NAI Hellas_Logistics Property Makret Report_2015
Published on: Mar 3, 2016
Transcripts - NAI Hellas_Logistics Property Makret Report_2015
Logistics Market Report
PRIMERY NATIONAL POLES
SECONDARY NATIONAL POLES
NATIONAL ROADS UNDER CONSTRUCTION
RAILWAY UNDER CONSTRUCTION
Efficient and reliable logistics services are essential to
the effective distribution of goods in a market. The location
of logistics activities and the infrastructure to support them
are the most important components for the competiveness
of the sector. According to the World Bank, a logistics
zone should be viewed as an integrated space whose
competiveness is determined by a variety of factors:
connections with backbone transport infrastructure (rail,
road, airport and ports); access to a qualified workforce;
charges (fees and taxes) for services; proximity to
complementary activities (horizontal integration); distance
from the consumer and end-markets; potential for two-
way transport (to avoid empty loads on return trips);
cost of land and construction; social, environmental and
Greece is geographically and economically advantageously
located. Being the South-eastern most point of mainland
Europe with 45 airports (15 international), over 140
seaports (16 international) and access to European road
and rail corridors, Greece has the potential to become
Europe’s primary gateway.
Road transport is the dominant means of freight
transportation in Greece due to the small distances
between its major cities, the country’s geomorphology as
well as the, until now, general lack of comprehensive rail
Source: PanHellenic Logistics Survey 2014-2020 University
of Aegean, processed by NAI Hellas
In the EU Cohesion Policy 2014-20, Greece was
granted a total of €26.0bil. from the European Regional
Development Fund (ERDF), the European Social Fund
(ESF) and the Cohesion Fund (CF). According to the
Operation Programme €4.3bil. will be allocated for
the development of infrastructure, environment and
sustainable development. The objectives of the transport
sector program are to promote integration of basic
infrastructure (road, rail, ports and airports), the promotion
of combined transport and modernisation of the transport
system, improving road safety and the development of
sustainable and ecological urban transport. For the same
sector, an additional €783.0mil. was granted via the
Regional Operational Programmes.
During the past decade, Greece’s road network has
been substantially improved. The main motorway artery
PATHE (E75) that links the southern port of Patras with
Athens and Thessaloniki and then connects Greece
with Central Europe via the European road E79, has
been undergoing continuous upgrades to that of high
standards. Egnatia Odos motorway (E90), one of the
largest infrastructure projects in Greece, recently
connected the northern part of the country from the
eastern port of Igoumenitsa to Alexandroupoli in the
west and the Turkish borders.
The third major motorway system in the pipeline in Greece
is the Ionian Odos motorway that will connect the whole of
western Greece from Igoumenitsa to Patras, linking three
ports (Igoumenitsa, Astakos and Patra) and three airports
(Ioannina, Preveza and Araxos).
Greece has 45 airports; 15 international, 26 domestic and
4 municipal airports. The Athens International Airport that
opened in 2001 is an ultramodern facility. It is considered
to be one of Europe’s best airports, with immediate access
to rail and road networks. A number of Greece’s airports
are undergoing significant infrastructure and facility
upgrades while there are provisions for the construction
of new airports. In the meantime, the privatisation of 14
regional airports is underway.
Greece has over 140 ports that serve passengers and
cargo,16 of which are international. Piraeus is the main
cargo port of the country followed by Thessaloniki, Patras
and Igoumenitsa ports. Port infrastructure in Greece is
constantly being upgraded and improved to meet the
needs of cargo shipping. Greece has very good maritime
connectivity; the country ranks 25th in the world according
to the Linear Shipping Connectivity Index (LSCI). From
2011 (69th place) to 2012 (54th place), the country’s LSCI
ranking showed significant improvement due to improved
maritime connectivity that was a result of reforms that led
to the growth of trans-shipment activities in Piraeus.
Piraeus Port is one of the busiest ports in Europe. In 2013
the port was the 10th fastest developing port globally. A
€380 mil. investment by COSCO, a multinational enterprise
specialising in global shipping and modern logistics, was
recently completed in Pier II and an additional €230.0mil.
investment began in January 2015 and is expected to
be completed by 2018. Important changes will be made
to the technical features of the port allowing for the
serving of 24,000 TEU capacity vessels (the biggest in
the Mediterranean Sea). COSCO’s investments in the port of Piraeus’s Piers II and III
increased freight inflows from the Far East. Piraeus’s container terminal flow increased by
15.3% in 2013, given the completion of works in the west part of Pier III.
