Athens attracting hotel groups

Athens attracting hotel groups

Dozens of new hotels are expected to open in the center of Athens in the next few years, as the anticipated growth of tourism in the capital has generated fresh investments, either being spent on renovating and reopening existing units or giving decrepit office buildings a total makeover, while demand for empty buildings to be used for tourism purposes is soaring.

The big winners as a result of this trend have been social security funds such as the Single Social Security Entity (EFKA), the Army Pension Fund (MTS) and other smaller ones that possess a considerable number of properties in the city center and until recently were unable to utilize them due to lack of demand.

The most recent move concerned a hotel at 21 Kaningos Street that belonged to the auxiliary fund of insurance workers. This 3,500-square meter property has a four-star hotel license, but has remained empty since 2010 when the company leasing it was unable to pay the rent.

Another four-star hotel in the broader area of Omonia Square is set to be revamped by Dimand Real estate in a consortium with the European Bank for Reconstruction and Development. Dimand won the tender for the Sarogleio Mansion at 65 Stadiou Street that majority owner MTS held a few months ago. The property development company signed a 25-year lease agreement in June, with a renewal option for another 25 years, and is about to renovate the 10,000 sq.m. building for the purpose of running it as a hotel. Sources say the cost of the investment will come to 18 million euros and should be completed in a year and a half.

Many hotel groups and property companies are expected to take part in the upcoming tenders for three hotels in central Athens that EFKA is going to hold. They concern the Esperia Palace on Stadiou Street, another building on the corner of Stadiou and Edouardou Lo Street, and the Ambassadeur on Socratous Street. According to the pension funds’ plans, the tender concerns the long-term lease of the properties, up to 99 years instead of their sale, with more assets set to follow.

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