REIC investment in the country’s shopping centres totals €1.3bn, as these spaces are transformed into multifunctional destinations offering a range of experiences.
They are evolving from simple shops into destinations for socialising and leisure throughout the day, attracting strong investor interest.
According to a new PwC report, Greece’s leading shopping centres are entering a period of increased activity and strategic investment. The Greek shopping centre market remains significantly less developed than the rest of Europe, with the lowest proportion of organised retail space: 59 sq m of gross leasable area (GLA) per 1,000 inhabitants, compared with a European average of 263 sq m.
However, the sector is entering a period of increased activity and investment. There are already around 500,000 sq m of organised retail space in operation nationwide, concentrated mainly in Attica and Thessaloniki, while prospects for further growth are also emerging in the coming years.
Lamda Development has a dominant position in the market, with The Mall Athens and Golden Hall, in its portfolio, while it is building two more similar projects at Ellinikon. Among REICs, Trade Estates specialises in retail parks, with a portfolio totalling €625m.
Shopping centres prove resilient
Notably, shopping centre yields exceed those on Ermou shops, in a real estate sector underpinned by many people’s preference to shop in person.
Specifically, shopping centre yields stand at 6.8%, compared with an average of 6% for shops in prime commercial locations in Athens, such as Ermou.
REIC investment in the sector, which stands at €1.3bn, has risen by 25% over the past four years.
Strong prospects remain
The report goes on to say that the Greek commercial property market is expected to remain resilient and continue to grow, supported by strong consumer demand, the continued superior performance of retail properties in prime locations and selective investment activity.
“Physical retail is expected to remain a key pillar of demand, while e-commerce is forecast to continue growing as a complementary sales channel, supported by improved logistics infrastructure, delivery platforms and stores operating exclusively as fulfilment centres for online orders (dark stores),” according to PwC.