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ATHENS-The Greek economy is growing at almost twice the European average, according to new research from FPD Savills, and this is driving an unprecedented property boom. A record 1.3 million sf of offices are expected to have been let by the end of 2001.

Both the public and private sectors are finding it hard to find new office space, and the Greek government has a requirement to purchase up to 1.73 million sf of offices in order to relocate six ministries out of the city centre. The liberalisation of the telecommunications and energy sectors is also creating the need for additional office space.

Average office rents in Athens grew by 22% over the last year, the highest growth for the last five years. However, Eri Mitsostergiou, European research analyst at FPDSavills believes that this level is not sustainable, and she forecasts that the growth rate will fall in 2002 to around 10%, as some occupiers are becoming reluctant to pay the high asking rents.

‘At this stage it is difficult to predict what impact the events of September 11 will have on the office market in Athens,’ she said. ‘However, we believe that the strength of the Greek economy, which has little exposure to the US and has seen interest rates fall due to entry into the Eurozone, should ensure Athens’ ability to withstand any market negativity.’

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