As Europe’s real estate sector faces significant challenges due to inflationary pressures and rising interest rates, the property markets in Cyprus, Greece, and Serbia remain resilient, offering attractive opportunities for both local and international investors, according to a regional property investment expert.
Danos Group’s General Manager, Yannis Paraskevopoulos, is speaking at an event in Nicosia, where he will argue that the outlook for these three countries has been notably positive, driven by robust demand across both residential and commercial segments.
Danos International Property Consultants and Valuers is hosting the investor event at the Cleopatra Hotel, at 6pm on Monday, where the discussion will focus on the fact that foreign investment continues to be a cornerstone of the real estate market in Greece and Cyprus, particularly in the commercial sector.
Both countries have seen consistent demand from local buyers, which, when combined with strong international interest, has supported market stability and growth.
Simultaneously, the demand for Grade A office spaces has remained strong in all three countries, reflecting a broader return of confidence in commercial real estate. This trend has been particularly pronounced in Greece, where the office market is bucking the downturn seen in other European countries.
The discussion will focus on Danos’ expertise in facilitating large-scale projects and will explore key investment prospects in both countries, including opportunities in the office and commercial real estate sectors.
Greece: A Strong Market for Foreign Investors
Studies by Danos shows that the Greek office market continues to present compelling opportunities for investors.
According to data from the Bank of Greece, 54.2% of the €2.1 bln in foreign direct investments made in the country during the first half of 2024 was allocated to real estate acquisitions. This amounts to €1.14 bln in foreign real estate investment, representing a new high and building on the trend that started in early 2023.
During the first quarter of this year alone, real estate investments accounted for 43.3% of total foreign investment, with €520 mln of the €1.2 bln flowing into the sector.
The increasing demand for Class A office space is largely driven by Greece’s growing economy and the influx of new investors who are particularly focused on properties that meet environmental, social and governance (ESG) criteria.
According to Danos’ Paraskevopoulos, “ESG has become a key differentiator in the market, with a marked preference for sustainable, energy-efficient properties. This shift in investor sentiment is fueling the construction of new certified office spaces, which aim to meet both the rising demand and the evolving standards for modern work environments.”
Data compiled by Danos Group showed that around 75% of all recent rental agreements in Greece have involved high-end buildings that offer quality facilities and high energy efficiency. These properties are seen as essential for companies looking to align with ESG mandates.
Athens remains one of Europe’s most affordable cities for renting modern office rentals, providing a competitive edge over other major capitals. The average monthly rent for new certified buildings in Athens now exceeds €30 per square meter, while modern but uncertified office spaces are leasing for around €25 a square meter. Despite the strong demand, the availability of these types of properties remains limited, with vacancy rates for certified buildings below 5%.
Beyond Athens, Thessaloniki has emerged as a key destination for multinationals seeking office space in Greece.
Major corporations, including Pfizer, Deloitte and Chubb, have expanded their operations in the city, making it a hotspot for foreign investment. Additionally, secondary markets such as Patra are seeing increased interest from large companies like PwC and EY, which are expanding their footprint with new office developments.
Even regions like Crete, traditionally less dynamic in the office sector, are now offering promising opportunities. Cities like Chania and Heraklion have witnessed impressive yield rates of 6% to 6.5%, making them attractive destinations for investors looking for stable returns.
In total, investments in office space across Greece exceeded €600 mln in the first half of 2024.
By 2026, an estimated 250,000 sq.m. of new office developments are expected to come online, excluding the multi-billion Ellinikon project, Greece’s flagship urban redevelopment project.
Despite these upcoming developments, rental prices are expected to remain elevated due to the limited supply of certified office spaces.
Cyprus: Recovery in Commercial Real Estate
Cyprus has also seen a significant recovery in its office property market, which has reached its highest demand levels in five years. The market is benefiting from strong foreign investment, particularly in modern, Grade A office spaces. Demand for these high-quality properties is expected to remain robust throughout 2024, with no signs of slowing down.
Office rental prices in Cyprus have surged by 8.5% year-on-year in the first quarter of 2024, bringing them to about 10% above pre-pandemic levels in 2019. This recovery has been particularly pronounced in Limassol and Larnaca, which have led the way in terms of rental growth and new developments.
The capital, Nicosia, is also seeing a steady recovery as businesses transition from older office buildings to state-of-the-art, energy-efficient facilities.
Despite ongoing construction projects, office rents in Cyprus are expected to remain high, driven by sustained demand and a growing preference for properties that meet new environmental standards. With its high quality of life, strategic location, and favourable tax system, Cyprus continues to attract global companies that are setting up local operations, further driving demand for business spaces.
Danos’ offices in Cyprus have seen an influx of inquiries for office spaces and showrooms.
Recently, Danos facilitated the sale of office facilities valued at around €40 mln to a Real Estate Investment Company (REIC) from Greece, underscoring the cross-border interest in the Cypriot market.
