Further gains to Greece's real estate sector will be limited if there are no structural changes to the institutional framework the sector operates within, according to industry experts speaking at the Prodexpo conference. In the meanwhile, however, large-sized property investments in Greece continue to rise and are seen reaching one billion euros for 2019.
Interest in different segments of Greece's property market largely varies with most investors keeping a close eye on logistics, prime office buildings, and some hospitality-related assets. Next in line is interest in retail space and residential housing, experts said.
Aristotelis Karytinos, chief executive of Prodea, pointed out the need for a "serious institutional framework" in areas such as town planning and regulations affecting real estate investment companies. "Even when we have an institutional framework that works, we change things for the worse, as was the case with the tax on real estate investment companies, which was increased by 750 percent". The institutional framework on companies like Prodea was created more than twenty years ago and treats companies like mutual funds, he adds. Despite the problems, real estate investment companies survived the country's crisis, with the rate of non leased assets staying below the four percent mark.
Another key obstacle in the markets and one putting off foreign investors is the lack of transparency and market data, said George Kormas, chief executive of Piraeus real estate.
Foreign players are only interested in structured products and the security offered, so far, by real estate investment companies. Environmentally friendly buildings are also seen continuing to be a major drawcard to international companies, added Kormas.
A view reflected by other sector officials, who stress that Greece will soon have to offer zero-emissions buildings, as seen in the rest of Europe.
Ioannis Tegopoulos, Executive Vice Chairman at HipoGes Hellas, also called for changes to the institutional framework to prepare the market for properties tied to red loans. Now the deals being completed are on top assets that have been passed on to managers, said Tegopoulos, adding that "in two years many properties will enter the market." Most of these assets are old (60 percent were built before 1980) and the introduction of a land bank is needed, as seen in other countries.
Speaking on behalf of foreign investors was Andreas Santis, Managing Director - Office Head for Western Balkans, Greece, and Cyprus. His company is developing an investment in Kassiopi, Corfu, on land that was acquired from Greece's privatizations agency HRADF. "At the start, everyone tells the foreign investor that arrives in Greece that he has money but no knowledge of the Greek market. After six to ten years, the investor is rich in knowledge of the Greek market but has no money."