With Britain likely to be the hardest hit of the major economies by Covid-19 according to the Organization for Economic Cooperation and Development (OECD), the outlook for UK growth is looking bleak. The British economy is forecast to nosedive by 11.5% in 2020 – more than Germany, France, Spain and Italy.
And while every country may have been hit hard by the crisis, Greece in particular has been hailed in the UK for how it has dealt with the pandemic, with one of Europe’s lowest rates of deaths and confirmed cases.
The economic outlook is looking more favorable, too. Earlier this month, the European Commission amended its forecast for the Greek economy. Although the Commission still expects Greek GDP to fall by 9% this year, it believes the economic prospects for 2020 in the aftermath of Covid-19 are milder than first predicted, with 2021 expected to see a positive rebound with growth of around 6%.
In the same way that here in the UK we saw Greece act decisively to contain the virus, we’re now witnessing the Greek government demonstrate strong intent to kick-start the economic recovery. As Prime Minister Kyriakos Mitsotakis recently said, “We will win the economy war just as we won the health battle.”
It’s this kind of bullishness that makes Greece an attractive investment prospect for countries looking at strong foreign markets to help them recover from the pandemic. Even before Covid-19 hit, Mitsotakis’ pro-business reform rhetoric – such as his commitment to lift capital controls to help attract overseas investment – was already being received positively. Now, with €72 billion allocated to Greece this week by the European Union to aid its post-pandemic recovery, coupled with Mitsotakis’ restated commitment to a reforming, business-friendly agenda, the stage is set for fresh interest from foreign investors.
Three areas in particular offer great opportunities. Firstly, the tourism and leisure sector is a particular bright spot for investment. One of the biggest fears was that the Greek tourism industry would collapse as a result of the pandemic, yet in the UK, travel companies say bookings to Greece have now “exploded.” Greece’s recovery from the debt crisis was propelled by a surge in investment in high-end hotels and leisure resorts – and it seems that confidence in the long-term prospects of the tourism sector has returned, evidenced by the likes of the €400 million Kilada project, located in the valley of Argolida, in the eastern Peloponnese, which began construction last month.
Secondly, closely related to tourism, real estate remains a growth area. British demand for holiday homes and property in Greece has rocketed by more than 200%, according to Rightmove, the UK’s biggest online property marketplace – it’s now the hottest search destination in Europe, which will be music to the ears of international property investors.
Thirdly, government and public sector projects offer further opportunities and Mitsotakis’ commitment to private-public partnership (PPP) schemes to help boost the country’s public infrastructure has been welcomed. As Kathimerini reported this week, industrial conglomerate Mytilineos is preparing to return to its Greek roots to invest in the infrastructure field through a number of PPP projects. Such a stance will encourage companies from other countries – especially those in the UK where PPP schemes have long been a fixture – to view Greece as an appealing new market for such programs.
The work that McBains is undertaking in Greece in both these areas serves to highlight the investment potential. On the leisure side, for example, we have recently been appointed to advise on the Alimos Marina Concession Project near Athens, which will convert the marina into one of the largest of its kind in the Eastern Mediterranean, attracting new income streams from tourism, and we are also currently finalizing arrangements to oversee Greece’s first healthcare PPP project, the €58 million Biomedical Research Facility of the Athens Academy. In fact, we’ve just moved to bigger premises in Athens, reflecting our vote of confidence in the Greek market. And we’re not the only ones confident in Greece: Famous UK names like Marks & Spencer, Unilever and British Airways are just some of the UK’s leading companies that remain long-term fixtures in the country.
As Georgios Filiopoulos, CEO of Enterprise Greece, has said, despite Covid-19 there is still strong international investor interest in privatizations and many of the infrastructure projects planned for the months ahead, with sectors including property, energy, tourism and logistics remaining attractive. What’s more, following the years of economic crisis, asset prices in Greece remain undervalued. As the UK readies itself for a post-Covid slump, looking across the Mediterranean for opportunities in Greece may be just the tonic it needs.
Anthony Coumidis is managing director of McBains Cooper Hellas Technical Consulting SA, a wholly owned subsidiary of McBains, a property and construction agency with operations in the UK and Europe.