Greece Revises Hellinikon Airport Property Deal

June 7, 2016

Greece has revised terms for the sale and long-term lease of the old Athens airport of Hellinikon, meeting the demands of international lenders who are now expected to unlock withheld bailout funds.

Greece clinched a EUR€915 million (USD$1 billion) deal for the site of the disused airport, which sits on prime beachfront land, in 2014. Under its terms, a consortium led by Lamda Development, a Greek developer, would own part of the Hellinikon property and get a 99-year lease to develop all of it.

But divisions among local communities and technical hurdles delayed the sale. A mass influx of migrants since the beginning of last year has also impeded efforts to conclude the accord.

Greece's privatisation agency HRADF and Lamda on Tuesday signed a memorandum of understanding which revises terms of the deal, they said in separate statements.

"By signing this new agreement for Hellinikon, the implementation of an investment which will leave its mark on the development of this country has taken its course," privatisation agency chief Stergios Pitsiorlas said in its statement.

"A substantive improvement to the prior contract resolves problems which formed the basis of objections in the past."

FRONT-LOADED INVESTMENT

The initial deal called for the consortium to pay the EUR€915 million sum in instalments by 2022 and spend about EUR€6 billion to turn the 620 hectare seafront complex into a seaside town of hotels, residences and shops.

HRADF said that almost half of the sum will be now paid by 2018 and total investment will be about EUR€8 billion, with most of it expected to be concluded in 12 years, rather than 15 years under the initial deal.

Lamda said the project would create 70,000 jobs and boost Greek economic output by 2 percent, bringing in revenues of EUR€10 billion for the Greek state in 25 years.

"It's a serious step in terms of investment, employment, tapping new opportunities and attracting foreign funds in our country," Lamda Development chief executive Odysseas Athanassiou said in a statement.

The Lamda-led consortium includes the Chinese diversified group Fosun, the Abu Dhabi-based real estate firm Al Maabar and other investors.

(Reuters)