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Greece: Case Study Voukourestiou Street, Kolonaki Q2 2019

18 Jun/19

From Anchesmou to Voukourestiou Street

Anchesmou street, as referred to in maps dated back in 1880, was the road connecting Stadiou street to Lycabettus. Back then, the road was not bestowed of the recognition and the commercial value it has today. It took decades for Anchesmou street to transition from an ordinary street with residential properties to one of the most significant streets in Athens, the road known today as Voukourestiou Street.

What marked this transformation was individuals with background from arts and sciences gravitating to Kolonaki, a prime area in the center of Athens, transmogrifying the town not only to a meeting point but also to a residence of the elite. As new residents came in, infrastructure and road works in Kolonaki area were developed. It is worth mentioning that the first road to be pedestrianised was Voukourestiou street, a fact underlying the importance of a street that was already gaining in commercial value.

The map below is an excerpt from the Plan of Athens, created by Thuillier L. The excerpt shows Anchesmou (Voukourestiou) street leading up to Lycabettus and provides an overview of the different parts of the city that it connects.

Source: Gallica.bnf.fr, edited by Delfi Real Estate

Voukourestiou street traverses three of the busiest roads in the center of Athens: Stadiou, Panepistimiou and Acadimias street. These roads are also home to the Academy of Athens, University of Athens and the National Library of Greece (collectively known as the Athenian Trilogy) as well as the Old Parliament. The landmark buildings provide evidence of the historical importance of the area but nonetheless, commercial buildings have a significant impact for Voukourestiou street.

Prestigious hotels, malls, numerous restaurants and historical cafes are within walking distance, but what makes Voukourestiou street distinguishable is the fact that it has attracted top tier boutiques, shifting from a residential neighborhood to one of Athens’ most premium luxury retail streets.

Voukourestiou pedestrian street

Downtown Athens is the capital’s leading commercial and business center. Offices around Syntagma Square and retail spaces in Ermou street are just some examples of properties that are in high demand from investors and corporations. The Greek economy’s recovery, in conjunction with the increase in tourist arrivals, the Golden Visa Scheme and the growing pace of short-term rentals have supported price levels in the center of Athens.


Market Trends Overview

The recent market momentum has resulted in a low supply of quality spaces in Voukourestiou street. As a prime street with luxury brands, commercial properties in Voukourestiou are a target of REICs and investors longing to include them in their portfolios.

Trastor REIC has acquired two properties in Voukourestiou street. In January 2019 they acquired a high-street retail store (Ermenegildo Zegna) on 24 Voukourestiou street with an area of 227.15 sqm for €6 million (€26,414 per sqm).

Ermenegildo Zegna store that has been acquired by Trastor REIC

In October 2018, they acquired a high-street store (Jaeger-LeCloultre) on 24 Voukourestiou street & 4 Valaoritou street with an area of 138 sqm for €2.5 million (€18,116 per sqm).

Retail rent prices range between €250 - €300 per sqm per month in Ermou street, an average of €275 per sqm, signifying a 12,2% change (end 2018 – March 2019). However, comparing it to Voukourestiou street, it is evident that rental prices have remained fairly constant during the same period of time at around €80 to €120 per sqm per month, with a possible explanation being the anchor lease agreements, which are not renegotiated during their term.

Voukourestiou street has preserved its residential character along with the commercial activity that takes place in the wider area of Kolonaki.

We notice an undersupply in retail properties, making it hard for investors and funds to expand their portfolios with prime, high yielding properties in the high-street retail market.

The Greek retail market has demonstrated signs of improvement, triggered predominantly by a more stable economic environment with growing, albeit sluggish, private consumption. Data from Cartier, a luxury brand, dating back to 2012 – a year where Greece was still under strict fiscal adjustment- show that revenues in Voukourestiou street were supported by Chinese tourists visiting Athens, while the share coming in from locals was shrinking as disposable income rates fell.

According to European Travel Commission, Chinese tend to save about a third of their vacation budget for luxury purchases. In the period following 2012 and the introduction of the Golden Visa scheme, the number of tourists coming from China has increased substantially. In 2018 there has been a growth of 22% in arrivals from China compared to 2017, a trend that is expected to hold.

Though demand from foreign tourists is high, we should expect that sources of revenue, and specifically the contribution from local customers, will increase, as long as the mix of fiscal policies adopted is oriented towards growth, in order to support progressively higher levels of income.