12 Jan Interview with Petros Machas, Founding Partner & Chairman, Machas & Partners
According to the IMF, Greece is set to surpass pre-pandemic levels in terms of real GDP, with 2.5% growth expected in 2023, a figure double the Eurozone average. Please give us your assessment of your country’s economic performance, how have you felt it at the firm’s level?
After 10 years of this unprecedented crisis, the sun shines again in Greece. The turnaround is obvious in most economic sectors, such as services real estate. We also see an inflow of investments from abroad, primarily from the US and the EU, with some substantial investments by multinational companies who have created hubs in Greece. This inflow will not only provide immediate help to the economy, but also help Greek society. It means that after these years in crisis during which at least one million people left the country, people are now coming back, which has a tremendous effect on the economy, especially in real estate and local consumption. The new target of the Greek government is to attract more people from abroad to relocate to Greece, establish themselves, establish their companies, and live the Greek lifestyle. It is different from the lifestyle of the rest of Europe, but it has a lot of positive aspects.
The country has taken an aggressive stance in implementing investment and economic reform policies under Prime Minister Mytsotakis, including a key investment law in 2019 designed to cut red tape, achieve full employment, and adopt international practices. How would you summarize the main undertakings of the government to promote the ease of doing business in Greece and make it a more attractive destination for investment?
Two incentive frameworks for investing in the country and for promoting relocation to Greece to affluent and high net-worth individuals have been implemented. This is a game changer for the Greek economy because bureaucracy is now behind us, and the crisis and the subsequent structural reforms that took place during those years of the crisis have greatly facilitated the way the administration now works.
In parallel, before the elections, the government focused on making the leaps in technology that were needed so that the country operated at the same speed as Western countries. During the COVID-19 period, huge steps had to be taken and then implemented. This has been a tremendous boost to investments here. At the same time, the government put in place a new incentive framework for people to come to Greece – Non-Dom status – which is very important because it gives the incentive to affluent individuals to relocate with a capped tax that has been approved by the European Commission.
In addition, there is an important incentive regime for pensioners which caps taxes at 7%. The Golden Visa status, which started in 2012, significantly supported the Greek economy during the difficult years, especially in real estate. Now, it helps the growth of Greek real estate sector. These plans have assisted the rebound of the Greek economy and the turnaround.
New investments are now taking place in the commercial and residential real estate sectors. We are also seeing significant investments in tourism, and in the well-being and health sectors, with a particular emphasis on the longevity sector. We believe that this will be the new niche market for Greece going forward. It is not only medical tourism but also wellness or wellbeing and longevity. The longevity sector is for people who want treatments to extend and improve the duration and quality of their lives, which I think is the next big thing for Greece.
Each year tourism has experienced very significant growth rates. As an example, during the 2004 Olympic Games, Greece had eight million tourists. In 2023, Greece had 36 million tourists which is huge growth within this period. This means something good has been achieved. This is not the result of good luck. It was a strategic decision properly implemented and the result was very positive for the economy.
Your firm is quite specialized in the real estate sector. Please provide your analysis of Greece’s real estate market, both commercial and residential. What are some of the prevailing trends that you see for 2024?
After 10 years the stock of real estate in Greece was not renewed, but now there is a very big trend in the construction of new buildings. Most are built with new technology and are environmentally friendly. Due to market growth, there is an ongoing demand for new premises for corporations or commercial use. In parallel, as the buildings of the past are now old, there is huge interest for new properties, which is why the market has increased significantly.
It is not only the demand from Greeks, but also from foreigners who get the Golden Visa, or those come to have a second pied-à-terre. For example, there are many Israelis who come to Greece and there are many people from India or from China who buy a property here. This has very significantly affected the Greek market.
I would also like to mention the landmark Ellinikon project, where we have been involved since 2012. This is a major project that has already changed Athens and will change Athens forever. It includes several residential buildings – one of which is designed by a famous architect, David Foster – and commercial buildings. It will be in a new, modern part of Athens on the coastal front. This will not only attract people from the Balkans or the Eastern Mediterranean, but also from other parts of the world to relocate. This summarizes the new narrative of the Greek economy: how to bring new people into the country – people who are young, creative and want to establish themselves in a safe environment.