Piraeus Container Terminal (in mil. TEUs)
2012 2013 2014
Piraeus Port Authority S.A. (PPA) Pier I 0.62 0.64 0.59
Piraeus Container Terminal S.A .(PCT) Piers II & III 2.10 2.51 2.98
Total TEUs 2.74 3.16 3.57
Piraeus has become one of the most important transit ports internationally and plays a
primary role in China’s plans for Greece and the Balkans and is slowly transforming into
Asia’s southern corridor into Europe. COSCO plans to invest a further €600.0mil. on the
wetern side of Pier III that will allow the total transportation of 7.5mil. TEUs p.a. for Piers
I, II and III, bringing Piraeus to rank among the top five ports in Europe. Moreover, the
‘P3’ alliance between Maersk, MSC and CMA-DGM maritime groups plan to use fewer
but larger capacity ships (of almost 18,000 TEUs) that will benefit Piraeus’s port as it will
be one of the few ports that can serve ships of such size with its new super-post cranes.
Phase one of the sale of 51% of Piraeus Port Authority (PPA) has been completed, with
three investors – Cosco Group Ltd, APM Terminals (subsidiary of Moller & Maersk) and
International Containers Terminal Services (ICTSI) having passed the phase two. The
port’s competiveness is expected to further increase with the recently completed railway
connection to the freight centre ‘Thriassio Pedio’ which will increase the multi-modal
container traffic going through the Piraeus container terminal.
Thessaloniki’s port is a natural gateway for the regional economies (Bulgaria, Romania
and FYROM). The port has the capacity to manage 600k – 800k TEUs p.a. Emphasis is
given to transit activities that translate into €1.5 - €2.5bil. revenues for the local region.
Investment interest has also been apparent in the sale of 51.0% of the Thessaloniki
Port Authority (THPA) where eight international companies are considering entering
the bidding process, including APM Terminals, Mitsui & Co and International Container
Terminal Services (ICTSI).
The port of Igoumenitsa is currently undergoing significant upgrade works. It experienced
a 10.0% increase in the number of visitors and cargo in 2014. Enhancement works of
‘Phase C1’ include the construction of new platforms, dredging of existing ones, a cargo
terminal and possibly a container terminal. ‘Phase C2’ includes plans for the development
of two ring piers and infrastructure for rail connection (Ra-Ra).
The Greek railway system is essentially north to south and connects Patras, Athens
and Thessaloniki. Emphasis has been placed on upgrading its infrastructure (tele-
commanding and signalling works are underway) with improvements of the rail bed and
the laying of new tracks to minimise transport times, as the main priorities. In recent
years TRAINOSE (subsidiary company of the Hellenic Railways Organisation) has been
undergoing significant reforms to increase its position in freight transportation and has
recently attracted new business. Every week three trains leave from COSCO’s facilities
for Central Europe (Hungary, Slovakia and the Czech Republic). The agreement between
TRAINOSE and PCT (COSCO’s subsidiary) has a five days delivery clause and the first
tests managed to deliver cargo in just three days. The deal calls for transport of 20,000
TEUs annually but demand can reach ten trains per week or 100,000 TEUs p.a.
In May 2015, completion of connecting the new cargo terminal of Alexandroupoli’s port
to the railway network was achieved. The project involved a 1,770 m rail line which cost
€3.1 mil. The project connects the cargo terminal with the
rest of the European railway network which allows for the
logistics chain to bypass the Bosporus.
Moreover, the EU is financing the European Rail Freight
Corridor 7 (RFC7) which will connect Athens to Prague
via seven different European countries and aims to offer
reliable transport services based on harmonised technical
and procedural requirements. RFC7 will cross Prague,
Vienna, Bratislava, Budapest, Bucharest and Constanța.
The rail-corridor guarantees an effective liaise between
Central and South-eastern Europe as well as Asia, via the
ports in the Black Sea and the Aegean.
Rail is an important and competitive mode of transport for
medium to long-term shipping and is essential to enhance
Greece’s chances of becoming a gateway to the EU.
