The Hellenic Republic’s Asset Development Fund (TAIPED) has announced the tender of a 257,000 m2 seafront plot of land at Aghios Ioannis in the Sithonia Peninsula of Chalkidiki in Greece.
This is a beachfront land plot with the following specifications:
257,000 m2 total plot area, of which 200,000 m2 is exploitable
2,000 m waterfront exposure, including 800 m of sandy beach
20% building co-efficient, or 40,000 m2 can be constructed
The Aghios Ioannis plot in Sithonia is well-suited for an integrated tourism resort under Greek law. An integrated tourism resort is one which includes a hotel and/or alternative residential units (e.g. villas, bungalows), sports facilities (e.g. tennis courts, squash courts, etc.), a spa and/or health club, etc. Integrated tourism resorts have important tax benefits.
The size of this tourism investment also means it qualifies for simplified licensing procedures under Greece’s Fast Track investment promotion law. The Sithonia Peninsula in Greece is an excellent location for incoming tourism:
It is located between Mount Athos, which is classified as UNESCO as a World Cultural Heritage Site, and the Kassandra Peninsula, which is the most developed resort in northern GreeceIt is a 50 minute drive from Thessaloniki International Airport (90 km), or a 15 minute helicopter transfer
It is ideally suited for tour operation and accommodation for the Russian market, given the existing popularity of this region, and the attraction of Mount Athos.
The Chalkidiki region has over 540 hotels with 23,750 rooms (45,570 beds), including 13 5-star hotels. Six of these are in Sithonia. There are an additional 2,000 family-run apartments with 14,000 rooms (35,000 beds), and 40 camping sites. Overall occupancy is 55%, and most hotels are run on a 6- or 7-month basis during the year. There are numerous opportunities for expanding seasonality by offering a unique travel product.
An investor has the opportunity to create a unique, state-of-the-art hotel and resort product in this area. The fact that there is a 2,000 waterfront in a calm, protected seafront area is an extremely rare.
Alternative development models are also possible, including long-lease villas or timeshares. The precise law here is unclear, and special provisions should be made for this, which have been successful in other cases.
TAIPED will employ a two-stage privatisation process. In Stage 1, interested bidders are invited to express interest in the property. Conditions for participation include:
To be natural or legal persons, not being bankrupt, under liquidation, or in violation of money laundering, bribery or other international statutes
To be an exclusive bidder: bidders cannot participate in multiple consoritia
To have an equity value of at least EUR 25,000,000 in the last year
In Stage 2, binding financial offers must be submitted. The deadline for Stage 1 submissions of Expressions of Interest is 26 April 2013.
The land will be leased to the investor, most likely for a period of 99 year. The investor will have full rights to the exploitation of the seafront for the same time period.
This tender provides tourism investors with a rare opportunity to develop a unique hotel product. Interested investors are requested to contact Philip Ammerman on pga@navigator-consulting.com for additional information.