Ellinikon project exposed to liquidity risk, draws non-diverse investors
The eight billion euro Ellinikon urban development project being built in Athens is subject to liquidity risk and has failed to draw global investors despite the size of the investment, says Cerved Property Services.
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In a monthly market report, Cerved points out that the project is boosting demand for real estate in southern Athens were prices are among the highest in Greece in a strong trend seen continuing this year.
“The southern suburbs are the most sought after area of Metropolitan Athens. Properties in the area have seen significant increases in values compared to 2015 and even pre-crisis levels,” points out the report.
According to the Cerved Property Service Index (CPS Index), residential property prices in the southern suburbs of Athens are the second highest in Greece after Cyclades. The southern suburbs residential market, has reached 2012Q4 levels, revealing the high cumulative decline during the crisis years and the subsequent growth potential.
The CPS network of experts predicted a surplus of demand for 2022 in the southern suburbs of Athens, added the report.
This increased buying interest can be attributed to the expected development of Ellinikon and other projects as well as the area’s proximity to the sea, which historically attracted local and foreign high income buyers. Finally, the CPS network of experts stated that apartments and newly built properties show the highest demand levels.
Despite the shine being added by Ellinikon to southern Athens, the project is facing its own challenges. Cerved adds that:
• The project is heavily based on loans by Greek banks, leaving it exposed to a possible lack of liquidity.
• At the current stage, most of the developers involved are Greek companies, leading to a non-diversified investors background.
• Many infrastructure projects are required for the operation of Ellinikon that may exceed the expected budget.
• The project is a significant and long-term development that faced multiple obstacles over the past 15 years.
• Extra traffic load will be added to the surrounding areas, as seen by the opening of the Experience Park.