Greek Economic Recovery Presents Opportunities for Investors

MAR-APR 2018|BY ELIAS ATHANASIOU, CEO, ENTERPRISE GREECE
Economic indicators confirm that the economy has turned the corner from crisis to recovery in the last year.

Exports jumped 13.2% to 28.8 billion, all time record, Greece returned to the bond market, and FDI surged 35.6%, bringing 2017 inflows back to pre-crisis levels.

This presents a window of opportunity for investors, ready to ride the upswing as the recovery gains strength. In 2017, the Greek GDP grew 1.4% as it emerged from a years-long recession, with growth expected to accelerate to 2.5% this year. The recovery is here and the economy is ready to take off.

The tourism sector is one of the main drivers of GDP growth. An unrivaled brand, Greek tourism brought in €14.6 billion in 2017, an increase of 10.5% over 2016 and 30 million arrivals, both all time records. This year is shaping up to be another record year in tourism, with pre-bookings—an early indicator of the summer season ahead—rising between 15% and 30%. The continued strength of tourism, attractive asset prices and a burgeoning recovery, translate into appealing investment opportunities in tourism-related commercial real estate, with many hotels still trading below replacement value.

A number of investors have already started to move into the Greek commercial real estate market. Several major hospitality brands expanded into Greece in 2017, either for the first time or enlarging their existing footprint. Tour operators Thomas Cook, FTI and TUI have all announced plans to increase their Greek portfolios. Kerzner International Holdings and Dolphin Capital Group are investing €150 million in a resort project on the island of Kea, and in the spring of 2018 the iconic Astir Palace on the Athens Riviera will debut as Four Seasons Astir Palace, the first Four Seasons hotel in Greece.

The crisis years put pressure on underperforming properties due to tightened lending standards. As a result, there is room in the Greek hospitality market for high-quality, branded supply to serve the ever-increasing number of visitors. Another advantage for the hotel industry is the heavy emphasis the national tourism authorities are placing on promoting Greece as a 365-day destination. This effort includes initiatives to further develop tourism infrastructure and specialized tourism suited for non-summer months, such as city breaks, sports tourism, health and wellness tourism, etc.

In short, we are at a juncture in Greece that presents a particularly auspicious constellation of conditions for investing in commercial real estate, whether in the form of turnkey operations, upgrading and development of defunct properties, or developing new hotels and resorts from the ground up. For major projects, Greece also offers a Fast Track framework for investors, providing a streamlined and speedy process for qualified investors. Tourism is sometimes referred to as the locomotive of the Greek economy. It’s a good time to get onboard.

ENTERPRISE GREECE has as its core mission to facilitate investment in Greece, by providing information, support and other services to investors, and to promote export of the highly competitive products and services produced in Greece.

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