When governments announce that the sale of assets, they usually mean industries and companies owned and operated by the state. Greece has something slightly different in mind.
According to Bloomberg, Greece is preparing to sell its ownership stake in Astir Palace, described by the news agency as an "Athenian Riviera resort." The resort includes almost 3 million square feet of beachfront property where guests can experience "the city and the seaside," according to its website. Aristotelis Karytinos, the general manager of real estate for the National Bank of Greece, called Astir Palace a "trophy asset."
Such sales have become a normal fact of life for the debt-ridden Mediterranean country.
The Greek government, in the midst of a major fiscal crisis, is unable to pay its bills. Roughly $228 billion in bailout loans have been provided to the country, and by the year 2020, Greece must raise 50 billion euro to meet its obligations to the European Union. According to Bloomberg, it has only raised 1.8 billion euro.
In the last year, Greece's 10-year bond yield has been anywhere between 14.5 percent and 30 percent (hovering closer to 30), making it extremely difficult for the Greek government to borrow more money.
It seems the only thing left to do -- other than default on its obligations or receive some massive international debt forgiveness package -- is to sell "the family silver," as Daily Forex put it.
According to the official website for the Hellenic Republic Asset Development Fund, the official body set to help privatize Greek holdings, real estate sales go beyond luxury island resorts. The Fund is searching for investors willing to buy some of the government's holdings in the Athens International Airport as well. It is also looking for potential partners in 28 government properties, including the headquarters for the Ministries of Justice, Health, Education, Internal Affairs and the Athens Police Headquarters. These assets, the Fund states, will be "structured as a private sector operating lease, encompassing full privatization of the portfolio."
The Fund's portfolio also includes the yet-to-be-completed Helenic Motorways, the Egnatia Odos Motorway, various national ports and four Airbus 300-340 jets.
Yet despite Greece's best efforts, some analysts don't think the properties -- even those as luxurious as Astir Palace -- will sell. “On the downside," Prestige Property Group broker Mike Braunholtz told Bloomberg, "the whole world has its eyes on Greece and it would be considered a very risky environment to invest in until there is more clarity whether you’d be buying in euros, dollars or drachma.”
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