Prodea wants a greener real estate portfolio in Athens, issues bond to get it

Green office building Athens
Prodea wants a greener real estate portfolio in Athens, issues bond to get it

Greece’s largest real estate investment company (REIC) Prodea launched the sale of a green bond on Wednesday in a bid to raise 300 million euros that will go towards investments in sustainable assets.

The bond sale comes ahead of a further move to boost capital expected by the company after summer as Prodea prepares for a rebound in Greece’s real estate market suffering from a severe shortage of prime assets.

The subscription period for the seven year bond winds up on Friday. The bond is expected to carry a coupon rate of between 2.2 percent to 2.6 percent, according to guidance provided by the company. The offer price of each bond has been determined at 1,000 euros.

Demand for green office space remains robust in Athens despite the uncertain economic conditions caused by the pandemic. The vast majority of office space in Athens consists of greying old buildings as the country's ten year economic crisis pulled the brake on construction activity, or upgrades being done on existing assets.

Market experts anticipate that more than 375,500 sq.m. of quality office space is under construction or has entered the Athens market recently with demand mostly driven by large companies seeking facilities close to the city's public transport network.

Figures from Arbitrage Real Estate and DCarbon show that most of the new offices are located in the center of Athens, Maroussi and Piraeus and will receive green certification.

Prodea, which also owns assets in Italy and Cyprus, is pushing ahead with a 400 million euro investment plan, targeting logistics, top-end residential homes and prime green office space. The company is weighing up its options as it prepares to raise funds after the summer to fund growth plans and broaden its shareholder base.

Prodea shares are listed on the Athens stock exchange but just about all the company (98 percent) is owned by investment fund Castlelake.

The Greek REIC has a portfolio valued at 2.1 billion euros, based on end 2020 figures. The figure stood at 1.8 billion euros about two years ago.

A large part of Prodea’s assets consist of branches and offices that belonged to National Bank of Greece (NBG) as it was previously a part of the banking group. Prodea's income from the NBG properties has since dropped to 42 percent of total revenues.