Greek hotel properties back on foreign investors’ radar

By Nikos Roussanoglou

Hotels constitute the No 1 pick for foreign investors who are active in the local property market. It is a trend unlikely to change in the near future, at least until prices stop heading south.

This is the conclusion of property market professionals who spoke to Kathimerini on the occasion of the recent pan-European survey conducted by PricewaterhouseCoopers and the Urban Land Institute (ULI). The survey showed Athens rising 14 spots – from 27th in the previous survey to 13th – among the continent’s destinations for property investment, reflecting the growth in investor interest over just 12 months.

Just a year ago the real estate market in Athens was a no-go area for investors. Today this picture has improved dramatically as many people believe that the Greek capital offers significant investment opportunities. As the head of the Greek branch of the ULI, Giorgos Kambouropoulos, says, “the success of Ireland, and now Spain too, in recovering has led a number of investors to the view that something similar will happen in the other Southern European countries hurt by the crisis, mostly Italy and Greece.”

He adds that foreign investors prefer hotels, with tourism being the main attraction. However, most of the investment funds currently looking at Greece are doing so largely for opportunistic reasons: They buy only when the price is particularly low, usually 40 percent below the already low value of each property. Their aim is to reduce the investment risk they take by positioning themselves in the Greek market. This is why they seek out distressed sales, which offer high yields due to the low price paid.

Aristotelis Karytinos, chief executive at property management firm Pangaia, says foreigners prefer to buy hotel units from banks, but there are no such packages on the market nowadays, so they are turning their attention to isolated hotel unit sales by owners, though their small size and high asking prices do not match what they are looking for. Their top choices are Myconos, Santorini, Crete and Rhodes.