CBRE’s report, earlier this year, that Greece has moved up into the top five destinations for hotel investors in Europe, was the latest confirmation that the country has shaken off the spectre of the past to become an investment powerhouse.
In the investment intentions research, capital city Athens also nudged into the top ten preferred cities in the region, another sign of both the country’s hospitality credentials but also its liquidity and growing transparency.
Less than 10 years ago, Greece defaulted on a debt of €1.6 billion owed to the International Monetary Fund, with experts blaming everything from its accession to the Eurozone to policies of ignoring tax evasion which left the country’s coffers empty. A decade on, Greece is one of the region’s fastest growing economies with a reputation for embracing ambitious real estate development and an appetite for tech, innovation and green energy investments.
In the hospitality stakes, tourism’s love affair with Greece is nothing new. The country’s unique archipelago, its food, beaches and climate have long been popular with international travellers. What has improved, though, is the country’s reputation as a place to do business, plus the depth and liquidity of its hotel capital markets.
Mega deals
In the last 12 months alone, a slate of mega deals has focused on the southern European state. In October 2023, Singaporean sovereign wealth fund GIC pounced on a 35 per cent stake in Hotel Investment Partners (HIP) from the Blackstone Group. HIP, founded in 2015 by Alejandro Hernández-Puértolas and Banco Sabadell and acquired by Blackstone in 2017, has built a portfolio of around 22,000 rooms across Spain, Greece, Italy and Portugal.
At the start of 2024, Miami-headquartered HIG Capital announced that several of its affiliates had combined their Greek hotel assets to create a €1 billon hotel platform called Ella Hotels & Resorts. Following a phased development and refurbishment plan, Ella’s portfolio will comprise some 13 hotels with 4,500 keys, located in five of Greece’s major tourist destinations. The business also plans to expand into Spain, Portugal, and Italy, targeting a total of10,000 keys.
Riccardo Dallolio, managing director and head of HIG Realty in Europe, said at the time: “In addition to the strong recovery in global travel, the recent upgrade of Greece’s main peripheral airports allowed for an even stronger recovery in their resorts market.”
HIG isn’t the only investor to have noticed Greece’s strong fundamentals. In recent weeks, Premia Properties pounced on Nordic Leisure Travel Group’s (NLTG) Greek hotel portfolio for €112 million, with NLTG set to continue operating the hotels under 15-year, triple-net agreements. The portfolio comprises two 4-star resorts, Sunwing Kallithea Beach in Rhodes with 534 keys, and Sunwing Makrigialos & Ocean Beach Club in Crete with 262 rooms.
Says Magnus Wikner CEO of NLTG: “I am happy that we have entered this strategic partnership with Premia Properties as it will make it possible for us to explore and develop new concept hotels in Greece for the benefit of our Nordic guests. Greece is our biggest destination country for the summer season, and we see especially strong demand for our own hotel concepts to Greece.”
Development drives
Despite the macroeconomic headwinds that have affected real estate development drives across Europe, data from Travelworks suggests that around 60 hotels will be built in Greece over the next four years, with some 40 per cent set to be flagged by international brands.
London-based real asset merchant bank CBE Capital has teamed up with Golden Land Goutos Taconic Capital Advisors and Cedar Capital Partners to develop a new Six Senses hotel and branded residences in Porto Heli, Greece. The project will cost a total of €150 million, including the purchase of additional, adjacent land. Situated on two private bays in Ermioni with views of Spetses and Hydra islands, the resort will comprise 60 hotel suites and 12 luxury branded residences on its launch in 2026. To drive forward the project, CBE has secured a €95 million senior loan from Piraeus Bank in Athens. Geza Toth-Feher, managing partner of CBE Capital, notes that “our Greek debt transaction bucks a trend in the Eurozone and the US. It shows that high quality transactions, despite difficult market conditions, can still be financed”.
Other expanding operators in the region include global giant Wyndham Hotels & Resorts. In Greece, Wyndham currently partners with 14 hotels, including three in Athens, two in Loutraki, and one hotel each in Vravrona, Nea Makri, Thessaloniki, Halkidiki, Alexandroupoli, Corfu, Rhodes, and Crete. Wyndham also flags a hotel in Cyprus. The operator’s strategy for the country includes increasing its visibility in both well-known and undiscovered Greek destinations, integrating existing properties with modifications into the group’s soft brands, such as Trademark Collection by Wyndham and Registry Collection Hotels, and entering the branded residences market. Vassilis Themelidis, regional director for South and East Europe, says: “The messages we are receiving from Greece are particularly encouraging, and we have a keen interest in new additions to Wyndham Hotels & Resorts’ portfolio.”
Athens ambitions
The Greek capital, too, will see considerable hospitality development, not least as part of the massive The Ellinikon project, an $8 billion smart city taking shape along the Athens coast in two tranches over the next decade. The largest urban regeneration project in Greece and one of the largest in Europe, the scheme is rising on a former airport plot, with ambitions to deliver over 10,000 homes, offices, retail and hotels in a sustainable key. Two years ago, Lamda Development raised €230 million through a green bond listed on the Athens Stock Exchange backed by the European Bank for Reconstruction and Development (EBRD) to bankroll the project’s green buildings and infrastructure, green energy plants and smart city technologies. Notably, the Ellinikon project continues to progress while maintaining zero bank borrowing, largely thanks to the judicious sale of permitted land parcels within it to select parties. Lamda says that the financial sustainability of the scheme “represents a unique case at an international level among similar developments”.
Within The Ellinikon, Mandarin Oriental will develop its second hotel in Greece on the coastal front of The Ellinikon Metropolitan Park, plus 17 luxury branded residences, targeting completion in the summer of 2027. The 5-star hotel will include 123 rooms and suites with direct access to the sea. The properties are being developed by BELT Riviera, a company established by Temes and Hellinikon, a subsidiary of Lamda Development.
Hard Rock International and the Gek Terna Group have also broken ground on the Hard Rock Hotel & Casino Athens within The Ellinikon. The €1.5 billion investment will combine a 5-star hotel with sea views, a casino, exhibition and conference centre, and a 3000-seat entertainment venue for live acts. Representing the first Hard Rock integrated resort of its kind in continental Europe, it is expected to serve as an economic driver for entertainment and tourism in the city. Expected to open in 2027, the casino will comprise 180 tables and 1,500 gaming machines, while the hotel tower will feature 1,100 guest rooms and 15 dining options.