Greece ranks 29th in the EU in terms of cargo volume
being transferred via rail. Volumes are modest compared
to other EU countries hence, there is much room for
Greater Attica Region
Within the greater Athens area, the Attica motorway has
substantially changed road transport in and around the
capital and is an important logistics route, as it connects
the airport with logistics centres, ports and rail stations.
A landmark infrastructure project was completed in 2013
– that of the new 17km railway line for cargo transit. This
new line connects the container terminal of Piraeus (Neo
Ikonio) from COSCO’s facilities with Thriassio Pedio. The
€143mil. investment significantly reduces transport times
for goods from the Mediterranean and Asia to Europe
and allows for the movement of 350,000-420,000 TEUs
p.a. The project will achieve significant synergies once the
freight centre in Thriassio Pedio is completed. The 588
acres of land belonging to GAIOSE with a buildable area of
235,000m2 will offer logistics and processing facilities and
merge with the 1,450 acres belonging to OSE, that will
include a rail service complex (terminals, customs office,
container management stations). The development has
attracted interest from a number of international investors
such as COSCO, Grivalia and Goldair. Thriassio Pedio
will become a freight centre of international repute that
will increase rail freight significantly and help the country
become a major gateway.
The city of Thessaloniki and its port are directly linked to
two Pan-European Corridors of intermodal transport IV
and X, that connect Greece with Germany, the Czech
Republic, Austria, Slovakia, Hungary, Romania, Bulgaria
and Turkey via corridor IV and with Austria, Slovenia,
Croatia, Serbia and FYROM via corridor X. Also via the
Egnatia Odos, Greece is connected indirectly to Corridor
IX with access to Helsinki, Kiev, and Bucharest.
Similar to Thriassio Pedio, the ex-military camp ‘Gonou’
has been allocated by the government for the development
of a logistics park in northern Greece. The site has access
to national motorways and the Egnatia Odos. As such,
connection to the Balkan countries, Europe and Turkey
is immediate. Moreover, the site is located next to the
railway’s sorting station and can be connected to the rest
of the railway network. Most importantly, the site is next to
the industrial zone of Sindos and only 5 km away from the
port of Thessaloniki.
6 Logistics Industry
The logistics market in Greece contributed 10.8% to GDP in 2013 and according to the
Ministry of Infrastructure, Transport and Networks, turnover of the sector stood at €1.2bil.
The Greek logistics sector showed significant growth during the 1998-2008 period
with turnover rates increasing yoy. Factors contributing to growth were the increase in
outsourcing of logistics services, the constant IT progress in transportation and storing of
goods, the growing economy until 2008, as well as the expanding strategies of several
companies of the sector.
Source: Bank of Greece, edited by NAI Hellas
The economic recession that began in 2008 brought fiscal measures that significantly
reduced consumption, production, exports and imports. This immediately resulted in
the reduction of the logistics sector as demand for goods transportation fell dramatically.
Yet the beginning of 2014 brought the first signs of recovery with a 5.5% yoy increase,
compared to the devastating 7.0% decline experienced from 2012 to 2013. According
to the World Bank, Greece’s 2014 logistics performance ranks 44th out of 160 countries
in terms of quality of services, cost efficiency and quality of transport infrastructure, with
the Logistics Performance Index (LPI) reading of 3.20 units. In 2012 Greece was ranked
69th with the LPI at 2.83 units1
The logistics sector in Greece includes a number of international 3PL (3rd Party Logistics)
companies specialised in managing goods (storage, preparation and distribution) and
many small-medium enterprises (SMEs) offering a smaller range of services. Logistics
companies in 2013 showed an annual increase in turnover of 1.8% and a 12.8% growth
in EBITDA. Total sector EBITDA in 2013 amounted to €68.8mil. Profits before interest
for the sector amounted to €2.53mil. and the average gross profit margin increased to
Source: IBHS (Infobank Hellastat), edited by NAI Hellas
1 The World Bank conducts logistics performance ranking surveys every two years.
In 2013, approximately seven out of ten companies
in the industry reported a profit (166 companies in the
246 sample), with 55.0% of those profitable businesses
showing profit increases from the previous year.
The five largest logistics companies represent 23.0% of
the industry’s total turnover in the sample. The market’s
leading company Kuehne & Nagel, had a market share of
7.0%, followed by Diakinisis and Orphee Beinoglou, each
with a market share of 5.0%.
