ULI Greece & Cyprus: “Buildings We Admire” - Electra Metropolis Site Tour
October 25, 2017
On 26th September 2017, ULI Greece & Cyprus organised a site tour at the Electra Metropolis Hotel, a former government office building redeveloped into the first and only LEED-certified hotel in Greece and the most recent addition to the Electra Hotels & Resorts portfolio.
Mr. Yiannis Retsos, President of SETE, HHF and Managing Director at Electra Hotels & Resorts, welcomed ULI members to the roof garden of Electra Metropolis, with a stunning view of the Acropolis.
Retsos delved into the intriguing history of this asset. Developed on a site owned by the Church of Greece, the property was built in the 1950s to the designs of the renowned architect Patroklos Karantinos. It was let to the Greek government, housing the Ministry of Education, Research, and Religious Affairs up until 2007, at what was the top of the property market. The subsequent seven attempts to relet it through public tenders were unsuccessful and the property was vacant for eight straight years. In hindsight, said Retsos, the landlord was always behind the rapidly falling market rents while the demonstrations of 2015 exacerbated the dire predicament of the property market around Syntagma Square.
In 2015, Electra Hotels & Resorts became the highest bidder in a yet new attempt to let the property and managed to secure a 35yr+15yr lease for an initial rent of €750,000 per annum. The rationale: add a third hotel property targeting a more upmarket contemporary 35+ lifestyle tourism, adding diversification to their existing B&B offering in Electra Hotel in Ermou str and the family offering of 45+ years at Electra Palace in the Plaka area. In addition, that particular location was witnessing a renaissance, with a boom of restaurants, bars, and cafes between Syntagma Sqr and Agias Irinis Sqr, all within walking distance from the hotel.
The reconstruction works were undertaken with one of the larger local contractors, AKTOR, who delivered in a mere 14 months. A number of obstacles cropped up along the way, the most significant of which were the worse than anticipated structural conditions and the various hindrances put forward by the Central Archaeological Council, since a part of the old Themistoclean Wall (dating 5th century BC) runs through one of the basements of the hotel. The wall is now the show piece of one of the conference rooms, a far cry from the plastering-over it had suffered during the tenure of the Ministry of Education. Unavoidably, there were cost overruns and the budget ballooned from €9m to €17m (including FF&E). One of the larger local banks, in a show of confidence, lent about two thirds of the capex amount.
Performance to date has far exceeded expectations, with occupancy rates soaring as high as 84% and ADRs being the second highest in Athens, just behind Grand Bretagne. Payback is expected to be less than ten years.
Retsos’ presentation was followed by a networking dinner and a tour of a selection of rooms and common areas.