NEWS

Foreign investors looking into Greek islands

Tourist firms from abroad, heirs to fortunes and shipowners are the usual owners of private islands or islets in Greece, where until recently owning one’s own self-contained piece of real estate offered little more than prestige. These days, however, the high amount of liquidity enjoyed by many investors, particularly from the Middle East but other areas as well, has focused attention on these islands for billion-euro tourism investments. What most people don’t know, however, is that 70 percent of private islands are governed by environmental protection status, included in the European Union’s Natura program that classifies entire regions as of particular natural beauty. The remaining 30 percent, however, offer considerable prospects for development, but investments of this size call not only for a broad consensus among the people of neighboring islands but must fulfill a number of conditions. According to Mike Vassileiou, who heads the Greek branch of the International Real Estate Association (FIABCI) and is the director of Neoktimatiki realtors, the main factor in an island’s favor is to be close to the mainland, or at least another inhabited island, for easy access to utility networks. «Apart from being of adequate size (and not a rocky islet), it should have some form of natural harbor or shallows for easy access by sea. Another important factor is the presence of an underground water source,» he added. Also mandatory is the existence of ownership papers so that the transfer of title can take place. All these elements together establish the value of an island. Foreign investors are now, more than ever before, showing a strong interest in these properties, particularly in islands near the coast of Attica or the Saronic Gulf, such as Patroklos, owned by the Yiatrakos family, which is very close to Cape Sounion. Shipowners are the most prominent group of owners of islands in Greek waters. The Onassis family has a number of islands opposite Nydri, on the island of Lefkada. Apart from the legendary Skorpios, Onassis heiress Athena Roussel is named as the owner of the islands of Kastri, Sparti and Tsikari. The Embeirikos family and Spyros Karnezis, through the Vestri Trading firm, own islands in the Petali group opposite Marmari on the island of Evia. Paloma Picasso also owns one of the Petali islands. The Greek-Cypriot Hadji-Ioannou family (including Stelios Hadji-Ioannou, the founder of easyGroup) owns Skyropoula in the Sporades. George Economou of DryShips, listed on the New York Stock Exchange, owns Kortiano in the Cyclades. The Nomikos family owns Christiani off Santorini. Tourism Development Minister Fanni Palli-Petralia, along with members of her family, owns the 100-hectare island of Rinia in the Sporades. Singer Vassilis Terlengas has inherited an Ionian island in the Echinades group, although these have Natura status. Paradoxically, while many owners of islands have inherited them and declare them every year to the tax department, paying property tax, they are not able to profit from them as they have protected status. Not without risks Of course, private islands are not only of interest for investment purposes or as a romantic holiday hideaway. In many cases, particularly in places such as the Caribbean, islands are used for drug running or weapons smuggling, as they are not subject to any controls. Another potential reason for buying them is for money-laundering purposes. Naturally this does not apply to the properties mentioned here, but in some cases it is difficult to find the actual owner, particularly when the purchase has been made by an offshore group for tax purposes or to conceal the owner’s true identity. In Greece, national interests also have to be taken into account, so the state retains the right to reject a prospective buyer, particularly in the eastern Aegean.