Greece’s Rental Market Reaches New Level of Desperation
In November, U.S. home building climbed to the highest level in 19 months as multi-family construction increased by 25 percent. The boom in the rental market sent shares of home-builders (NYSEARCA:XHB) such as KB Home (NYSE:KBH), PulteGroup, Inc. (NYSE:PHM) and D.R. Horton, Inc. (NYSE:DHI) screaming higher over the past few months. However, the rental market in Greece is reaching a new level of desperation.
Cash-strapped Greece, which is currently trying to work out a deal with debt holders, approved a plan to lower rental prices at the Acropolis. In an effort to increase cash-flows, the ancient and world-known monument is now available to film crews and photographers at a heavily reduced price. The one-day cost to film at the Acropolis was cut by more than half, from more than $5,000 per day to about $2,050. The rate for photographers was reduced from $385 per day to $256. The ministry hopes to use the anticipated revenue for site upkeep.
While rental prices across the board decline in Greece, multinational companies such as Nike, Inc. (NYSE:NKE) are looking to cash in. Nike, named after the Greek goddess of victory, agreed to rent prime retail space in the center of Athens. The monthly rent of the 8,300 square feet space will be at least 43 percent less than the previous tenant. According to CBRE Atria, Nike is paying 57,000 euros a month for the first year to lease the space at 1 Ermou Street and Syntagma Square.
“International retailers are taking advantage of lower rents and higher vacancy rates in Greece to establish networks that they couldn’t have created previously,” said Yannis Perrotis, managing director of CBRE Atria in Athens. Perrotis goes on to say, “This is a sign of things to come as the state becomes more in tune with the reduced level of consumption and older tenants can no longer afford to pay rents.”
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Nike is the world-wide leader in sneakers and sports apparel. The company owns more than 700 stores around the globe, and competes with athletic retailer Under Armour, Inc. (NYSE:UA). Nike also has product placement deals with companies such as Footlocker Inc. (NYSE:FL) and Dick’s Sporting Goods Inc. (NYSE:DKS). On Thursday, the company unveiled NikeFuel, a wristband that seeks to change the way people view physical movement by measuring daily activity levels.