The Greek economy has entered a period of unprecedented crisis as a result of a combination of the international financial crisis and mounting national debt burden, according the recent European research of Savills.

The recession has caused stagnation in the property markets, with most companies freezing any expansion plans, while others are downsizing or looking for cheaper space in an effort to reduce costs. Falling retail sales and industrial production have caused a slump in demand for warehousing space and a number of newly constructed warehouses remain unoccupied, especially in the more expensive locations.

Development activity has also frozen, while any type of investment decisions is on hold, until it becomes clearer what the impact of the bail-out plan and the structural reforms will be on the economy. In this environment there is downward pressure on rents, while capital values can fall due to the inactivity in the market and higher risk premia attached.

Prime rents in North Athens are in the region of €6/sqm/month showing a yield of 8%. Other important warehousing markets are Athens South (€5.3/sqm/month), Voiotia (€4.3/sqm/month) and Thessaloniki (€3.2/sqm/month), with relatively higher yield levels.