Investing across Europe & Greece: Timing & Risk in an Uncertain Environment

PRODEXPO

06 October, 2014

Dika Agapitidou MSc (Econ) MRICS

• Real estate is a lagging economic

indicator

• Direct real estate investment is

expected to exceed an 100%

increase for the year to December

2014

€ 230 mn in 2012

€ 410 mn in 2013

€ 730 mn in 2014 (first 9

months)2Prodexpo, 06 October, 2014

Greece is back on the Investor Radar

• Global

- liquidity

- low returns in most vehicles

• Local

- twin surpluses – end of recession

- real estate market bottoming out

- bank system stabilization

3Prodexpo, 06 October, 2014

Investment Drivers …

• International

- CEE competition (eg, Romania,

Czech Republic, Poland)

• Local

- lack of suitable product

- taxation

- bank unwillingness to write down

assets

4Prodexpo, 06 October, 2014

… and Obstacles

2012

5

Commercial Real Estate Direct Investment > € 2.5 mn

• Hotel € 112 mn

• Industrial € 63,5 mn

• Office € 31,5 mn

• Leisure € 22 mn

• Total € 230 mn

Prodexpo, 06 October, 2014

2013

6

Commercial Real Estate Direct Investment > € 2.5 mn

• Retail € 143 mn

• Office € 130 mn

• Hotel € 80 mn

• DR (HRADF) € 40 mn

• Industrial € 16,5 mn

• Total € 410 mn

(of which € 150 mn via HRADF)

Prodexpo, 06 October, 2014

2014 (to September)

7

Commercial Real Estate Direct Investment > € 2.5 mn

• Hotel € 417 mn

• Office € 270 mn

• Industrial € 39 mn

• Retail € 3,3 mn

• Total € 730 mn

(of which € 661 mn via HRADF)

Prodexpo, 06 October, 2014

8Prodexpo, 06 October, 2014

• Old stock – lack of new developments

• Fragmented ownership, esp. in retail

• Unstable income, esp. in retail

(turnover rents)

• Refurbishment costs, esp. in offices

• Changes in the value to loan ratio ?

(70% in 2007 Q1 – 40% in 2013

Q4)

Current & Short Term Challenges

• Direct Investment

- holiday homes

- sustainable buildings – LEED &

BREEAM certifications

• Indirect Investment

- REICs

- NPLs – distressed property

9Prodexpo, 06 October, 2014

Opportunities

Thank you

Dika Agapitidou MSc (Econ) MRICSDirectorAthens Economics/ JLLwww.athenseconomics.gr