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18 October 2017
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Incomprehensible…

01 June 09 | Andreas Marabos
Andreas Marabos

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DATE BUYER SELLER
17 October 17 Credit Suisse Asset Management Legal & General capital
30 August 17 GLP J-REIT Global Logicis Properties

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Foreign investments have been hugely deterred by the State Council's decision not to allow the development of the Babis Vovos International Constructions shopping center in the Votanikos area, as part of the Double Regeneration project.

Foreign investments have been hugely deterred by the State Council's decision not to allow the development of the Babis Vovos International Constructions shopping center in the Votanikos area, as part of the Double Regeneration project.

Greece always did and always will need foreign investments for its financial growth. This need is even more evident in this period when economies are dominated by the effects of the financial crisis and limited banking funding.

Besides providing cash flow and strengthening the Greek economy, investments by major foreign developers bring knowhow to the market and practically take Greece out of its damaging introversion.

The global experience of companies such as Colliers International, has shown that the complexity of legal and ownership obstacles in Greece that need to be overcome in order for an investor to be able to market its final product in Greece is much greater that other European countries, or the broader activity area of such companies, a fact which largely deters foreign investors from entering the Greek market.

When the Vonanikos project, which meets all legal requirements, is banned by a State Council decision, which hasn't even been officially published yet, many questions are raised amongst foreign investment circles, which are not easy to answer. This uncertainty and its resultant unwillingness to invest in such a market will not be easy to overcome. Consequently, the real estate market has been put on hold, after the chain reactions caused were added to the already dominant negative conditions.

It is incomprehensible that a whole mechanism working for such projects is being taken hostage by a small group of disagreeing parties. We have to ask:

• Why will a foreign investor seek to operate in our country, after witnessing the chaos dominating the market?

• How can the thousands of jobs created by such a project be simply ignored? One should note that The Mall Athens alone has created over 3,000 new jobs, not including the jobs created during the development (Engineers, advisors, technicians, construction workers etc).

• How can the massive contribution of this project in green spaces in the center of Athens, as part of the double regeneration project, be ignored and why would anyone prefer the area to remain in its current state?

• How can a listed company's share be left in the mercy of profiteers, and how can an official State Council decision not be released yet?

• How can a law of the state, voted for by the Greek parliament majority, involving a €150,000,000 investment, be disregarded in one decision?

Completion of the shopping center in Votanikos is vital to the local real estate market, since it will constitute the basis for any future development. Its non completion provides an alibi and a res judicata for similar developments in Greece. Is this how we want things to be done?

As advisors to the BVIC for the Votanikos project, we at Colliers International Hellas firmly believe that with the support of the parties involved, such as Panathinaikos FC, the City of Athens and the Ministry of Public Works, the project will successfully proceed and lead the way for more such developments and investments.

The effects of this decision are quite evident to the portfolio managed by Colliers International and in the talks with local and international developers, since each future step taken in the Votanikos issue, will significantly affect developers, as well as the thousands of workers in the real estate sector.

Let us stop thinking inwardly for a second, and mange to see the solution which will benefit the many and not cater to the false problem of the few.

 

 

 

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