Banks eye real estate

Six years after domestic banks first got involved with real estate, by setting up subsidiaries, their performance remains marginal, given the liquidity and the significant property portfolios that credit institutions possess. During their first phase of activity, real estate subsidiaries of banks focused their activities mainly on managing the property portfolio of their parent bank and satisfying its needs in buildings. Later, though, several of them moved to investment in and development of commercial real estate, while the Balkans seem to be the next target for those companies, particularly in the countries where the parent banks have a strong presence. In terms of investment activities through founding investment companies, development was not as the banks would have expected. Gaps in the legal framework, combined with the one-off taxing of the difference between the accounting and the commercial value of a piece of real estate by 35 percent, have put off many banks from founding real estate investment companies. A typical example was the failure in negotiations between Hellenic Technodomiki and Alpha Real Estate (Astika Akinita). Among real estate bank subsidiaries, the Piraeus Bank group appears to be the most active, with the total of its invested capital rising to 600 million euros. Piraeus Real Estate is essentially active across the spectrum of the domestic property market, particularly in construction, development and utilization of real estate property, in providing consultancy and evaluation services, in real estate portfolio management, and in property and facility management. The company will soon found a real estate investment company, having received the approval of the Capital Market Commission, and will be listed on the Athens stock market. EFG Eurobank Properties, which recently changed form, has a strong local market presence. The branch of providing agency, consultancy and evaluation services – on average, the firm conducts up to 35,000 real estate evaluations yearly for the bank and its private customers – was absorbed by the bank. Eurobank Properties turned into an investment fund with a portfolio worth 200 million euros and the Balkans in sight. Alpha Bank’s subsidiary, Alpha Real Estate, is active in the sector of services such as the management and utilization of properties owned by the bank or other parties, the supply of technical consultants and complete services of third-party-owned properties’ management. It also provides agency services for finding and selling properties. Another significant presence is that of Emporiki Real Estate, active in the sectors of property development and consultancy services. Its management portfolio contains some 1,400 properties, many of which are farms, and has a total value of 250 million euros. It also provides management, leasing and hiring services through the rich portfolio of the bank and its clients, and is eyeing the Balkans for its next step. Athens’s new attraction Citylink, the new shopping center in central Athens developed by Piraeus Real Estate, is about to open its doors to the public at the former Army Providence Fund building, near Syntagma. This is the first time a listed architectural monument in downtown Athens has been turned into a modern multiple-use space, this one filling some 57,500 sq.m. It will host the Attica department store and many other independent shops. Piraeus Real Estate has already signed leasing contracts with well-known chains such as Cartier, Holmes Place, Van Cleef & Arpels, Tzannes-Montblanc Boutique, Tous, Diesel Black Label, Salvatorre Ferragamo, Warner Bros, Bally Liana Vouraki and Tsantilis. The investment exceeds 250 million euros. According to Piraeus Real Estate’s CEO, Giorgos Sortikos, «Citylink can become the new attraction of Athens, giving the city center splendor and a cosmopolitan character.»

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