Dromeus Capital is planning on investing 200m euros in Greek commercial real estate following the creation of a new fund, to take advantage of the low prices. The newly formed investment fund is looking to acquire office buildings in prime locations in the centre of Athens, wherever sound investment opportunities are identified.
The first fund formed by Dromeus Capital in October 2012, Greek Advantage, has already returned 15.2% since its creation.
According to the CEO of Dromeus Capital, Achilles Risvas, the Greek economy is showing signs of recovery, and the real estate market has unusually high returns relative to the risks involved. The cost of office spaces has fallen 40% from its peak before the crisis. In fact, Risvas says, ‘the Greek banks have a large portfolio of assets that they are being forced to sell at the wrong time, for the wrong reasons and at prices that benefit the buyer’.
According to Dromeus Capital, the yields on office spaces have increased by 8.5% since the crisis and are significantly higher than other peripheral European cities such as Sofia and Bucharest. Office rental prices in Athens are EUR 200 per sqm per annum, amongst the lowest in Europe, lower than Belgrade and Lisbon.
The Impact of Technology & Co-working on Commercial Real Estate
At Fractal Property Development we are considering the impact that the emergence of new technologies and co-working will have on commercial real estate. A relatively new concept in Athens, co-working is thriving in other modern cities and its impact on the Greek market, although not imminent, will be considerable.
Investors should be aware of the decreasing demand for private office space in the long run due to technological advances and a shift in office culture to shared collaborative spaces. However, that may be counterbalanced by the large profits that co-working spaces can offer the real estate investor, which can in turn drive up the rents of the best office buildings.
Contact us to find out more about how Fractal can analyse these variables to accurately predict return on investment for commercial property.