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Moving ahead or moving away?Researching Real Estate Investment Sentiment for Greece
Yes61%
No39%
Dear Investor,
Is local finance a pre-requisite for you when considering an international RE investment?
What would be your targeted equity IRR in order to consider a RE investment opportunity in the following regions (assuming a 5 year guaranteed period from an AAA tenant)?
In November 2014, you answered
Yes58%
No42%
< 5%5% - 7%7% - 9%
9% - 11%11% - 13%13% - 15%15% - 17%
> 17%
0% 5% 10% 15% 20% 25% 30% 35%
< 5%5% - 7%7% - 9%
9% - 11%11% - 13%13% - 15%15% - 17%
> 17%
0% 5% 10% 15% 20% 25% 30%
< 5%5% - 7%7% - 9%
9% - 11%11% - 13%13% - 15%15% - 17%
> 17%
0% 5% 10% 15% 20% 25% 30% 35%
Wes
tern
Eur
ope
Cent
ral E
urop
eEa
stern
Eur
ope
And for Greece?
7% - 9%
9% - 11%
11% - 13%
13% - 15%
15% - 17%
> 17%
0% 5% 10% 15% 20% 25% 30%
Investors target 15%-17% equity IRR for Real Estate invest-ments in Greece.
Would you consider…
32%
61%
7%
Yes Possibly No
… investing in the Greek RE Market? …undertaking development risk in Greece?
25%
50%
25%
Yes Possibly No
…undertaking refurbishment projects in Greece?
61%
36%
4%
Yes Possibly No
58%33%
9%
Yes Possibly No
When considering investing in Greece which would be the 3 major factors acting as drivers for you?
When considering investing in Greece which would be the 3 major factors acting as barriers for you?
In November 2014, you answered
1 26% Large number of distressed properties2 20% Turning point of the economy3 19% Continuous growth in tourism4 15% Anticipated capital appreciation in the mid/short-term5 7% Challenging investment environment6 6% Fiscal restructuring7 5% Existence of other investors8 1% No currency risk
1 23% Taxation inconsistency2 22% Political risk3 18% Current economic climate4 13% Low local finance5 10% Capital controls in Greek banks6 9% Shortage of quality investment product7 4% Lack of market indices8 1% Unclear exit route
Investors now have less interest in investing in the Greek Real Estate Market than 18 months ago.
What about your Greek RE portfolio?
For the following sectors, what would be your minimum Gross Initial Yield (assuming a 5 year guaranteed period from an AAA tenant)?
Office: 16%
High Street Retail: 9%
Shopping Centres / Retail Boxes: 15%
Industrial: 1%
Logistics: 9%
Hotel & Leisure: 38%
Residential: 11%
Min Average MaxOffice 7.00% 9.00% 12.00%
High Street Retail 7.00% 9.00% 15.00%
Shopping Centres / Retail Boxes 7.00% 9.50% 15.00%
Industrial 9.00% 12.50% 20.00%
Logistics 8.50% 11.50% 15.00%
Hotel & Leisure 7.50% 10.00% 14.00%
Residential 4.00% 6.00% 6.50%
How would you allocate your invested capital in the following RE sectors?
In November 2014, you answered
Office: 26%
Retail: 21%
Industrial: 11%
Logistics: 5%
Hotel & Leisure: 37%
Hotel & Leisure remains the most attractive sector of the Greek RE market.
24%
What are your portfolio’s prospects?
What would be your average holding period for a RE investment in Greece?
1 - 3 yrs 3 - 5 yrs 5 - 10 yrs 10 - 15 yrs0%
10%
20%
30%
40%
50%
60%
What are the investment prospects for the following RE sectors in Greece over the next 5 years?
Serviced offices
Offices
Student housing
Serviced apartments
Holiday apartments
Retirement housing
Hotel & Leisure
High street shops
Shopping centres
Retail boxes
Self-storage facilities
Logistics facilities
Industrial / warehouses
Data centres
Parking
0%
0%
4%
4%
0%
0%
7%
0%
0%
4%
0%
0%
0%
7%
21%
32%
11%
25%
0%
14%
0%
7%
7%
11%
36%
18%
32%
11%
21%
36%
25%
29%
18%
7%
14%
4%
46%
32%
50%
18%
25%
21%
46%
25%
21%
32%
25%
25%
46%
43%
36%
29%
39%
32%
18%
21%
25%
11%
25%
11%
7%
11%
18%
43%
14%
57%
7%
14%
0%
7%
21%
0%
11%
4%
11%
4%
21%
11%
4%
14%
4%
4%
7%
7%
18%
14%
21%
21%
18%
Very Poor Poor Fair Good Very Good No Opinion
Would you consider investing in RE asset backed NPLs in Greece?
Yes
Possibly
No
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
What are the country’s prospects?
What are the investment prospects for Greece over the next 5 years?
4%
29%
50%
18%
Yery good
Good
Fair
Poor
Very Poor
8%
58%
23%
7% 4%
Yery good
Good
Fair
Poor
Very Poor
In November 2014, you answered
Investment sentiment has significantly lost its optimism since November 2014
What are the conclusion?
1. Yes, there is investment interest for real estate assets in Greece.
2. The largest percent of investors are distressed focused.
3. Hospitality is the prime sector of interest.
4. Returns from an IRR perspective are of the higher than those of Western & Central Europe.
5. The need of local financing is highlighted.
6. Investment interest however translates into very few transactions each year.
7. Deviation between bid price and asking price remains significant.
8. Decision making for processing of NPL portfolios still remains slow.
Thank you!
Newsletter is available for download on our website: www.nai-hellas.gr