Last year proved to be a very successful one for investors who chose to position themselves in Greek real estate stocks, as they followed the general trend of the local market and offered very good returns. Investors who opted for indirect investment in the property market secured high yields within a short period of time, just as options for direct investment via the purchase of property are considerably reduced. This is due to the high prices that are putting ever more pressure on returns, not just in Greece but also across Europe. Elviemek was the stock that stole the show in 2006 among Athens-listed real estate companies. Despite its limited daily transaction volume, it closed the year with a rise of 129.1 percent. Also impressive were the returns of Babis Vovos and Lamda Development, which gained 110.07 percent and 108.51 percent respectively. Other stocks with high gains were GEK (up 29.71 percent) and REDS, the Hellenic Technodomiki subsidiary (higher 32.19 percent). Real estate investment companies secured lower yields in 2006. EFG Eurobank Properties added 7.43 percent to its value, while Piraeus Real Estate Investment enjoyed gains of 18.69 percent annually. Both stocks expect much better performance in 2007, given that their property portfolios are still under formation. Since the summer of 2005, real estate company officials had been expecting a rebound in the sector’s stocks, as the majority of major firms showed reduced profits, or even losses, which was due to the high spending incurred in developing their investment programs. Now most of them have completed the main part of their investment program, with the commercial properties they have developed fetching considerable revenues, improving their financial figures and the course of their stocks. For example, at end-2005 operation of The Mall Athens started, which provided a major boost for the financial results of Lamda Development. Similarly, at the end of 2006 the same firm proceeded to sign an agreement with Blue Land Properties SA (of Theodoros and Gianna Angelopoulos) for the sale of the Ilida business center for the price of 41.4 million euros. The building’s transfer will be completed after the end of construction work, expected in the first half of this year. Babis Vovos had under construction commercial properties totaling 143,700 square meters at end-2005, with some 74,000 sq.m. of leasable space. During 2006, the commercial complex in the Faliron Delta began operation, including shops, a cinema multiplex and office space with a total area of 23,000 sq.m. In the next few months, the construction of an office complex at 108-110 Athinon Avenue will be completed, which is to host Hellenic Exchanges SA. The complex consists of two buildings: The first (with an area of 6,700 sq.m.) will house Hellenic Exchanges, while the second (17,000 sq.m.) will remain the property of Babis Vovos. Another important project being planned is the creation of a shopping center at Votanikos with a surface area of 70,000 sq.m. Already a German investment fund has shown interest in this major project. There is similar interest in the commercial complex Babis Vovos is planning on Syngrou Avenue. It is however impossible for anyone to answer responsibly and accurately whether those impressive gains will be repeated this year. «In 2006, the sector of real estate companies, just like all the others, was significantly helped by the generally positive climate on stock markets. Furthermore, the property domain has been underestimated over the last couple of years even though it has some very attractive firms with very strong property portfolios,» says Vassilis Vlastarakis, analysis director at the BETA stock brokerage company. «The upgrading of their portfolios with high-profile properties, the placement of foreign institutionals and foreigners’ interest in commercial properties has gradually brought the price of these stocks to correct levels, resulting in high yields,» he suggests. Vlastarakis believes the sector enjoys fair value for its stocks and that property prices will not continue to rise, meaning there is risk of a correction.