Foreign funds eye returns from Greek hotel units

The property market in Greece is attracting the interest of a growing number of foreign institutional investors, mostly from the US and Britain, who are eyeing investment opportunities in the tourism sector.

George Kaburopulos, president of the Urban Land Institute Greece & Cyprus, says that there has recently been considerable demand for hotel units, holdings in property sector companies and tourism concerns on the part of venture capital funds.

“The interest we have seen recently is exceptionally high. We have seen that Greece has returned to investors’ radar screens. For now the greatest interest is reserved for hotel properties, as besides potential buyers we have also been approached by leading chains in the sector that are interested in taking over the operation of new units,” Kaburopulos said.

He added that investors are seeking out annual yields of 15 percent, although that appears rather difficult given the relatively high sale prices with respect to the revenues expected, which suppresses returns. This is why some funds are opting for alternative ways of entering the market, such as buying units at auction from hotel companies in financial trouble.