Thursday, March 31, 2011
Greece May Need to Break Taboo on Selling Land to Slash Debt
March 31, 2011
Greece’s plan to raise billions of euros from state-owned land may fail if the government succumbs to pressure to keep assets in public hands, according to Miltos Kambourides, managing partner at Dolphin Capital Partners.
Finance Minister George Papaconstantinou said in an interview this month that he would prefer to offer developers long-term leases, though he’d consider selling smaller assets outright. On March 23, the government said it will give details of the fundraising plan “in the coming weeks.”
“No foreign investors will want to buy a lease and be told what they should develop on the site,” said Kambourides, 38, who helped set up his private equity firm seven years ago. Dolphin, registered in the British Virgin Islands and listed on the London Stock Exchange’s AIM, is developing seven luxury resorts in Greece with a total investment budget of 2 billion euros ($2.8 billion).
Papaconstantinou aims to generate 50 billion euros from state asset sales and property transactions by 2015 to reduce Greece’s public debt, the highest in the European Union as a percentage of gross domestic product. Until now, its governments have shied away from real-estate divestments to avoid criticism from voters.
Posted by Yulie Foka-Kavalieraki at 2:52 PM