The Hellenic Republic Asset Development Fund (HRADF) has signed a deal selling off a portfolio of 14 state-owned properties to Eurobank Properties, according to a press release issued yesterday (in Greek) by the company. In the same release the company stated that it had also signed leasing agreements with the Greek state for the next twenty years
The buildings have a total area of 189,000 square meters and include the following:
- A building housing offices of the Ministry of Education in Marousi
- A building housing offices of the Ministry of Health in Marousi
- A building housing offices of the Ministry of Justice in Goudi
- The General Attica Police Headquarters in Mesogeion
The total amount paid for the properties comes to 145.81 million euros. The law requires that all funds deriving from the sale of state assets by the HRADF must go towards paying off Greece’s debt and not to government coffers.
Meanwhile according to Eurobank the 20-year leasing agreements will generate revenue for the bank of 14.05 million euros per year.
In short while the sale will immediately pay down 145 million euros worth of debt, the government will now have to budget an additional 14 million euros a year to rent buildings it once owned. Within ten years Eurobank will have recouped its initial investment and by the time the lease expires it will have doubled its money. And it probably does not need to worry about finding new tenants when the contracts expire given that it is unlikely, for example, that the Greek police will be changing headquarters anytime soon.
It just goes to show that there are great business opportunities in Greece these days. If, that is, you happen to be a bank that has been recapitalized by the taxpayers and re-privatized at their loss.