The new trend in Greek Malls

Athens opened it’s first large shopping mall just 18 months ago and with it’s opening, the floodgates opened with many other real estate developers looking at opening similar projects with 10 already in the pipeline. Experts estimate that these new mallls will add over 380,000 square metres of retail space by 2010 however they are confident that this will not over-saturate the market.

When it comes to amount of shopping space per resident, Greece ranks as one of the lowest countries with just 50 square metres of retail space for every 1,000 people in 2006. The EU average is more than 150 square metres for every 1,000 people.

Real estate developers have watched the first mall with interest, and it looks to be a lucrative way to develop land. The major sticking point is whether the local population will decide to leave their small, downtown shopping areas in favour of longer journeys to reach these large shopping malls. With downtown shopping areas having fairly high rents, there is a large demand for cheaper rent, so the new breed of shopping mall should have no difficulty in attracting the retailers, at least, to move in. As a comparison, commercial rent in the centre of Athens can reach up to about $350 per square metre per month; shopping centres tend to be much less – maybe as little as $65 per square metre per month.

Two of the proposed areas for retail redevelopment are sites built for the 2004 Olympic Games. The Galatsi Olympic Hall held the table tennis and rhythmic gymnastic events but by the end of 2008 will be turned into a huge shopping centre. A multistory building in northern Athems that was built for broadcasting the Olympics is being turned into 40,000 of shopping heaven with work scheduled to be complete by 2009. This project is being headed by Lamda Development, and it was one of their earlier works that started the shopping mall trend.

Lambda Development opened up a mall towards the end of 2005. It housed over 200 stores across 58,000 square metres with shops, restaurants and cinemas all under one roof. The mall gave local Greeks huge selection of products at a convenient place. In a city where traffic congestion can get really bad, over 2,000 parking spaces for shoppers is a strong lure too.

Greece is in the middle of a strong economic growth period along with increased credit and a drop in unemployment have helped to fuel retail activity. The country’s GDP is expected to rise by 3.9% this year, one of the highest rises in Europe. This is also drawing other European brand names into Greece, increasing the demand for retail space.

It’s not all good news though – developers have to struggle through a minefield of outdated laws, zoning restrictions and a lot of red tape before they can start to build. Greece also has one of the highest property transfer taxes in the EU – running between 9 and 11% – which the buyers must pay and this does deter some spending.

However, if you can deal with some of the mind-numbing bureaucracy and red-tape and are not averse to a little risk, buying up some prime real estate and developing it into the next big shopping mall could see huge returns on investment.

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