10 Apr Interview with Odisseas Athanasiou, CEO, Lamda Development
The Greek real estate market has expanded at a rapid pace in recent years, with investment in commercial real estate reaching a record €1.65 billion in 2022, a rise of 40% from the previous year. To start, how would you assess the market’s dynamism today? How have recent events such as the return of tourism propelled the real estate market?
A combination of factors has propelled the market. One of them is tourism. More and more people not only want to visit Greece on vacation, as was the case in the past, but now want to buy a home here and spend a large amount of time on our islands. There is another reason for this: COVID-19 exposed how important it is to live in an open environment. The country became more fashionable, and this is one of the factors.
There is also more disposable income and more optimism from Greeks, so they have started buying homes for the first time in a while. In addition, many foreigners want to acquire properties in Greece, including many people from the Middle East: Lebanese, Israelis and Egyptians who buy homes in Greece for many different reasons, starting with the situation in their countries. Saudi Arabians or Syrians also buy homes here. Then there are the people from the Greek diaspora who want to buy a home now, such as those living in the US who may be second or third generation Greeks, or Europeans, for example. This has propelled the market and prices have gone up. Additionally, Ellinikon has contributed to Greece because people start to hear that there is a project in Greece that is going to change the whole Athenian Riviera. So, it is a combination of factors.
Greece has recently attracted large sums of investment in logistics such as the €600 million from COSCO Shipping to enhance Piraeus, the country’s largest port. What impact has large investment in logistics had on the real estate sector and what does it mean for investors?
They have played their role along with all infrastructure projects. If someone wants to move and live here, they want to make sure the infrastructure is here, so logistics is a big part of it. COSCO, the Chinese company improved the port of Piraeus, and it became much better with the investments they made. There are some logistics and infrastructure in the form of railways that connect the port and the airway stations, so all this contributes a lot.
Lamda Development hit many milestones recently, with its malls segment reaching record operating profits. In May, the company said revenue from property sales at its giant Ellinikon project will exceed €500 million in 2023. Can you describe the company, its main assets aside from the Ellinikon project, including your malls and marinas?
We started about 20 years ago as a real estate company. Our major projects were in the retail industry, as we had created three malls. Then we ventured into the office sector, the residential sector and then marinas – all in the first 10 years of the company. It became very successful, especially in the creation and management of the malls.
We have the three largest and nicest malls in Greece and several marinas, but the project that put us on a different trajectory was Ellinikon. It is an €8 billion project at least and has had a huge socioeconomic impact. In terms of employment, we will create more than 8,000 jobs, while GDP will increase by 2.5%. Foreign investors are very interested and a couple of funds have already invested in developments.
We are creating the entire project from scratch and it will be one of the first cities in the world that will be “smart” from scratch. It will be a very sustainable and green project. We are creating a park the size of London’s Hyde Park. We say we are creating a paradigm city because it will be a 15-minute city, meaning that you can get to anywhere in Ellinikon within 15 minutes, either walking or cycling. You can live there, work there, do sports, and everything is going to be in this radius.
We are very excited and very passionate. In 2024, we will start an international marketing campaign. So far, we have not advertised a lot. It is one of the things to be erected from the ground, so we have credibility. To date, we have been carrying out technical studies and building the foundations. In 2024, there will be buildings all over the place, parks and so on. Construction has already started on the Riviera Tower. By late 2024, it will be 150 meters high.
What challenges have you had to overcome to get a project of this size on track? What milestones have you had to cross to get the project where it stands today?
We have had all kinds of challenges. Permits were our first challenge. We had many hurdles to jump over to obtain them. Greece is a place full of archeological remains, so we had to make sure that we did not find archeological material during our excavations. The second challenge was to persuade big international architectural names like Foster + Partners, Kengo Kuma, BIG to come here to create a place that we are describing as a global paradigm.
People probably had on their mind that this project was going to go bankrupt. We had to change that perception which was difficult. A serious difficulty was to bring Greeks and non-Greeks alike from abroad to work for this project. Many Greeks had left to go to the Middle East, New York, or London because of the crisis. This meant we had to bring them back, which was difficult, and this happened in the middle of the pandemic. We had to do all our recruitment interviews through a webcam.
