Greece to halt Abu Dhabi-backed airport project

New Greek government has described the deal to sell off part of old airport site as 'scandalous'

An aerial view of the Hellenikon airport, Athens. Photo: Getty.
An aerial view of the Hellenikon airport, Athens. Photo: Getty.

A $1.2 billion deal backed by an Abu Dhabi investment firm to redevelop a prime seaside property looks likely to be scrapped after the new leftist Athens government announced it was looking to block agreements to privatise key Greek national assets agreed by the previous government.

Last November, Greek auditors unblocked the sale of a prime seaside property at the abandoned Athens airport of Hellenikon, which is being spearheaded by Greek firm Lamda Development and is backed by Chinese company Fosun and Abu Dhabi’s Al Maabar.

The auditors in September had blocked the sale of the property from privatisation agency Hellenic Republic Asset Development Fund (HRADF) set up by the previous Greek government.

Raising funds through privatisations was a major part of Greece's bailout agreement with the European Union and the International Monetary Fund. Athens had signed privatisation deals worth €5 billion ($6.2 billion) since 2011 and aimed to reach cumulative proceeds of €9.6 billion by the end of 2016.

However, on Wednesday, the newly elected government, which swept to power on an anti-austerity and anti-bailout agenda, said in an announcement it was sticking to plans to halt the sale of its two biggest ports, Piraeus and Thessaloniki.

Prime Minister Alexis Tsipras's new leftist government has sought to cancel key terms of Athens' bailout programme from international lenders, including what it calls the "crime" of selling off strategic national assets.


Energy Minister Panagiotis Lafazanis, who represents the more radical wing of the new government, also told Reuters the government would look to annul the Abu Dhabi-backed development plans for Hellenikon, calling the sale of the prime seaside property "scandalous".

"The statements of Mr. Lafazanis send a discouraging message to the long-term private international investors that our country desperately needs," Lamda Development said in a statement.

Lamda said it believed the sale was based on a legitimate process and the government should wait for a court of auditors to deliver its decision on the deal, which is expected later this year.

Last week, a spokesperson from Lamda contacted by Arabian Business refused to confirm the status of the deal.
Spokespeople from Al Maabar and HRADF did not respond when contacted by Arabian Business for comment.

Yannis Perrotis, managing director of Athens-based Atria Property Services SA, part of real estate consultant firm CBRE’s affiliate network, said it was too soon to tell what will happen to the project.

“I am not sure what will happen now. We are well positioned to provide support to anyone interested as we know the project very well… I think that the position is uncertain and that we should wait a bit before reaching any final conclusions,” Perrotis, who was also involved in negotiating deals in Greece on behalf of Qatar, told Arabian Business.

However, Nicholas Maclean, managing director of CBRE’s operations in the Middle East, said the new government’s policies were unlikely to put Gulf investors off investing in Greece.

“From a UAE slant, we have seen a consistent level of interest in Greece as an investment location, despite the rhetoric in the six month before the election. We expect the amount of private or HNW money targeting overseas stock (globally) to accelerate over the next few years as the portfolio allocations to real estate increase. Even the sovereign wealth funds continue to spend their allocations and as we have seen over the last few days, their appetite for large lot sizes does not seem to have been abated by the impact of hydro-carbons pricing,” he said.


Most popular


Deadline approaches for CW Oman Awards 2020 in Muscat
You have until 20 January to submit your nominations for the ninth edition of the


CW In Focus | Inside the Leaders in KSA Awards 2019 in Riyadh
Meet the winners in all 10 categories and learn more about Vision 2030 in this
CW In Focus | Leaders in Construction Summit UAE 2019
A roundup of Construction Week's annual summit that was held in Dubai this September

Latest Issue

Construction Week - Issue 765
Jun 29, 2020