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Real estate investors are indifferent for Athens

09 November 17 - Irene Theofanidou
Real estate investors are indifferent for Athens

COMPANIES

Solum Property Solutions

Consultant - GREECE

ΕΡΡΙΚΟΣ ΑΡΩΝΕΣ

Investment - GREECE

Zeus

Fund - GREECE

Eurobank Property Services

Consultant - GREECE

ETAD.A.E.

Public entity - GREECE

PEOPLE

Dimitris Andritsos

CEO of Eurobank Property Services S.A Eurobank Property Services
According to “Emerging trends in Real Estate Europe 2018” report published by PwC and ULI, Athens is quietly picking up and perhaps belies its spot, just two places off the bottom of the overall rankings.

 

It is true, it is not hard to find large, pan-European investors who buy in southern Europe but “just don’t go to Greece - we don’t have a local team there”, as one puts it. However, a number of international investors committed capital in 2017 and put boots on the ground.

The sector attracting most interest is hospitality, which is not so linked to the local economy. International arrivals have gone up in each of the last three years, and the country is viewed as a safe European holiday destination.

“Everyone who comes to Greece is interested in hospitality, so you have to join the queue,” says a wry local adviser. Prominent Athens hotels have traded at less than replacement cost this year, and the buyers can bring in management skills honed in other markets.

In the vanguard are US investors and private equity firms, often operating with local partners. Chinese capital is going into logistics at Piraeus Port, and shopping centres are beginning to attract opportunity funds.

Like hotels, retail including food and beverage gets a boost from tourism which accounts for 18.6 percent of the country’s GDP.

Prime office yields have started to move in slowly off the bottom, and Athens is one of the few cities left in Europe where there are opportunities for yield compression.

Emerging Trends Europe’s survey participants may have had this in mind when they scored its capital value prospects above 12 other cities.

Non-performing loans remain a huge headache for Greece with €101 billion clogging the books of its banks: an estimated 60-70 percent is either commercial real estate loans or collateralised by real estate.

The Greek banking system has set an ambitious target of reducing it by €40 billion by the end of 2018, which will test investors’ appetite.

And the country is still under EU supervision. However, in a change from even one year ago, people think the possibility of a Grexit has passed, and sentiment has turned. As one experienced pan-European player now operating there says: “Investing in Greece doesn’t feel so crazy.”

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