Athens bourse investors cool on hot property market; Briq plans rights issue

Athens bourse investors snub property market boom; Briq plans rights issue

Real estate investment company (REIC) Briq is moving ahead with a 50 million euro share capital hike next month but investors on the Athens bourse are cool on the sector, one of the Greek economy's hottest growth markets.

Briq, which belongs to IT group Infoquest, plans to use 40 million euros from the rights issue to boost its property portfolio that currently contains 16 real estate assets. The company has already signed new deals worth 14 million euros (which are subject to legal and technical checks) with more with expected to take place further down the track. The subscription period for the two-for-one share sale starts Thursday.

REICs in Greece are aggressively snapping up mostly commercial assets to take advantage of cheap property as the economy emerges from a ten-year crisis. This, however, has failed to inspire equity investors as gains in REICs on the Athens bourse trail behind the broader market.

The Athens bourse's benchmark general index has added 15 percent in the last six months, driven by gains in banks.

For the same period, stocks in the country's largest REIC, Prodea, have added 12 percent, while shares in Intercontinental International and Briq have advanced 14 percent and 6 percent respectively. Stocks on Trastor, majority-owned by US fund Varde Partners, inched ahead by 3 percent.

Analysts and real estate officials say that low liquidity and free float stocks in the sector are putting off equity investors despite strong potential in the sector and increased buyer appetite for office buildings, hotels, logistics, and retail stores. REICS in Greece are also struggling to draw large institutional investors due to their small size, analysts add.

This is creating an obstacle to foreign investors that want to gain exposure to the sector by owning shares in a real estate investor. Market experts highlight that the upcoming entry of two new players in the sector will help improve conditions.

Noval Property, that belongs to the Viohalco group, is scheduled to be listed on the Athens bourse as is Trade Estate, a subsidiary of the Fourlis group. These two companies will have a combined property portfolio size of between 550 to 600 million euros, helping add some depth to a shallow market. An expected uptick in profits shown by REICs due to tax cuts is also seen adding appeal to the sector, analysts add.


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