Amid ongoing investigations into alleged embezzlement cases at the Social Security Foundation (IKA), the country?s biggest social security fund is looking anew at ways to maximize its real estate portfolio in an effort to boost its shrinking coffers, as the hemorrhage of funds is putting IKA?s ability to provide basic services at risk.
Starting a few weeks ago, IKA?s governing board approved a new strategy for the maximization of the organization?s real estate holdings, increasing its capital adequacy through the sale of property that is not suitable for use by the fund itself, as well as new steps to rationalize the housing needs of the organization.
The greater aim of the new strategy is to reduce the operation costs of IKA by moving services currently housed in rented properties to those owned by the organization. In this context, the renovation of an IKA-owned multi-storey building on Koumoundourou Square in central Athens will be speeded up so that the organization can house its headquarters there.
IKA further plans to use modern financial tools, such as sale and leaseback, to boost the fund?s revenues, as well as streamlining its energy needs by making its buildings more reliant on renewable energy sources and eco-friendly.
As far as the maximization of IKA?s real estate assets are concerned, two listed buildings in central Athens are currently in line for development. One, located at 64 Pireos Street, is listed as a modern monument and has a total area of 15,700 square meters, which is more than adequate for housing IKA?s headquarters. Plans to build a public library on the ground floor of the property are also being explored.
The second property in question is a building complex at 46 Panepistimiou Street, which has great commercial potential and historical significance. IKA?s plan for this building is for turning it into a shopping center.
Meanwhile, according to a recent report by the Ministry of Labor and Social Security, the total objective value of unused property belonging to social security funds, as calculated for tax purposes, comes to 255.5 million euros, or 20 percent of the objective value of their total real estate assets. Furthermore, Greece?s social security funds rent a total of 687 properties in order to house various services, running up a monthly bill of 2.9 million euros.