Source: IBHS (Infobank Hellastat), edited by NAI Hellas
The top five most profitable companies represent 25.0%
of the sample’s earnings before interest. In 2013, COSCO
was the most profitable logistics company in Greece
accounting for 9.0% of earnings, followed by the Olympic
Fuel Company (OFC) with 6.0% and MED Frigo with 4.4%.
Source: IBHS (Infobank Hellastat), edited by NAI Hellas
The sector’s overall improvement in profitability in 2013
was a result of efforts to cut operational expenses by
a number of 3PL providers. In the process of reducing
operational expenses, companies renegotiated lower
rental levels for their property portfolios.
Outsourcing Logistics Services - 3PLs
According to the World Bank, efficient global logistics
providers operate in Greece but they are only partially
integrated with the rest of the Greek economy. Global
players present in the local market are Kuhne & Nagel,
DHL, Shenker, Geodis, Panalpina and Express. Together
with a few Greek companies, they operate efficient
supply networks and provide their clients with timely
and cost efficient deliveries between Greece and the
rest of Europe, from and to their logistics centres in the
Attica and Thessaloniki regions. The use of outsourced
logistics services in Greece is 23.0% comparatively low
to that of the European average of 49.0%, according to
the Hellenic Federation of Enterprises (SEV). This is partly
due to regulatory constraints that hinder the development
of modern commercial transport and logistics services.
Typically outsourced logistics account for 80.0%-90.0%
of all transport expenditure, yet in Greece this amounts to
Source: PanHellenic Logistics Survey 2014-2020
University of Aegean, processed by NAI Hellas
The logistics property market which closely followed the growth of the Greek economy,
increased considerably during the period 2005-2008, driving prime rents from €4.00/m2/
month in 2004 to as high as €6.00/m2/month in 2008 for high quality logistics space in
some areas. By 2009 the economic crisis had had a major effect on the logistics property
market with falling demand leading to prime rents decreasing by even €1.00/m2/month in
some cases. In 2013 rents reached a low and prime rents for Grade A logistics properties
stabilised at €4.00/m2/month.
Source: NAI Hellas
The market remained stable throughout 2014 however, with very few transactions taking
place. Rents for logistics properties remained unchanged while yields showed an increase
reaching 11.5%. During the past several years tenants have been re-negotiating rental levels
and have managed to achieve notable discounts. Having said that the Greek logistics property
market is mainly an owner-occupier market, a fact that limits the market’s liquidity. Since 2008
and throughout, a number of owner-occupiers have been leasing part of their premises that
remained unutilised in order to save on operating expenses.
Supply of newly constructed logistics buildings was very limited in 2014 as developers
looked to pre-let or pre-sell before commencing any new developments. In 2014, Lidl
Hellas began operating two new logistics centres. The first, opened in February 2014,
is an ultramodern 50,000m2 logistics centre in Kalivia, East Attica. The second, which
opened in June 2014, is located in Sindos, Thessaloniki and cost €35.0mil. to develop.
The Sindos logistics centre is a 60,000m2 property, built on a 200 acre land plot that
serves 60 of Lidl Hellas’s retail stores in Macedonia and Thrace. This is the company’s
largest logistics centre in Europe.
During 2014, Grivalia REIC acquired two logistics properties in Aspropyrgos; a 13,000m2
logistics property acquired for €5.9mil at an implied investment yield of 12.0% and a
19,000m2 property for €8.3mil. at an implied investment yield 11.5%. Moreover, the
hypermarket chain Jumbo acquired a 27,500m2 logistics building on the old National
Road ‘Athens-Chalkida’ for €11.3mil. from Vogiatzoglou Systems.
Lastly, Secure Development & Investment Plc, a South-eastern Europe focused property
Investment Company, made its first acquisition in Greece in 2014. The acquisition was a
17,756m2 income producing logistics complex in the west Attica industrial area bought
from G.E. Dimitriou Ltd. The property is fully leased to several tenants with Kuehne &
Nagel being its major occupier. The €1.85 mil. income producing logistics complex was
bought for €15.0mil. at an implied investment yield of 12.0%.
Locations, Stock & Vacancy Rates
The logistics zones of the greater Attica region are clustered in relatively few areas to the
north, west and east entrances of the city of Athens and Piraeus. Access infrastructure
is relatively poor and warehouse zones intermix with commercial and residential areas.
