ULI Greece and Cyprus: Emerging Trends 2018 Presentation Recap

ULI Greece & Cyprus held its annual Emerging Trends in Real Estate Europe report presentation on Thursday, 14 December 2017, attended by more than 150 professionals from various disciplines of the Greek real estate industry, including investors, financiers, lawyers, architects, valuers, and real estate consultants. The event was held at the Mpodosakeion office building, kindly hosted by Eurobank.

Keynote speaker Lisette Van Doorn, CEO ULI Europe presented and analysed the findings of the 2018 report, which was based on the opinions of more than 800 internationally renowned real estate professionals.

The presentation was followed by a panel discussion, as well as a short Q&A session, with the panel consisting of key players in the local real estate investment community, including Dr Aristotelis Karytinos, CEO NBG Pangaea REIC; Mr Stefanos Vlastos, Director Grivalia Hospitality;  and Haris Koureas, Deputy CEO Marina Ayia Napa. The moderator was Ioannis Petrou, Senior Manager PwC.

In his opening remarks, ULI Greece & Cyprus Chair Tassos Kotzanastassis had the opportunity to recap ULI Greece & Cyprus’ activities throughout 2017, including presence in Prodexpo 2017, where ULI held a panel regarding sustainability in real estate investments and also presented a study on migration in a European context, as well as presence in ERED Conference, where ULI Greece & Cyprus presented the latest trends of the local hospitality market. In addition, Kotzanastassis mentioned the “Buildings we Admire” series of visits to landmark buildings of Athens, such as the Green Plaza office complex, the Electra Metropolis Hotel, and the Cosmote e-Value offices.  Kotzanastassis also referenced the networking initiative “Greeks Abroad”, in which expat professionals met with the local ULI members in several informal gatherings. Participants had the opportunity to learn about practices from different markets and exchange experiences and ideas with foreign real estate markets professionals. Finally, Kotzanastassis discussed global ULI Product Councils, as well as their local implementation in the context of an already-formed ULI Sustainability Council and the forthcoming Hotel and Resorts Council.

In her introduction, Lisette van Doorn thanked the local ULI Chair and the Executive Committee both for the last 12 month’s heavy agenda, as well as for the interesting plans for the year ahead. In her presentation of the Emerging Trends report, van Doorn noted that the 2018 survey responses reflected slightly less concern over geopolitical uncertainty than in the 2017 report.  According to the report, the major issue of 2018 is predicted to be a lack of suitable assets and the competitive environment of the real estate market caused by economic growth, with many of the interviewees feeling that the real estate cycle is at its peak. Consequently, labour, material and finance costs have become of higher importance compared to 2017.

In other topics, Brexit proved to have affected talent recruitment, as several big companies have plans to relocate to continental Europe. Investors seem ready to take more risks in order to achieve the same level of returns with 2017. The majority of respondents agreed that big data and “Space as a Service” will disrupt the traditional valuation model; while the changes in ways of working, mobility, and lifestyle will lead to more dense cities. Migration, a lack of affordable housing, and social inequality were also seen as key issues in the real estate industry.

As far as the annual city rankings are concerned, Berlin once again topped the list, while the wider dominance of the German cities was broken by Copenhagen, which claimed second place – jointly with Frankfurt. Interviewees seemed to be more upbeat about France than they have been for years. Van Doorn concluded the presentation by referencing the rank of Athens (which stayed almost the same as in 2017), citing its investment prospects over the last 10 years, before handling the speech to the panel.

During the panel discussion, panellists debated several topics relevant to the local industry, including the need for stable tax regime in order to attract foreign interest, whether there is appetite for alternative asset classes in the local market, and whether the hospitality sector can be the class that will lead the way for the entire real estate sector in the near future.  The Cypriot and Greek markets were compared, and it was pointed out that the latter needs to reinvent structural issues before moving forward efficiently in the long run. Hellinikon was used as a main example of current inefficiencies, in which although political determination is in place, there are numerous non-systemic factors that constantly delay this major urban regeneration project. Athens is quietly picking up: with prime office yields starting to move in slowly off the bottom, it is one of the few cities left in Europe where there are opportunities for yield compression. The sector which is attracting most interest in hospitality, since it is not so closely linked with the local economy. International arrivals have gone up for a third year in a row and the country has started being viewed as a safe European holiday destination.