So, there were many difficulties: permits, recruitment and convincing people, training the staff, and the foreign element that we needed to persuade. But now we are there, and the opening is behind us. We have already designed the plans; we are in the process of construction, but the challenges were huge.
How does the project stand out in terms of European mega-projects? How is it setting the pace in the field of urban regeneration?
Right now, Ellinikon is the biggest project of its kind in Europe because of its sheer size. It is an €8 billion project, but beyond its size, the project is striking in its diversity. Imagine that in big city like New York you have a sandy beach like on a Greek island like we have in Athens.
We have one of the largest parks in the world next to the sea with this amazing weather 10 months a year. It is a smart city. It is sustainable and has designer buildings planned by signature world famous architects. It is completely unique which is more remarkable than just its size.
How is Ellinikon setting the pace as a green project and to what extent are you hoping to inspire others?
We hope to inspire everything in Greece. We want to be the Greek ambassador for climate change. These are nice words, but what are we doing about that? First, all major buildings in Ellinikon are going to be certified with LEED Platinum and Gold Rating. The second thing is that we are trying to make this whole six million square meters project fed by renewable energy.
We made an investment in windmill farms to make sure that all energy is going to be produced by these windmills. Apart from this, we are creating one of the biggest parks in Europe. In terms of waste, energy, and water management, we take care to be CO2 neutral. This is possible because we are designing everything from the beginning. We talked before about the “smart city” concept, which will play a role in the management of water and energy. We are grading the roads now so we can put down fiber optics wherever we want and sensors wherever we want. It is easier to create this sustainable and smart environment when building from scratch.
To what extent do you see a rise in sustainable investments in the local real estate market?
We see this now in some older office buildings being transformed into more sustainable buildings or at least upgraded by having the LEED Silver Rating Certification stamp. We see a renewed interest in this green aspect across the board. If we did not have the war in Ukraine and the crisis it created in the European energy market, this transformation would happen faster. Due to the energy crisis, some countries are now having to use coal, but there is an emphasis on sustainable investments in Greece.
The US is one of Greece’s largest foreign direct investors. How significant of a market is the US in terms of real estate investment in Greece and for Ellinikon in particular?
The US has come back to Greece in full force, starting with US tourists who returned 2-3 years ago. One reason was the dollar strengthening against the euro, and the other was that they were rediscovering Greece, as we managed the COVID-19 crisis well. Strangely, the bad publicity that the financial crisis created made Americans more aware of Greece. Lastly, the Greek diaspora in the US has started to buy homes here.
How important is the US market for your showcase Ellinikon project?
The US market is important because we think they are going to buy many homes, both Greek diaspora and others. Another factor is the relationship between the US and Greece is probably at its best level ever. To some extent, this is due to our Prime Minister and the government, which is very pro-business, pro-American and pro-Western.
How easy is it for a foreign investor to acquire real estate in Greece in terms of processes? What could be done to further accelerate investments in this sector?
In real estate, when talking to foreigners, it is important to persuade them that we have become very pro-business and stable in our institutional framework. This is very important as we do not want them to think there will be large tax changes, for example. To have international brand names and international hotel chains come here is also important because it creates visibility for example hotels and a brand residence.
Four Seasons is an example. One and Only is another example that only opened recently. Service has become better and, going forward, Greece needs to develop in several sectors like hospitality and gastronomy. We need to take better advantage of our historical and cultural background, which was not the case before. Museums were closing and there were not any people. It did not give a good impression to tourists.
We have also changed our tax framework to make it more hospitable for people from abroad. They come here and have a lower duty rate, meaning it is also beneficial for some people to have their tax base in Greece.
You have headed of Lamda Development for more than 15 years and have seen the Greek real estate market shift dramatically. Tell us a little bit about your vision for the company. Where would you like Ellinikon and Lamda to be in the next five to ten years?
Our vision is not to be just a real estate company, but to create venues and experiences and venues that make Greeks’ and visitors’ lives better. To put it into more concrete elements, by 2026, we want to complete the whole 3.5km Athenian Riviera coastline of Ellinikon and if this happens, Greece will be put on the map with high rises, hotel, beaches and parks.
What is your final message to readers of USA Today?
We are creating a paradigm way of living and we invite everybody to experience part of it. In 2024, they can visit to see with their own eyes what we are creating.