Foreign groups have carried out investments worth tens of millions of euros in 2019 for the acquisition and development of properties in Greece. These are groups that came, saw and decided to invest in the local realty market, acknowledging the significant prospects of future capital gains.
This influx of funds is proving valuable in helping the local market recover from the considerable investment shortfall of the last decade in property development, as – with the exception of a handful of companies – Greece has been left with few important players who are in a position to design and finance major investments.
These investments also have high added value as they produce jobs, while another interesting element is that each company tends to focus on a different niche of property market development.
Israeli property investment group Zoia Fund, for instance, continued its selective acquisition of older buildings in downtown Athens in 2019, taking its total to 35 buildings. What it does is rebuild and refurbish the properties it acquires so that it can reposition them in the market either as accommodation spaces (e.g. hotels) or as apartments.
According to Zoia managing partner Sagi Rubin, the firm’s intention is “to return the buildings we acquire back to the Athenians, to Greek buyers or tenants in general.”
“We develop and offer affordable housing proposals in terms of costs to the market. We are particularly confident about the districts close to the Athens city center, such as Exarchia, Pedion tou Areos and Kallithea, where we are reconstructing buildings aiming to offer small apartments to people aged 20-40 years old seeking a house,” he says.
Rubin adds that Athens is on track to evolving in the coming years into a city like Madrid or Berlin, with multi-million-euro investments.
Zoia Fund has also bought property on downtown Aeolou Street (where the building will be transformed into a hotel with furnished apartments), in the districts of Kallithea, Kolonaki, Koukaki, Gazi, Neapoli and Exarchia, as well as in Kastella in central Piraeus.
Another three of the company’s buildings are already being utilized as commercial spaces: The first is a 3,000-square-meter property near the National Archaeological Museum that stands out for its architecture; another is a very well-positioned property on Filellinon Street, near Syntagma Square; while the third is a former industrial building in Gazi that has been transformed into offices being leased by the firm Spaces.
American group Hines, meanwhile, is focusing on shopping centers and hospitality. It made two important investment moves in 2019: Completing the buyout of the Athens Heart mall, which it intends to transform into a discount retail outlet that will be ready in 2021 and named “Gazi Outlet,” and acquiring the former Odeon Starcity cinema building on Syngrou Avenue, which sources say will be transformed into a hotel.
Besides the above investments, the development of the other commercial project by Hines, Academy Gardens, is proceeding on Kifissou Avenue, near Plato’s Academy. Company director Andreas Kapsalis says that in the coming days work will begin for the construction of the first 12,000 sq.m., to be completed this spring.
Another significant move came from Swedish property group Sterner Stenhus Greece AB, led by Greek-Swedish entrepreneur Ilias Georgiadis, which acquired 90 percent of the Athens-listed company Pasal Development.
The procedure provides for the payment of 10 million euros through a share capital increase and once this is formally completed (expected in the coming weeks), another 13 million euros will be brought in, probably through bank loans. These funds will be used for the payoff of Pasal’s debts and the financing of the company’s future moves.
According to Georgiadis, “as a group we have considerable experience from the stock market and, therefore, have been interested in this prospect since the start of our presence in the Greek property market. We believe that the case of Pasal Development is particularly interesting and we are therefore proceeding to this agreement.”
The initial aim is to maximize the value of the existing portfolio of Pasal Development’s assets, targeting the further penetration in the logistics sector where Pasal owns the main logistics center of the Sklavenitis supermarket chain in Elefsina in western Attica.
Besides the acquisition of Pasal Development, Sterner Stenhus has made some other significant moves in the local realty market over the previous months: It has bought out the historic Hellas hotel on Omonia Square as well as two logistics facilities in Aspropyrgos, also in western Attica, a 14,000-sq.m. building used by Friesland and a 7,500-sq.m. property operated by Goldair.
Finally, there is also the notable presence of Dutch property development group Ten Brinke via its Greek subsidiary Ten Brink Hellas, which is realizing an investment plan believed to exceed 70 million euros.
Its biggest project concerns the construction of a new shopping center, with a surface area of 25,000 sq.m. on a 50,000 sq.m. plot on Crete. Sources say that the necessary construction permits are expected to be issued within 2020, with the investment estimated to come to around 40-50 million euros.
Likewise in Attica one of the moves by Ten Brinke that stood out in 2019 concerned the acquisition of a 15,000 sq.m. plot of land which Israeli-owned Plaza Centers had bought some two decades ago.