The plan of Piraeus Bank for its real estate

By Leonidas Stergiou

The real estate development plan of Piraeus Bank is in full swing, which is based on real estate sales and rents. The development of real estate includes two simultaneous movements:

First, sale and depreciation of real estate owned by Piraeus Bank.

Second, doubling inventory and rents from Trastor’s subsidiary.

Today, the Group’s real estate portfolio is valued at 3.2 billion euros. Of these, 2.1 billion euros belong to Piraeus Bank, 0.8 billion euros have been transferred to Project Terra for sale, while 0.3 billion belong to Trastor.

Sale of real estate

Piraeus Bank will reduce its real estate stock by 2025 to 1.6 billion euros (from 2.1 billion today). The reduction will be made by selling real estate and transferring others to Trastor, which will double the value of its portfolio from 0.3 billion today to 0.6 billion in 2025.

Thus, in 2025, the total value of the Group’s real estate portfolio will amount to 2.2 billion euros from 3.2 billion today. These transactions result in revenues of 1 billion euros from real estate sales, without taking into account rental income. At the same time, the stock of 2.2 billion euros in 2025 will include a smaller number of properties than today, due to rising prices. Piraeus forecasts an annual price increase of 6%.

In terms of the number of properties, today the Group numbers about 10,000 properties of small and large value, while Project Terra includes about 2,500 properties (out of 10,000), worth 800 million euros, which it will sell.

Real estate income

At the same time, rental income is expected. Today, the Group’s rental income amounts to approximately 50 million euros, of which 18 million euros from Trastor. The increase in Trastor’s real estate portfolio and the rental return estimated at 5.6% will lead to a more than doubling of rental income, to the amount of 40 billion euros.

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Transfer to Elliniko

Finally, significant revenues will arise, according to the business plan of Piraeus from the transfer of offices from Athens to a single space in Elliniko in 2025. The Group proceeds to the transfer of offices from 18 different buildings in Attica (70 acres) to a modern space in Elliniko (Ellinikon Campus) of 40 acres. The value of the new space amounts to 3,670 euros per sq.m. and is lower than the current values ​​of the regions, according to the Bank’s presentation, with the prospect of a significant increase. The total investment is to be amortized in 60-70 years with an annual profit of over 10 million euros.

One step before the agreement with Piraeus is the expansion of Attica

Source: Capital

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