Ukrainian and energy freeze investments in hotels, offices, logistics

of Eleni Botas

Freezing of investments that had been launched in important sectors of real estate as well as in the “microscope” investment agreements that had been concluded without having been signed yet, brings to the real estate market the explosive increase of energy costs and geopolitical instability.

Speaking to Capital.gr A major developer of the Greek market described his strong concern about the explosive mixture of accuracy and insecurity from a possible escalation of the Russian-Ukrainian conflict, which has been created in the market.

He speaks of a brake on the implementation of any major investment move at this stage, since the conditions alone are not favorable.

As he characteristically states, “investment plans that had been launched for new hotel units and office complexes, as well as in retail and logistics areas, have gone back”.

In the same vein and what a high-ranking executive of the Real Estate Investment Company (AEEAP) reports, attributing the waiting attitude of major market developers and potential buyers, mainly to the increase in energy costs that has skyrocketed the prices of raw materials and then to instability due to the Russian invasion of Ukraine.

“The situation with the increase in raw materials is hopeless, as today we are talking about + 7% and tomorrow we can be + 10%. In the midst of such a climate, no investment can be made,” he said.

As a result, new investments in hotel units, residential complexes, offices, commercial parks and logistics are suspended until the landscape clears up and the market stabilizes.

Asked why these sectors of real estate, which until recently was one of the most mobile in the Greek real estate market, said that when you have a war that you do not know the consequences, neither tourism can predict, nor retail spaces you can build since The purchasing power of Greek consumers has decreased due to accuracy and therefore you can not build new warehouses.

But even investment deals that have been almost closed in recent months are under the microscope and are being re-examined without the possibility of postponing them for the distant future.

According to recent data, even before the start of the war in Ukraine, agreements and investments of more than 2.5 billion euros in the Greek real estate market were in the pipeline, while investments reaching 1 billion euros have been announced by Investment Companies. Real Estate (AEEAP), with their focus on logistics, office buildings, residential complexes and student housing.

As Georgios Kormas, Senior General Manager, Group Chief Real Estate of Piraeus Bank and CEO of Real Estate MAE, stated yesterday, speaking at the Prodexpo North conference, the investments that are in progress will not be affected. At least not much.

For those that have been launched by foreign Groups in our country, an important role will be played by the situation that the parent will have to face in the country of origin. “If there is a fire, you will send a helicopter to extinguish your main residence and not the holiday home,” said Mr. Kormas.

As he pointed out, the real estate market is affected during crises with a delay of 8 to 10 months. “If in the meantime the crisis calms down, we will avoid the effects on the real estate market,” said Mr. Kormas, emphasizing that Greece, which before the Russian invasion of Ukraine was a hot spot destination, in case the crisis continues for a long time, is not ruled out. to lose its advantage as countries will return to the forefront, with more mature markets than the Greek one.

Source: Capital

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