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COVID-19 Impacts on Greece Real Estate

5/7/2020

Nicky Simbouras, MRICS 
Managing Director 
Cushma & Wakefield Proprius

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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