The Thessaloniki logistics
market is concentrated in the
industrial park of Sindos, the
Agios Athanasios area, as
well as locations that have
immediate access to the port
and international motorways
(E75, E79). Sindos logistics
park was developed more
recently and, as such, it is
located within a designated
industrial zone and has the
necessary designed layout
with multimodal access.
The western entrance to Athens
has the highest concentration of
logistics property stock followed
by the entrance to the north.
Together these areas comprise
over 2mil. sqm of logistics space.
Western and northern Attica
have developed over the years
into traditional logistics markets
and offer a number of Grade A
facilities. The Piraeus logistics
market accounts for only 5% of
the total logistics property stock
and offers very little Grade A and
B quality space. The eastern
side of Attica has been evolving
into a logistics area after the
construction of the Athens
International Airport in 2001.
Source: NAI Hellas, on-site inspections
Kifissia Agios Stefanos
Perama Agios I. Rentis
Attica Logistics Property Market
1. Athens North
2. Attica East (Mesogeia)
Agios I. Rentis
4. Attica West
5. Attica North (Viotia)
2. Agios Athanasios
As for the overall market’s stock, according to research conducted by the University of
Aegean (under the Ministry of Infrastructure, Transport and Networks) 62.0% of the 3PL
companies have properties that do not exceed 10,000m2, the minimum benchmark size
for an adequate logistics property. This is largely a result of the restrictions and difficulties
faced in gaining planning and licensing permission for large-scale developments.
Properties in the market that are sized greater than 45,000m2 are approximately 14.0%.
Source: PanHellenic Logistics Survey 2014-2020 University of Aegean, processed by NAI Hellas
Rents & Yields
In prime locations of the greater Attica region (i.e. Aspropyrgos, Inofita, Mesogia and
bordering the National Road) rents for Grade A logistics properties reach €4.50 -
€5.00/m2/month. Contrastingly, there are relatively small sized warehouses with low
specifications that are on the market for €1.00/m2/month. In the Thessaloniki region, the
logistics park of Sindos claims the highest rents of €2.50/m2/month.
Logistics Property Market in Greece
Rents (€/m2/month) Yields (%)
Grade A Grade B
Athens North 3.00 - 4.50 1.00 - 2.50
11.5% - 13.0%
Attica East (Mesogeia) 2.00 - 3.50 1.50 - 2.50
Piraeus n/a 1.00 - 2.00
Attica West 3.00 - 4.50 1.00 - 2.50
Attica North (Viotia) 2.00 - 3.50 1.00 - 2.00
Sindos 2.50 - 3.00 2.00 - 2.50
11.5% - 13.0%
Agios Athanasios 2.50 - 3.00 1.50 - 2.50
Kalochori 2.00 - 2.50 1.50 - 2.00
Oreokastro 2.00 - 2.50 1.50 - 2.00
All data contained in this report has been compiled by NAI Hellas/AVENT S.A. and is published for general
information purposes only. While every effort has been made to ensure the accuracy of the data and other
material contained in this report, NAI Hellas/AVENT S.A. does not accept any liability (whether in contract,
tort or otherwise) to any person for any loss or damage suffered as a result of any errors or omissions. The
information, opinions and forecasts set out in the report should not be relied upon to replace professional advice
on specific matters, and no responsibility for loss occasioned to any person acting, or refraining from acting, as
a result of any material in this publication can be accepted by NAI Hellas/AVENT S.A.
© NAI Hellas/AVENT S.A.
The logistics sector in Greece has very high growth
potential with the capacity to offer new jobs and enhance
Greece’s ranking and competitiveness. Efficient logistics
could play an important role in the country’s recovery in
a number of ways including reducing costs of importing
and exporting, contributing to GDP growth as a service
sector and reducing the fragmentation of the domestic
economy, thus improving economies of scale and
To assist Greece in its attempt to become the most
important logistics hub in South-eastern Europe, the
Parliament passed a new law concerning the logistics
sector L. 4302/2014. The law includes fast track
procedures for the development of business parks on
land plots of 500 acres or more and offers incentives
to those willing to invest in the sector by harmonising
licensing procedures for logistics properties and
offering building coefficients equal to those of industrial
properties. It is interesting to note that the new law for
the first time establishes the terms ‘logistics’ and defines
the sector’s business activities (3PL-third party logistics).
The law’s intention is to reinforce competition, enhance
investment and reduce the level of risk associated with
investing in the sector.
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