Workplaces and investing dynamics

ELIE’s webinar which took place at 7.5.2020 with the subject «Real Estate; Touristic, Commercial, Logistics and Industrial Spaces, Future and Downsides due to  COVID-19»  was really interesting considering the presented outcomes of Greek Real Estate metrics.

We focus on office buildings and Saviilis Dimitris Manousakis presentation. Offices present resilience as real estate opportunities even during COVID-19 pandemic situaation and global crisis.

A great demand for grade A offices is reported for another year, especially for districts that attract business interest suchus the center of Athens and North Sector of Athens. There is great building stock, but only the 32% of it consists of Grade A and B offices.

Some numbers register the trends and facts. Let’s focus on the central Athens district. Rents for grade A offices are 15-24€/m2 where vacancy rate is 2-4%. On North Sector rents are quite lower 15-20 €/m2 with vacancy rate again 2-4% and almost double office building properies. The opportunity to convert office buildings to grade A offices and therefore achieve higher rents combined with higher demand and lower vacancy rates is emerging. For example grade B office in Athens can achieve from 8€/m2  to 20€/m2 after renovation and upgrading. Yields for offices are being optimized as they are compressed to 5,50-6,50% for central Athens and 6,25 – 7,00% for North Athenian Sector.

The way of work is transforming affecting workplaces as a result. It is a chance for office buildings to be transformed and adapted to new conditions. The global discussion on workplaces had already shifted to employess well-being. Today the need for safe and healthy workplaces who foster for people’s well-being is even more demanding under pandemic condition.

Old and outdated building stock can be transformed to high quality and services contemporary workplaces. Flexibility in design will allow for adaptability to changing needs such as more meeting rooms, more distanced workstations, technological support, clean air conditions with natural ventilation and natural lighting.

The challenge for real estate owners, investors and architects is upgrading office buildings to achieve Return Of Investement in both financial terms, raising the demand, rents and compressing yields and in workplaces qualitative features, fostering health and well-being , adapting to changing needs and demanding conditions.