The leftist Greek government on Tuesday puts its signature on the biggest real estate project in Greece since the run-up to the 2004 Athens Olympic Games, and at the same time fulfilled what it hopes will be the last prior action before receiving a 7.5-billion-euro loan infusion from institutional lenders.
A memorandum of understanding was signed on Tuesday afternoon by Athens-based Lamda Development with the Greek state’s privatization fund (TAIPED), a development that propels the closely watched real estate development project at the coastal Helleniko site into a much higher orbit of realization.
The signing of the MoU was thrust onto the national limelight this week following a demand by Greece’s institutional creditors that the project’s commencement constitutes a “prior action” for the disbursement of the tranche, which totals over all of 2016 some 10.3 billion euros.
The MoU was signed by representatives of the state-run fund, Lamda Development and Hellenikon Global I. S.A. the holding company that will actually manage the urban regeneration project and the site when it materializes.
“Today’s agreement, which specifies all the basic design requirements and economic parameters of the Project is a milestone because it provides the opportunity to accelerate all procedures for commencing the project… that will become the largest urban regeneration throughout Europe for the coming years,” a Lamda press release read.
The company also reiterated its commitment to turn 42 percent of the massive tract of mostly arid lots and disused airport facilities into green space, a figure it gave as 2.6 million square meters.
“The investors undertake the financing and construction of all transport infrastructure, public facilities and utilities networks, all necessary port works, the creation of 50klm of sidewalks and bicycle paths which will create the necessary connection with the existing and the new rail networks, the underground routing of parts of (coastal) Posidonos Avenue, the renovation and operation of all listed buildings within the site, as well as the creation of a 1 kilometer beach with free-access to the public.”
“This is an important step towards the direction of investment, employment, exploitation of new opportunities and of attracting international capital in the country. The project will have multiple positive effects on other sectors and activities, it will create new expertise and a very large area will gain immense utility value for millions of Greek and foreign citizens,” was the joint statement issued by Lamda Development S.A. President Tassos Giannitsis and CEO Odisseas Athanasiou.
The total investment, according to the consortium, is around eight billion euros, with the project “front-loaded”, the company executives promised.
That means a faster timetable for completion and up to 80 percent of the investment sunk into the project within 12 years instead of the previously cited 15 years.
The initial sale price of 915 million euros, set in 2014, will be transferred as soon as possible, while the concessionaire assumes the maintenance, upkeep and security of the metropolitan green spaces.
Total building space on the entire site will be 2.7 million square meters, although the maximum legal limit is 3.6 million square meters. That figure includes current buildings totaling 60,000 square meters, considered as historically or architecturally significant: three hangars and the old Athens airport’s east terminal.
