Athens office rental market skimping on discounts

By Nikos Roussanoglou

Athens offers the smallest discounts in rental rates for professional properties among 21 cities in the Europe, the annual report by Savills estate agents has found.

The average lease rate discount recorded in the Greek capital was 2.5 percent, the UK-based company found, which translates to free rent for a period of just a-month-and-a-half on a five-year lease for a renovated office space at a prime location.

According to the study, after the Athens market, the smallest financial incentive for individuals or companies to rent professional premises is found in the German cities of Berlin and Hamburg (where discounts average at 5 percent), followed by Frankfurt and Dusseldorf (both at 6.7 percent). In contrast, markets where demand for professional space is traditionally very high, such as in Paris and particularly in La Defence neighborhood, and London, continue to offer the best incentives in Europe by reducing rental rates by as much as 20.8 and 18.3 percent respectively, meaning 13 and 11 months free tenancy in a five-year period.

According to experts, offering several months of free rent to new tenants on long leases is a fundamental part of how mature markets work and how they attract prominent entrepreneurs and companies to their commercial districts.

The friendliest city in Europe to rent professional space is Milan, where lease discounts can reach as high as 25 percent, translating to 15 rent-free months over a period of five years.

On the flip side, parts of Europe where incentives are strong also have very high rental rates, compelling property owners to follow more aggressive tactics to attract new clientele. Another factor contributing to bigger discounts is the level of competition in any given...