Although a lot of smaller boutique operations are making their mark in the Greek hotel market, some global players are spending big in the sector.
Canada’s Four Seasons opened its first hotel in Greece in 2019 in a €650 million investment. U.S. real estate company Hines opened a luxury hotel on Syngrou avenue in Athens, while the Anglo-German TUI Group has also been expanding operations across Greece.
But there are risks, experts warn. The sharp increase in accommodation is outpacing the expansion in visitor arrivals, and growth in the tourism sector is expected by many to ease in 2020.
Improved business sentiment is boosting demand for office space, while buying interest for stores located in key shopping areas is pushing prices higher.
For some industry specialists, however, the price rises are happening too quickly for an economy that has only recently started to recover.
A 2019 Cushman & Wakefield report showed that Ermou street, which leads to Syntagma Square in central Athens,
was the 15th most expensive shopping street in the world in 2018, climbing four places from the previous year.
In fact, renting retail space on Ermou street costs more than leasing space in the main shopping districts of
Amsterdam and Prague.
Other property assets with appeal include large stand-alone assets on highways, such as supermarkets, car dealerships, and do-it-yourself (DIY) stores.
Strong upside potential and yields that stand above European averages are drawing foreign investors to the sector. In April, the UK’s Invel Real Estate Management upped its majority stake in NGB Pangaea REIC (Pangaea), the largest real estate investment company (REIC) in Greece. The amount invested by Invel (and its partners) in Pangaea totals more than €1 billion since it initially took a position in the Greek REIC in 2013. U.S. investment firm Värde Partners also owns a majority stake in Trastor REIC.