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Greek privatization program offers 'returns of 15% or more' for investors

Greece needs privatizations to restore confidence: CEO
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Greece needs privatizations to restore confidence: CEO

The privatization of Greek assets offer some serious investment opportunities, according to the CEO of Lamda Development, which specializes in Greek real estate, who told CNBC that foreign investors just need more confidence.

"I believe that the Greek government has understood that the creation of jobs is the number one factor, not only for the economy to work but for the psychology (towards Greece) to turn around. In order for job creation to happen, you have to believe in investments," Lamda Development's Odysseas Athanasiou told CNBC in Athens on Thursday.

"The prime indicator of this shift in the economy and growth will be the attraction of investment capital and the building of confidence for foreign investors to invest in Greece, this is the prime gap," he added.

Athanasiou stressed that the "prime thing" was for Greece to become "more extrovert" in its relationship with investors.

"(This is) how we build confidence and restore the country's credibility – this can come through privatizations but also through making people believe that we walk the talk," he said.

Greece is currently struggling to reach growth targets and reform milestones that are demanded by its creditors as part of a third, 86-billion-euro ($96-billion) bailout agreed by the Socialist Syriza-led government last summer.


The Hellinikon project.
Lamda Development

The bailout program demanded that Greece make further cuts to public spending, overhaul its pensions, labor market and taxation system and implement a privatization program of Greek assets, such as its airports and ports.

Any initial government reluctance to privatize public assets seems to have dissipated, not least because Greece has such a steep hill to climb to get its debt-ridden economy back on track.

Athanasiou said the country offered investment opportunities and that progress was being made in terms of the government's privatization program.

"We believe that (returns of) 15 percent and above can be achieved and we're talking risk-weighted returns, not just absolute returns," he said.

"We had the privatization of 14 local airports, we've had the privatization of the Port of Piraeus and lately we've had the parliament ratify the Hellinikon airport (development), so now we have to show that we believe in these privatizations and we make them happen."

Lamda Development is currently managing the development of the former Hellinikon airport in southern Athens. It will include commercial outlets, residential developments, offices, recreational space and hotel facilities, as well as a casino and marina. Lamda Developments hopes the project will contribute billions of euros to the Greek economy and attract a million tourists a year.

It is also expected to provide a significant employment boost, according to Athanasiou, who said 10,000 roles would be created initially, with that number rising to 70,000 within the first 5-7 years of the development.

Investment in the project is coming from an international consortium of investors including the Chinese conglomerate Fosun Group, Eagle Hills from Abu Dhabi and Greece's Latsis Group. Athanasiou said he believed the project was a "game changer" for Greece.

"This is not just a project, it's a game changer, it's one of the biggest urban regeneration projects in Europe and the world. It's not just a resort, it includes everything from infrastructure such as energy, waste management and water management and we're talking about the biggest coastal park in the world," he told CNBC.

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