Special feature: Greece

Interview with Mr Elias Athanasiou, CEO of Enterprise Greece

March, 2018

Last month Greece’s Prime Minister, Mr Tsiparas, at the inauguration of the International Fair in Thessaloniki mentioned that Greece has turned the page, “Leaving Grexit and heading to Grinvest”, in fact quoting a French investor who joined Mr. Macron in his recent visit recent visit. How would you describe the evolution of the international business community’s perception of Greece as a lucrative investment destination?

Mr. Athanasiou: We have seen, over the past year, an increasingly positive momentum for Greece, including the way in which investors perceive our country. Following the previous bailout evaluation, the economy seems to have stabilized and the trend is now moving in a positive direction. We have recently seen a very strong interest from investors. In the past, a significant amount of interest came from the East, from countries such as China and Russia. Although we were not short of interest from the West, the momentum has certainly been growing and we have seen a number of important investments.

Most recently was the US fund Calamos-EXIN which purchased National Bank’s insurance company, Ethniki Insurance. CVC Capital Partners has made two acquisitions including the Metropolitan Hospital which is now the IASO General Hospital. Both deals were therefore completed by major US private equity funds. Additionally, the US real estate giant, Hines, has purchased the Athens Ledra Hotel, which used to be a Marriott. This has all happened this year, hence, there is real interest. Furthermore, there are large American casinos expressing a strong interest to acquire licenses for an investment that will exceed €1 billion, in the Hellenikon project. When this project is completed it will be the only integrated resort casino in all of Europe since, currently, most casinos are hotels but not resorts. The project will be built as part of the multi-billion euro real estate development project at the old airport grounds, Hellenikon – it will be beautiful there.

Once it is launched, the Hellenikon project will be the biggest real estate development project in Europe. Do you see positive steps being taken towards finally launching this project?

Mr. Athanasiou: Projects of this magnitude are not easy to launch. Even in countries like the US, for example, similar projects also take a considerable amount of time. Nevertheless, we are approaching the end. It is beyond our control now but, regardless, it is important to know that there is international interest in this project.

Last year, Greece brought in a total of 13 FDI projects, four of which came from UK investors. Share with the readers of The Times some of the success stories here in Greece involving UK investors?

Mr. Athanasiou: The line between the US and the UK is very thin as some US investors are in fact carrying out many investments out of their London offices. It is quite common as London is the financial capital of this side of the world. The Americans might be the origin in some of the deals being made, however most of the clients and investors we meet at Enterprise Greece are from the UK. We have certainly seen investments in real estate. M&G, the investment arm of Prudential Plc in the UK and Europe, have taken part in a number of important investments on the real estate front. Real Estate Investment Companies (REICs) are the vehicle to invest in the real estate market in Greece. They have made initial investments of approximately €50 million, just a startup before proceeding to other bigger investments. These are strictly UK investors.

Regarding the investments that bought out the Marriott Hotel, the expected annual ROI over four or five years is 20%, whereas the average is usually 7%, 8% or 9%, at the highest. Therefore, there are brilliant opportunities here in Greece. The people have understood that we have to lean towards being a more extraverted economy, not one based on internal consumption. Public investments should go towards attracting FDI and promoting exports. The private sector has understood this well and the Government to a lesser extent, but now everyone is pointing in the same direction..

One of the other exciting aspects, is the importance of connecting Greece with a robust network of intermodal transport – an efficient railway system plays a huge part of this. To make this beneficial, you need the creation of these logistics hubs. Can you share with us more about the rail-connectivity to these logistics hubs?

Mr Christos Dionelis: Thriasso-Pedio is very impressive. It is a very big project that has recently been finished. It is a huge railway freight village. It connects Iconio in the Port of Piraeus, within the private section that belongs to COSCO. The idea is to take all the containers from Piraeus to move it to Central and Northern Europe. Currently, most of the movement of containers are with trucks – this isn’t as beneficial as railways. Railway systems are cheaper, more environmentally-friendly, more energy efficient, all-in-all it is better than truck transport. This project is almost ready to start. We built it and we are still acting as consultants in order to yield clear guidelines on how this complex must be operated. A recent decision by the EU speaks about the necessity of investing heavily into railways.

