Rent in Greece: how rising prices are killing Greek business

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Renewing rental contracts has become a real headache for many traders. Entrepreneurs who need to renegotiate their lease are faced with with an unpleasant surprise: the owners demand an increase from 30% to 100%, that is, up to double the price.

As Cosmas Theodoridis, president of the European Association of Realtors, explains in an interview, given that commercial real estate is usually leased for 6 or 9 years, many properties were leased at low prices that do not correspond to today's conditions. This happened because the market was then under pressure from the Greek crisis.

Owners, rentals and popular retail spaces

Tenants are now demanding that this 6-9 year increase be factored into the rent. Mr Theodoridis gives the example of a store in Kifisia, located in a very central location, which was rented for 2,500 euros for the last six years, and when the contract expired, the owner asked for 4,000 euros.

The entrepreneur agreed to pay the additional price because he knew the commercial value of the place and understood that he could get more if he put it on the market for rent (at least 5,000 euros).

SOS from the Athens Trade Association

The same phenomenon is described by the vice-president of the Athens Trade Association, Makis Savvidis. He notes that commercial property owners in central Athens and other commercial areas are demanding rent increases of up to 100% when contracts are renewed.

For example, on Ermou Street, the owners are asking for an increase of 30%, and depending on the attractiveness of the place, the increase can be 100%. “Greek companies cannot cope with such high rental rates and competition from multinational companies who are willing to pay any amount for the best locations,” adds Savvidis.

The “offensive” of transnational networks

A striking example of how multinational companies are “attacking” commercial real estate in Athens is the store on Ermou and Vouli Street, where until recently a Greek shoe company operated. The rent she paid was around 11,000 euros and at the end of the contract the owner asked for 22,000 euros. A small shoe company could not cope with this amount of money and decided to move to a cheaper location. However, the store was rented out not only for 22,000 euros, but also for 25,000 euros to a well-known multinational company that was waiting for its chance.

“This situation, fueled by multinational companies, was already observed from 2000 to 2010 and did not have a good outcome for anyone,” emphasizes Savvidis. – What is happening now on Ermou Street and on the surrounding streets happened then in Kalonaki.”.

Will Greek traders disappear from Ermou?

Currently, commercial properties on Ermou Street are rented for up to 450 euros per square meter per month. This price will shock most Greek entrepreneurs, as it could be the price of purchasing the object. Savvidis warns: “If we don’t change the situation, in five years there won’t be a single Greek company left on Ermou Street.” The trade association supports Greek companies because each of them creates jobs and contributes to economic development.

The most expensive streets in Greece and rent

According to Cushman & Wakefield Proprius data for the first quarter of 2024, primary rentals on Ermou Street reached €290 per square meter with a yield of 5.25% per annum. Ermou is followed by Glyfada Street and Tsimiski Street in Thessaloniki, with 150 euros per square meter (6% yield for both). The greatest increase in profitability is observed in Kifissia, Piraeus, Patras and Heraklion.

According to experts, the list of the most commercially attractive streets with rising rental rates in the center of Athens again includes Stadiou Street, the beginning of University Street, Omonia and Plaka.

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