Bank realty sales add to Greek property supply

Bank realty sales add to Greek property supply

The desire of Greek banks to rid themselves of the burden that thousands of repossessed real estate properties put on their expenses is reshaping the country's property sector, local market professionals told Xinhua in recent interviews.

They explain that residential, tourism and other commercial properties form part of the banks' overcrowded realty portfolios that the lenders are increasingly putting up for sale.

This is either one by one or through packages conceded to specialized asset management companies, or even via the selling of portfolios of nonperforming loans, many of which are secured on properties.

Greece's Alpha Bank ranked seventh among the European Union's top sellers of nonperforming Loans (NPLs) in the European Union last year, according to data published last month by the Ashurst law firm in London.

Alpha parted with assets worth 6.8 billion euros during 2018, the data showed, while all other main banks in Greece (National Bank of Greece, Piraeus Bank and Eurobank) followed the same process in the effort to reduce their NPL stock.

"If 2018 marked the beginning of that process, we expect 2019 and 2020 to see a significant increase in sales of portfolios of various shapes and sizes, as the market has matured and the banks are eager to promote the use of this tool further," Resolute Asset Management Senior Advisor Christoforos Stratos told Xinhua in a recent interview.

This coincides with the recovery of prices in the Greek property market, with the latest Bank of Greece data showing that in 2018 residential rates grew 1.5 percent on an annual basis after an entire decade of constant decline, while office spaces enjoyed a 7.4 percent rise compared to 2017.

In this context, banks are eager to offer back to the market properties that will boost their revenues as well as sparing them from maintenance costs. They therefore add to the market's supply conceding to asset service companies' portfolios that include prime properties such as hotels.

"Hotel units are sold within a month at the most. Houses may take between one and three months, depending on the issues each property may have regarding necessary work for it etc., while plots of land may take up to two or three years to be sold, with the most popular ones being those that are easier to develop," George Mountis, Managing Partner at asset management firm Delfi Partners, told Xinhua.

He stressed the great mobility in the market that the increased supply and demand have brought, breathing some fresh air into Greek realty as the country is emerging from its decade-long financial crisis.

All this also means that there are numerous foreign asset managers who have converged in the local market that it is close to saturation. "This is an issue, as there are so many licensed servicers and the market is certain to be saturated. We expect just a few of them to remain in the market, below five, while others may become subservicers for the servicers," said Mountis.

Stratos cited the recent agreement for the acquisition of Eurobank Property Services by Italian group Cerved and agreed that out of the approximately 20 licensed companies only four to six major players will remain in the market.

That could become a reality "probably through mergers, although it is still early to speak of them. The others might survive based on their specialization, if they find their niche", he argued.


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