The EU itself invested €300 million into this complex. They want to see it in operation. Now, we must just decide on a private-sector operator. There are options for tenders which will be launched by March of 2018. We assisted in drafting the tender through studies that we conducted. This will be a huge project and we need the best private sector operator to win the tender. With the project now completed, there will be a dedicated railway line connecting the Thriasso-Iconio (28:50) section and the port. This brand-new line will be run by an operator. For us, it is very important to have a good operator winning the tender to run this line.

It was recently pointed out by the team of economists at the National Bank of Greece that investment in the country needs to grow by at least 8% for there to be any real effect on the rate of unemployment. With other segments of the economy moving ahead, like tourism, industrial output and consumption, it seems that investment seems to be lagging. Tell us more about the type of new, fresh measures that you are spearheading at Enterprise Greece to give investments the boost that it needs?

Mr. Athanasiou: During my previous professional experience with a big Greek multinational company I used to work in mergers and acquisitions. What I saw before was that Greece has some “off-the-shelf” products that can easily be promoted with very clear guidelines, so that investors have all the information they need in order to make their decisions. Enterprise Greece is also responsible for fast-track project which are strategic investments of a particular size in terms of investment and employment. Until now, we have approved €3.5 billion of such investments and we have another €3.8 billion in the pipeline, which continues to grow each month that passes.

We are trying to transfer this model to other industries as well. For example most of the fast-track activity had to do with licensing and uses of land which is of course most relevant to the real estate and tourism sectors. We have decided to open up the ICT sector as well, as these companies also need licenses and need infrastructure to set up their companies and servers. as they also need licenses for their infrastructure. We have one project that we are carrying out with Vodafone, and now OTE has approached us as well with interest. Hence, the momentum is growing. Regarding the fast-track evaluation, the law currently states that in order to be eligible, one has to own the land. Nevertheless, a number of municipalities do not want to sell the land, they lease it for 30 or 40 years. Therefore, since the law does not cover the leasing of sites, if someone approaches us with a very big, fast-tract project we have to tell them they are not eligible. We are pressing to have this law reviewed and amended in parliament as we currently have 4 fast-track projects which are on hold and waiting for the new law. Thus, we are trying to create a critical mass before going to the Ministry and presenting our case to continue pressing for this.

Until recently, we had only taken a partial stance vis-à-vis the fast-track. Now, we are actively pursuing investors and working with the municipalities in order to mature the projects, clear all the red tape and approach investors stating that everything is ready, now we just need for you to put down the money and you can start constructing the next day. This is another reason why we want to change the law. We have a very significant project that needs three or four months in order to mature so we are using it as a pilot project. This municipality is a very important destination and in fact can be considered international. Additionally, we have here a big portfolio of private projects consisting of private companies that are looking for €2 million or €3 million as an investment for growth capital or greenfield investments. We have five hundred-odd projects ranging from €2-€3 million up to hundreds of millions and our job is to be the match-makers.

A number of companies do not have the expertise to deal with these investors. If we refer to strategic investors, the work is easy since they have the resources to carry out the proper due diligence and understand now to carry out the merger or acquisition. However, smaller investors might not have this expertise, so this is where we come in. We are developing our internal resources to be able to provide this kind of advisory services and support for smaller investments. Therefore, our objective is to bring this project to the next level and see if it works. We are now also in a pilot test phase and then roll it out on a larger scale.

This will include employing external advisers, since we have the know-how but not the capacity to take on big projects yet. I have learnt, also, that many people do not know our organization, including the Greeks. I have therefore, also made it one of my priorities to promote the corporate image of Enterprise Greece locally. We have just created a new, fresh logo and are currently working on our website.

On behalf of Enterprise Greece, this is your opportunity to share a powerful message with the business and investor community of the UK.

Mr. Athanasiou: Greece is currently an attractive investment destination across various sectors of the economy. That said, I would like to invite British investors to our country to get to know our organization, Enterprise Greece, so that we can help guide them through any investment or business-related deals they wish to make here. Above all, we are an investor-friendly platform that, not only has access to state resources and infrastructure but, also includes a team of 70 highly educated employees who wish to do business on either the investment or trade front.