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Lamda development raises offer for Europe’s largest urban plot [Update]

Paul Tugwell & Nikos Chrysoloras

A venture led by Lamda Development increased its initial offer by 25 percent for 100 percent of Hellenikon SA, topping an independent valuation, the Greek state-asset sales fund said.

Lamda, backed by China’s Fosun Group and Abu Dhabi-based property firm Al Maabar, submitted an offer of 915 million euros ($1.26 billion) for Elliniko, with plans to develop the former Athens Airport site, the Hellenic Republic Asset Development Fund (TAIPED) said in an e-mailed statement Wednesday. The 6.2 million square-meter site is more than three times the size of Monaco.

“A huge piece of urban land, which was abandoned for more than 10 years, will now become a source for growth for Athens,” Ioannis Emiris, the fund’s chief executive officer, said in a phone interview after the official announcement. “The benefit for Greece is not just the money from the sale of the old airport site, but the huge park of at least 200 hectares and the thousands of jobs that will be created,” he said.

In 2013, Greece saw its sixth year of a recession that has destroyed about a quarter of its economic output and sent the unemployment rate soaring to more than 27 percent. Revenue from a state asset sales program is also earmarked to cover part of the country’s funding needs in the coming years under the 240 billion-euro bailout from the euro area and the International Monetary Fund.

Lamda will pay 33 percent of the offered amount upon completion of the agreement, and the rest will be deferred over 10 years, according to the sales fund.

“The total investment, including construction, comes to 8 billion euros, which rises to 11 billion euros if we also add retail outlets and hotels that will be built on the site,” Odysseus Athanassiou, chief executive of Lamda Development said by phone. “About 2.5 billion euros will be invested in the first five years of the project, and we are going to create 50,000 jobs, while the deadline for the state to deliver all the relevant permits is two years,” he said.

“Only 250 hectares out of the 600 hectares of the site will be developed for commercial use, the rest will be covered by a metropolitan park, schools, roads and utilities, and, in this sense, we are actually paying 850 euros per square meter, which is twice the price of land in the wider area,” Athanassiou said.

Part of the proceeds from Elliniko should be directed toward creating green spaces in other parts of the Athens, the city’s mayor, George Kaminis, said in an interview Wednesday.

“We have perhaps the biggest free space in the whole of Europe right now to be taken care of and to create jobs,” he said. “What’s going to be built there must correspond to a balance of green spaces in Athens.”

TAIPED will deliver a fairness opinion on the improved financial bid and will decide within the coming days if a preferred bidder can be declared, according to Wednesday's statement. [Bloomberg]

ekathimerini.com , Thursday March 27, 2014 (10:10)  
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