28 May A dynamic and modern real estate enterprise for public-sector assets
Stefanos Vlastos, CEO, Hellenic Public Properties Company (HPPC—ETAD), unveils a new international, market-oriented business plan for real estate
Hellenic Public Properties Company (HPPC—ETAD) is a subsidiary of the Hellenic Corporation of Assets and Participations. It is responsible for managing and exploiting the state’s vast and diverse portfolio of real estate assets through investment, rental or sale. You joined ETAD at the end of 2019 in a period of new economic renaissance for Greece and confidence in the future. How have your priorities changed because of this global crisis? And how have you used this time to tackle certain issues that otherwise would not have been brought to the forefront?
I embarked upon the management of ETAD when the Greek economy had been stabilized, and market confidence and international trust were gradually being restored. The good thing to come out of the crisis is the fact that we were able to further enhance international trust and credibility toward Greece. We managed to stay ahead of pandemic—in contrast to many other countries, even ones with much stronger economies than Greece.
In terms of our real estate assets, we are a company that had not only decided to gradually transform its operations from those of a public company into those of a private sector company, but we also felt the impact of COVID-19 because we had heavily invested in tourism industry assets in previous years. As a result, at this point of time, our investments in tourism industry assets are at more than 80 percent of our total portfolio. So, you can understand why this is a major crisis for us.
However, this has made us understand the need to reposition ourselves. We have developed a new business plan and our strategic priority is to divert our focus from tourism assets to telecoms, logistics, marinas, energy and office real estate assets—areas where we haven’t invested so much in the past.
How else is ETAD evolving in order to perform optimally in the post-pandemic real estate market?
First of all, before the crisis we were in the process of dealing with red-tape problems within the government and also within our company. Due to the crisis, we are now tackling these issues at a much faster pace. We are heavily investing—both as a government and a company—in the IT sector and are shifting our focus to that area while the crisis develops.
In addition, we are focused on maturing as many of our real estate assets as possible as fast as possible. However, we are not going to put all our effort in maturing just any asset. Instead, we will target our commercial assets in various regions of the country based on what the market wants. The market will drive our needs, changing our shift from the pre-crisis to the post-crisis environment and its market-driven solutions.
What can you tell us about ETAD’s strategies to maximize domestic and international investments in real estate?
Our strategy is transparent and clear. We are going to invest in the IT sector as we intend not only to mature our assets but, most importantly, to increase their commercial value. To achieve this, we are using digital services and solutions such as our e-auction platform. To date, our assets have been driven mainly by local markets. However, our long-term objective is to expand our scope and make these assets available to as many actors as possible in both local and foreign markets, and to promote our rich and diversified portfolio as widely as possible by making it attractive to potential investors from across different markets.
Our vision is to transform ETAD into a dynamic and modern real estate and management enterprise for all Greek public actors, assets and agencies in the country. Therefore, our goal is to minimize the red-tape issues of the past, and infuse the company and its people with an international and a market-oriented approach that will support the pro-investment strategy of the Greek government and its current efforts to revive the economy in the post COVID-19 era.
In what areas are opportunities to be found within the state’s real estate portfolio?
We have decided to direct our strategy not based on where we have assets, but on where we have demand. In this regard, we look at Greece as a whole by adopting a bottom-up strategy and prioritizing areas of high-commercial interest, such as Crete, Rhodes, Corfu, Mykonos, Santorini, Cephalonia, the Athenian Riviera, the ancient area of Plaka in Athens, Thessaloniki and the northern part of Greece. Besides being location focused, we have decided to be market driven. That is why we are going to put emphasis on logistics, energy, telecoms and marinas and will blend these two different strategies.
What are your views on investing in real estate assets that embrace innovation?
Innovation has to be incorporated in our portfolio. However, our priority is to invest in sectors we are currently lacking as a firm. Therefore, as a company, we are going to invest more on the basics in terms of information technology and less on innovation—because we have a number of issues that we need to bridge in order to mature our assets and increase their commercial value. We intend to capture the benefits of Greece’s restructuring of its non-performing bank loans market, and use the financial and bank-related knowledge gained during the years of Greece’s financial crisis in order to invest in the technology sector.
How do you think Greece’s successful management of coronavirus will affect the country’s macroeconomic position, which had been experiencing very positive trends prior to the pandemic’s emergence?
We all understand that the reopening of the economy will take place gradually and that overall business activity will be majorly affected in 2020. According to Greece’s Ministry of Finance, our economy is expected to contract somewhere between 7 and 8 percent this year. However, we are optimistic that we will be able to get back on our feet sooner than other countries. Firstly, as a result of the government’s performance last year toward restoring international credibility and the trust of investors and, secondly, given how quickly Greece responded to the development of this pandemic, demonstrating strong leadership, effective governance and solidarity. The government empowered the Greek people without imposing its decisions.
We have managed to successfully flatten the curve in the best way possible compared to other EU countries. And this is now a major advantage for us—Greece is no longer the scapegoat of Europe, but a trustworthy country and a good case study for dealing with this crisis as a nation, which some people might not have expected before the crisis. We are now slowly easing our lockdown measures and have managed to make sure that our friends and partners abroad are able to visit the country, always according to specific guidelines and safety rules. By removing restrictions sooner than others, Greece is able to work faster toward supporting its businesses and households, placing the economy back on track, continuing its reforms and its long-term pro-investment strategy.
I think if we take a step back and look at the global environment, everything depends on whether we are going to react from a national standpoint or if are we going to react through solidarity and cooperation. That is especially true for Europe and where we decide to stand as European Union (EU) member states.
In my opinion, this is the right moment for Europe to express its solidarity by putting aside any populist agendas and prioritizing the collective efforts of its member states and European societies as a whole. I believe that both political wisdom and international solidarity are needed, while maintaining the moral fabric of our societies at the same time. The right balance should be struck between these two paths. Additionally, humanity needs to accept that scientific knowledge is the major driver of this pandemic and that scientists are the players at the forefront of tackling the crisis. We all need to take a step back and agree that we must re-establish ourselves and change our views on how we see the way forward.