Real Estate Investme Rating January 2024

At the top of the Investment Pyramid is the AAA category where, at the level of European countries, we meet Denmark, Germany, Liechtenstein, Luxembourg, etc.

According to the rating agencies and our studies, we place the retail stores in very central locations such as Ermou Street in Constitution or in the center of the market (usually pedestrian streets) of each city with named tenants. In terms of apartments, I would limit myself only to the area of Kolonaki and the historic center and indeed to properties with a view of the Acropolis, as they are one of the few places where it is very difficult if not impossible to increase supply and "competition". We could certainly include other areas such as Oia in Santorini, but there the volume of real estate is very small. Here the returns are low, i.e. 2-3% per year

In the next Class AA, we have Austria, Finland, France, England and even the Czech Republic, and the Apple stock yield here starts at 3% and flirts with 4%.

In the Greek real estate market this means large stores, in commercial areas with "named" users and multi-year leases for residences, while here we would place central points of the northern suburbs such as Psychiko, Filothei and the center of Kifissia, wherever the demand is it is stable, with little ups and downs in values and very little stock of land for development. However, these areas have a specific buyer/tenant profile, are not related to tourism and short-term rental and do not belong to the highest tier.

In Category A we meet Countries such as Lithuania, Slovakia, Malta, Spain and Poland and even the share of Mercedes Benz and Toyota. Returns start at just under 4% and can go as high as 4.8%.

Here we place the retail properties in second-class commercial areas, close to the market, while the residential properties would be the apartments in areas such as Pagrati, Marousi, Chalandri, Ilioupoli, Agios Dimitrios, Cholargos, P. Faliro, etc. These are areas where the demand for renting is high (and for short term) however the demands of the consumer public are high as are the rents. The investment risk is found in the fact that there are plenty of apartments with an average age of 40-50 years that can be renovated at any time and in addition there are still unexploited plots of land (detached houses) which, with the relatively high interest rate, are given to build new apartment buildings, therefore the supply of real estate will increase.

In the BBB tier, are Portugal, Croatia, Italy, Cyprus, and the Hyundai stock. Yields are in the range of 4.6% to 5.5%.

In terms of the Greek real estate market, they are buildings/office spaces in central locations, retail stores in moderate commercial locations and residential properties in areas such as Kypseli, Exarchia, Gazi, Nea Smyrni, Piraeus, Agia Paraskevi, Galatsi. Here the rental values are rising, the demand is alive but the supply of properties is dynamic, especially as their value increases, so does the possibility of renovation or new construction.

I will also stand at the BBB level - which, in addition to Hungary and Romania, also includes Greece. Here the yields reach up to 6.5%. In real estate, there is the category of office spaces in non-commercial areas, in indifferent commercial retail stores and in residential areas such as Patisia, Moschato, Aigaleo and Peristeri.

We move on to the BB tier, where we have North Macedonia and Serbia and even the Tesla share, with a yield of 6.3% to 7%. In this particular category we place the areas of Glyfada, Voula, Elliniko (not Project Ellinikon) for one simple reason: rental and market values are high, perhaps at the highest point of the last 20-30 years, but the supply of real estate is expected to skyrocket both in residential but also in tourist buildings, shopping centers, etc. We expect an upgrade of the southern part of the Attica but with a simultaneous increase in supply which will lead to a decrease in values so the risk is high.

And we go to position B, where the countries of Albania, Turkey and Bosnia-Herzegovina are located, where the returns exceed 10%. In this category we classify the regions of Attica such as Omonia (from Athena Street and east) and Sepolia, Agios Panteleimonas, etc. They are areas with a high supply of real estate, low rental interest and the investment returns are expected to be high with a high risk, however

Finally in tier C is Ukraine, the yield can be very high above 15% and we have areas that do not have much development and are far from the center of Athens, the interest to invest is non-existent, the prices are very low and deposit their hopes for redevelopment projects to generate interest.