For­eign funds sniff­ing out prop­erty bar­gains in Greece

Kathimerini English - - Front Page - ILIAS BEL­LOS

For­eign pri­vate eq­uity funds with no prior history in Greece are said to be look­ing for op­por­tu­ni­ties in the de­pressed Greek prop­erty mar­ket ei­ther through di­rect pur­chases from the own­ers or through bank fore­clo­sures. In­ter­est in the Greek mar­ket be­gan to ac­cel­er­ate im­me­di­ately af­ter the an­nounce­ment of the ref­er­en­dum, which sent prices plung­ing fur­ther.

Sources at a lead­ing Amer­i­can in­vest­ment con­sul­tancy firm that spe­cial­izes in real es­tate told Kathimerini that most of these in­vest­ment funds tar­get re­turns in a fiveto seven-year frame and have planned for a three-year pe­riod of in­ac­tiv­ity of the as­set. This is the pe­riod they be­lieve will be re­quired for gains to be achieved through re­selling the prop­er­ties.

Most of the in­ter­est is com­ing from the US and China. New leg­is­la­tion in the pipeline re­gard­ing how banks han­dle fore­clo­sures is ex­pected to act as a cat­a­lyst for sales.

The Greek mar­ket was seen as par­tic­u­larly at­trac­tive due to the re­cent pos­si­bil­ity of a new cur­rency, which would have driven prices down fur­ther, but also be­cause of the coun­try’s poor macroe­co­nomic en­vi­ron­ment. China’s grow­ing busi­ness in­ter­est in Greece via the coun­try’s main port is also a driv­ing fac­tor.

At the same time, the cli­mate of in­se­cu­rity has caused sev­eral in­ter­na­tional names to freeze their ex­pan­sions in Greece, sources close to the is­sue said.

In any case it is clear that the sharp drop in prices, and of­ten the ex­pec­ta­tion of even greater dis­counts, are at­tract­ing for­eign in­vestors with a risk ap­petite for the Greek prop­erty mar­ket. Ac­cord­ing to the pe­ri­od­i­cal sur­vey Global House Watch, is­sued by the IMF, Greece is show­ing the third-largest cor­rec­tion in house prices world­wide since 2007. Prices in Greece have fallen about 40 per­cent, with a cor­re­spond­ing drop in Latvia of 45 per­cent and Ukraine 70 per­cent.

Prop­erty prices in Greece have fallen about 40 per­cent since 2007, which is slightly less than in Latvia.

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