Boston, MA -- (ReleaseWire) -- 04/11/2014 -- Q2 2014 is expected to see further improvement in the Greek commercial real estate sector with the depression in the market showing signs of having finally bottomed out. Our improving outlook for the sector is based on our projections for positive economic growth in 2014 and a steadying export sector. While conditions are slowly improving, the real estate sector continues to face a number of headwinds, including weak demand and falling prices. Meanwhile, rental rates continue to trend some way below predownturn levels.
With a focus on the country's principal cities of Athens, Thessaloniki and Piraeus, the Q214 Greece Real Estate report covers rental market performance in terms of rates and yields across the commercial office, retail and industrial sectors. Our core scenario of rents remaining stable over H2 2014 remains in place and we expect rental rates to retain their year-end levels during the early part of the year. The industry remains fragile, however, and should further economic distress emerge, over the course of 2014 such as a disorderly default, market contraction will be prolonged. The one area of upside is for the second largest city, Thessaloniki, where our in-country sources believe that there may be some scope for growth in the rental market.
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While the government has overcome a number of obstacles, a return to sustainable growth is predicated not just on successful economic reforms, but also on targeting policies at future growth industries and restoring confidence in the market. The short-term outlook for the real estate sector is not likely to restore investor confidence. The risks for the real estate sector as a whole are therefore firmly weighted to the downside, though there are signs that larger investors are starting to find their way back into the market to take advantage of the devaluation of real estate assets over the past few years. Foreign investors are currently behind the bulk of all transaction activity.
- Belgium's Carlson Rezidor Hotel Group has announced plans to open its first hotel on the Greek island of Crete in Q216. The Radisson Blu Beach Resort in Crete Milatos, with 318 guest rooms, will re-open under the Radisson Blu flag after renovation in 2016. This will increase the number of resorts Rezidor operates in the Mediterranean to 10, according to Rezidor's CEO, Wolfgang Neumann, quoted by Europe-Re.
- Q114 brought news of an improvement in financial performance amongst Greece's real estate investment sector. One of the country's largest property investment firms, Eurobank Properties, accounted post-tax profits of EUR 2.7mn in 2013 - the first time since 2009 that the company had reported a profit for the full-year.
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