Piraeus Bank to invest 24 mln euros in real estate arm

Piraeus Bank to invest 24 mln euros in real estate arm

Greece's Trastor real estate investment company (REIC) plans to raise up to 24 million euros in a bond issue that will be bought be key shareholder Piraeus Bank.

A general assembly on Friday decided on the five year bond to be issued by Trastor, 40 percent owned Piraeus Bank.

The money will go towards funding growth plans as Trastor tries to keep up with aggressive expansion plans being executed by REICs in Greece right now. Bargain prices in the sector, brought on by the country's eight year economic crisis, have prompted a buying spree among real estate investment companies that are mostly backed by foreign funds. US investment fund Varde Partners controls a majority stake in Trastor.

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A credit squeeze imposed by Greek banks, however, is hampering these expansion plans, forcing investors to turn elsewhere for finances with mixed success.

A number of Greek REICS are considering issuing new bonds on capital markets, officials in the sector say, but keep putting off plans amidst volatility in global markets.

Greece's largest REIC pulled the plug in May on the biggest bond issue to take place in the sector worth 400 million euros "due to volatile and adverse market conditions."