrace, Thessaloniki, Halkidiki, Larissa, Corfu, Mykonos, Paros, Santorini, Volos, Katerini, Rhodes, Antiparos. Zakynthos and Kos.

  • Emergency restrictions already imposed on Poros island will be extended to 24 August - bars, clubs and restaurants will be required to close at midnight (from the current 11.00 pm curfew). 

  • Masks are mandatory in army barracks, social solidarity structures, and in refugee and migrant reception and accommodation facilities.

  • Staff on holiday leave returning to work at care facilities, nursing homes, military camps, social solidarity structures, and refugee and migrant accommodation facilities will be required to undergo COVID-19 testing prior to work. 

  • Holidaymakers returning to their homes are strongly advised to wear masks at all times for a week in all public and private enclosed areas and in public when social distancing is not possible.

  • Public or private sector employees who are considered vulnerable and at a higher risk of contracting COVID-19, as of 31 August will be able to choose to work from home or from the back office. 

In the meantime, the Attica regional authority has cancelled all cultural events starting 16 August through to 31 August in its regional divisions: Central Athens, Southern Athens, Northern Athens, Western Athens, Piraeus, Saronic Islands, Western Attica and Eastern Attica. Earlier this month, the European Commission amended its forecast for the Greek economy. Although the Commission still expects Greek GDP to fall by 9% this year, it believes the economic prospects for 2020 in the aftermath of COVID-19 are milder than first predicted, with 2021 expected to see a positive rebound with growth of around 6%. 

 


7 May

Although the rapid response from the Government to implement lockdown was critical, in a country heavily reliant on tourism and with a significant proportion of small and medium-sized companies, the effects of the pandemic are powerful in the economy. The Government is trying to mitigate this impact, it voted the measure of 40% reduction in the commercial rent of March and April 2020 to all enterprises affected by the pandemic among other cash flow boost measures. The Government announced plans for a gradual return to normality starting on 4 May. The impact of the pandemic on Greek real estate is apparent. Although transactions at an advanced stage are proceeding with difficulties, in purchaser due diligence mostly international players are adopting a cautious approach placing on hold their short-term new activity. However, many domestic investors continue actively looking for opportunities in real estate, a trend which progressively expands every week.   

Construction activity has been slowed down which is expected to cause delays in the completion of new office, industrial and residential buildings, and refurbishments. Office occupiers have mostly postponed new leasing transactions, while under review of their short-term plans are interested in shorter and more flexible lease terms. Retail and hospitality sectors are the hardest hit segments, similarly to the other European markets. The logistics sector on the one hand is facing difficulties due to suspended deliveries of goods on the other hand, the increasing demand for e-commerce is helping the sector.  

During Q1 2020, all asset classes experienced stable YoY performance due to increased activity during the first two months of the year. Quarterly preliminary data shows reduced investment volumes YoY in 1st Quarter of 2020 while the closing of Porto Carras sale in mid-April which has been agreed before COVID-19 will boost transaction volume in 2nd Quarter. However, we are expecting a rather low Q2 & Q3 and hoping for a Q4 eyeing for a stronger Q4 activity.  

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