Funds eye holdings in domestic REICs

Funds eye holdings in domestic REICs

The managing officers of real estate investment companies as well as foreign funds exploring the Greek market in search of opportunities have their eyes fixed on the real estate assets in the portfolios of secured nonperforming loans that were sold last year.

Kathimerini understands that preliminary talks for the gradual sale of properties from those portfolios have already started, as the special administrators have made progress in settling a number of pending issues in order to make the transfer feasible.

It is reminded that two portfolios of loans secured on real estate collateral were sold over the course of 2018, for about 770 million euros. These were the “Amoeba” package by Piraeus Bank, and Alpha Bank’s “Jupiter” package. The cost of the former came to 432 million euros for buyer Bain Capital, while the latter fetched 337 million from Apollon Global Management.

The real estate assets of the above property packages comprise more than 140 hotel units, worth a total of more than 282 million euros, which are expected to come into high demand, regardless of whether they are sold off individually or as portfolios.

However, according to property market professionals, there is even greater interest in the way that the properties from the bad-loan packages will be sold.

According to well-informed sources, both Bain Capital and Apollo Global Management are likely to invest directly in a real estate investment company (REIC), in which they plan to bring property assets they have acquired in exchange for a certain number of shares in that company.

Sector professionals explain that such investors would have a significant reason for securing a stake in a real estate investment company, where they could transfer income properties – that is properties which can generate income, such as stores, office spaces or apartments that can be rented out – obtained through the bad loans bought. This would secure immediate gains just by the valuation of properties on their market value, as companies in the real estate investment sector do.

In that context, Piraeus Bank’s intention to concede the 39.4 percent stake it continues to control in Trastor REIC is seen as a springboard for developments in the immediate future. Certain negotiations to that effect have already taken place since the end of the last year, though without any positive conclusions having been reached so far.

Another real estate investment company that is likely to be open to such discussions is Trade Estates, an REIC founded by the Athens-listed Fourlis group whose establishment will have been completed by this fall. The new company has already been endowed with a particularly significant portfolio of properties, all of them of the Fourlis group, with a total value of 176 million euros.

Nevertheless, the Greek company’s management intends to enrich its asset portfolio further. It is therefore planning to reach out to companies active in the property management sector, and likely with funds too, in order to find co-investors.

The company aspires to evolve into the biggest real estate investment firm in the country in terms of commercial property concentration.

A good illustration of the significant demand being seen from institutional investors, such as real estate investment companies, as well as foreign funds, is the fact that some 300 million euros have been placed in the acquisition of income properties, such as office blocks and commercial stores, in the first quarter of this year alone.

This amount constitutes a historic high for the sector in a period of just three months, taking into account that as a rule such sums used to be invested in the Greek market over the course of an entire year and certainly not in just a single quarter.

The biggest transaction in terms of value concerned the acquisition of four hypermarket properties of the Sklavenitis supermarket chain by Grivalia Properties REIC. The Athens-listed company carried out the investment, which was worth around 119 million euros and is set to be officially completed over the next few weeks, before becoming a part of the Eurobank group.

Trastor Properties REIC was also particularly active in the first quarter of this year, as it invested a sum of 46 million euros, against a total of 38 million euros over the entire course of 2018. This amount went to the buyout of a series of office buildings, and of a store on Voukourestiou Street in the upscale downtown Athens district of Kolonaki.

Trastor’s biggest transaction this year concerns the portfolio acquired by Argentinian group Grupo Dolphin SA in Greece a few year ago. The portfolio in question, whose final price came to 27.8 million euros, contains four commercial properties in the Attica area.

Besides this transaction, Trastor has also obtained an office complex that had previously belonged to Prometheus Gas of the Copelouzos group and is located at Paradeisos in Maroussi, north of the capital. The cost of that transaction came to an estimated 12 million euros.

Likewise, Brook Lane Capital is in the process of completing investments that are expected to reach up to about 110 million euros. The biggest move in this direction has concerned winning a tender by Alpha Bank for the portfolio of five office buildings, mainly consisting of properties that used to belong to the now-defunct Babis Vovos construction company. Brook Lane Capital has paid Alpha the sum of 95 million euros for this portfolio.

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