The limited supply of modern income-producing properties—whether offices and logistics facilities, or hotels and retail properties—continues to keep both values and rents at high levels, while yields are stabilizing.
According to revised data from the Bank of Greece, sale prices for high-specification office buildings rose in 2024 by 7.2% in Athens and 6.3% in Thessaloniki, while nationwide the increase stood at 5%. During the first half of this year, prices rose further by 0.9% in Athens (compared to the second half of 2024) and by 1.7% in Thessaloniki. Likewise, in the retail market, prices in 2024 increased by 8.8% nationwide, with Athens recording a 10.4% rise and Thessaloniki 6.8%.
The low level of investment activity during the 2010–2018 period, when very few new commercial buildings were developed, continues to have a significant impact on the shortage of supply, especially when combined with the gradual obsolescence of older buildings constructed between the 1970s and the 1990s. Moreover, even modern office buildings developed on a large scale—particularly during 1999–2005—are now 20–25 years old and are considered “outdated” under current European standards.
Similar trends are observed in the logistics sector, where every new large-scale facility (15,000 sq m and above) is leased well before construction is completed. In the hotel property market, investor demand is triggering a new wave of investments, both in Attica and in other regions of the country.
Therefore, property development companies and owners/users are being called upon to implement substantial investment programs, both for new buildings and for the upgrading or even repurposing of existing properties, so that the current building stock can be modernized and meet today’s needs.
However, the major disruption caused in the market by the Council of State’s ruling on the New Building Regulation (NOK) and the abolition of building bonuses has significantly delayed many projects, due to the need to redesign them. This appears to have also affected the course of construction activity. In the Bank of Greece’s recent Interim Report on Monetary Policy, it is noted that “during the first eight months of 2025, construction activity for commercial-use properties (ELSTAT data) recorded a decline in the number of new permits compared with the corresponding period of the previous year, and an increase in terms of buildable volume (-12.5% and 7.6% respectively). Trends across individual investment property categories were mixed. Specifically, new building permits for offices rose by 36.0%, while in terms of buildable volume a decrease was recorded (-48.3%). The number of new permits for retail stores during the same period declined (-6.7%), whereas volume (in cubic meters) increased by 42.5%. Finally, new permits for hotels fell both in number and in total buildable volume, by 45.6% and 22.4% respectively.”
This is a development that is expected to be reversed in the coming months, as demand remains strong. In the office market alone, according to data from property consultancy Proprius, development projects totaling 350,000 sq m of new buildings are expected to be implemented. Of these, 241,558 sq m are already under construction, and for 51% of this space lease agreements are already in place—an indication of the strong demand for modern, high-energy-efficiency office space. The remaining 108,050 sq m are at the stage of planning and licensing approvals.
In this context, based on data collected by the Bank of Greece and the results of the Commercial Property Market Survey, during the first half of 2025 the capital of Real Estate Investment Companies (REICs), other investment portfolios, and property development companies was directed mainly toward the acquisition or development of high-specification, bioclimatic office buildings, while significant investments were also recorded in special residential uses with high yields. Prime yields for high-specification offices in the capital’s Central Business District (CBD) ranged between 5.4% and 6.6%, marginally lower than in the previous half-year, while prime yields for high-specification retail properties in the most commercial locations of central Athens ranged between 5% and 6%.