The project has been ongoing since 2012. One of the latest developments is the high-rise building of Ellinikon, which is progressing as planned and due to be delivered in March 2026. There are also new high-end residential buildings called The Coves whose construction is now underway, and other residential buildings as well to cope with the high demand. These were not part of the initial project, but Lamda Development has decided to invest in new buildings to accommodate the demand for residential properties.
For foreign investors, how would you assess the ease of entering the Greek market through buying real estate? What kind of framework is here to help buyers enter the market?
There are tremendous changes. We put aside the red tape and rolled out the red carpet for investors. In the past, title searches, and all that was difficult and done manually. Now, there is an electronic process that is much quicker, more straight forward and more transparent for the investor. There are also tax incentives. For example, if you buy a property in your own name, when you come to sell it, you pay zero capital gains tax. This was implemented during the crisis to help the real estate economy, but now I think it will continue. It gives an incentive to people to enter the market to make money and brings new investors to the country.
What about the commercial and industrial segment of real estate?
The commercial segment is going very well, with new malls in the process of being built. In Ellinikon, a mega mall is planned, while another very high-end mall is planned for that project’s marina. In addition, the rental prices of commercial real estate have gone up dramatically in the past few years.
You founded Machas & Partners back in 2011 as a full-service law firm. The company caters to large corporate and private clients. Please give a quick overview of the law firm’s current specialties and capabilities.
We are a firm of about 50 lawyers and specialize in most of the dynamic sectors of the Greek economy. Our vision is that we are the enzyme to improve the relation between investors and the economy and the state. That is why we work a lot with foreign clients. We know what their interests and concerns are, and we are an interface between Greek reality and what the investors want from the country. We work not only in real estate but in commercial transactions and finance. We have worked with all the major banks in Greece and with investors who have invested in the banking sector, as well as all the other civil law cases, criminal litigation, and whatever is needed for private clients.
For private clients we have a multi-family office practice where we advise clients on the administrative part of family offices. We provide them with our experience and knowledge on how a family office works. We advise them on certain structures in legal tax matters related to family offices. We advise the principals, and we participate in family office meetings. We try to bring our experience and knowledge to the principals to help them achieve their endeavors.
Machas & Partners also represented Intercontinental International REIC in a €250 million merger. What are some of the largest mergers and acquisitions that the firm has recently been part of, and what kind of expertize has it gained in this field?
We have participated in a lot of transactions. We represented a Greek brand in the restaurant sector called Nammos in which there was a direct investment of a listed fund from Abu Dhabi. I cannot disclose the exact number of that transaction, but it was in the hundreds of millions. We also participated in other significant transactions in the energy sector. In Ellinikon, we represented most of the high-rise buyers.
Leading rating agencies raised Greece’s investment grade in 2023 due to the latest reforms and political stability. To what extent do you think this will lead to an acceleration of investment as well in the real estate sector? How is your firm preparing for that?
This upgraded rating of the Greek economy will have a significantly positive impact on the real economy. The banks will be much stronger. They will have access to investments and capital which will go into the real economy. Real estate prices will increase and get closer to the prices of similar capital cities in the EU. The upgrading of the Greek economy will also give a signal to the investors in the Greek capital market. The capital market is extremely important to the overall economy. During the crisis, the Greek stock exchange was very shallow and that is why there were no investments from major international players, but now Greece is back on the radar and Greek companies which are attractive for investment have all the credentials for direct investments.
Are there any specific sectors that you think will particularly benefit from this surge?
The technology sector will benefit. There is a very significant start up community now in Greece which will benefit. So, technology, tourism, well-being, and the food sector will benefit. There is a big uptick in exports in the food sector.
The US has traditionally been the country’s eighth largest source of FDI. How are Greek law firms such as Machas & Partners working to internationalize their practices, and what kind of potential is there to work further in the US market and with US clients?
Since our establishment, we have been working with American firms. We have strong links to major law firms in New York and California. We advise their clients, or we work together on projects related to Greece and the US. This is a very significant part of our practice and that is why we participate in conferences, and we travel extensively to the US to keep these links alive and to assist the clients from the US.
What is your final message to the readers of USA Today?
Greece is back and the place to be. There are still opportunities and significant upside down the road. Whoever embarks on this venture will have very positive returns.