Thessaloniki Retail Property Market

General

Thessaloniki is considered a very interesting market, second in terms of volume nationwide following Athens, with a population of 1,25 million inhabitants, it depicts 10,5% - 11% of the national GDP, while the general area of Northern Greece - Macedonia and Thrace - exceeds 20% of the national GDP. The port of Thessaloniki strengthens its market place, due to the proximity with most of the Balkan countries, which nowadays is becoming one of the main gateways for Southeastern Europe.

Commercial Property Market

Since the early 1990's the city has become the central interest of development plans for national users, international users, developers and investors. The commercial property market sale and rental values throughout the last decade have endured a stable annual growth. Indicatively, the sale values of the retail property market are rising annually according to the official inflation rate plus a rate ranging between 2% and 5%. The city center concentrates most of the retail and office market activity. There are two to four streets, which dominate and absorb the majority of the demand.

Office Market

Local and national groups mainly drive the office sector. The development of the port is expected to substantially increase the demand for office space. Over the next few years, major infrastructure works are to commence - underground subway network (totaling 11 km's), under sea tunnel (totaling 4 km's) that will connect the port with the residential part of the city- and is expected to reduce the existing office vacancy rate. Over the last few years the public sector has become a major user through the necessity to renew a significant number of its existing leases.

Retail Property Market

The majority of international retailers operating in Greece are present within the retail market of Thessaloniki. Some of which commenced their operations in Greece from Thessaloniki during the late 90's and others have encountered their most successful performances and sales through their Thessaloniki operations.

Before the inauguration of the two major regional shopping and leisure centers, the downtown retail market dominated the majority of all retail activities within Thessaloniki.

Tsimiski Street is the "high street" of the city and of Northern Greece in total, and in terms of rental values is ranked within the top-3 Streets nationwide and amongst the top 50 within Europe. It attracts the majority of international and national retailers (i.e. Inditex brands, Marks & Spencer, Mango, Benetton, Gerry Weber, Fokas Department Store, Notos Galleries, Hondos Center, Glou etc.) at the time where other international retailers (i.e. Sfera, Footlocker, Promod, Fnac, Kotton, etc.) are eagerly seeking to lease prime retail space for their Thessaloniki operation.

Other retail streets within downtown Thessaloniki that compete with Tsimiski Street are Agias Sophias, Mitropoleos, Aristotelous, Ermou and Egnatias.

Hypermarkets - Retail Parks

During the mid 1990's, high volume retailers i.e. Carrefour, Metro Group - Makro, Praktiker- and in early 2000 IKEA and 2006 Media Saturn developed a very successful presence within the Thessaloniki region, mainly choosing to establish themselves within the greater Eastern section of Thessaloniki.

In close proximity to the hypermarket sites new retail parks have been developed. Georgikis Scholis Avenue, a major arterial road providing access to the "Macedonia" International Airport, has faced a tremendous growth in sale values. This factor has transformed Georgikis Scholis Avenue into a prime retail market, which in certain circumstances competes with downtown Thessaloniki. Rental values have also risen significantly.

Source: Lambert Smith Hampton