Live and Work by Country Reports
Facilitating the transition into the new age
Legal 500 has identified you as not only one of the leading real estate lawyers in Greece, but also inducted you into its Hall of Fame as someone who has been at the pinnacle of her specialty field for over a decade. To start the interview, what noticeable trends have you seen in the global real estate industry amidst the pandemic, and what would you say is simply temporary due to short-term shocks, and which would you say are systemic – and will have a permanent impact on the industry?
It is difficult to make such a distinction, while we are still facing the pandemic. After the initial shock I think that we all adjusted to this new reality, which has brought, along with all the bad, a lot of good as well. This has changed the way that everyone works and approaches real estate. Some banks had already started working on the electronic version of transactions before the pandemic on their REOs, so they had a much easier transition. However, there are some things that we still cannot do online. In the case of the Hellinikon Project through Lamda Development, it is really difficult to review and assess designs and drawings for which we need to be sitting around the table. We are very lucky to have a great minister in the area of e-governance, that introduced several initiatives to digitalize and resolve many previously problematic aspects of bureaucracy. It is becoming more realistic for foreign investors to not have to travel to Greece for a week every month if they are looking to invest here. The electronic part of these transactions is certainly upgraded here, and I believe that it will stay with us from now on. It leads to significant reductions of costs, being much more efficient and faster. In Greece, we do not have an electronic system for real estate. Thus, you need to actually visit in person the land registries. Now, we are moving towards an electronically centralized cadastral. I think about 30 percent of the rights at this point have been registered electronically. It was a happy coincidence that all of this had started before the pandemic, and we were able to adjust. After the first couple of months, business has really picked up. The first shock with office space does not apply any longer, as people now require just a different kind of office space. In other words, there is still notable interest in converting all the old office spaces into something more attractive. We have more digital nomads visiting Greece, because of the weather and the quality of life, but also partly because of the way we handled the pandemic. The first few shocks do not seem to have a long-term effect.
Dubbed Greece 2.0. Greece’s COVID-19 relief plan involves over EUR 30 billion in labor reforms, government grants, incentives, and loans toward 175 investment areas aimed at a post-COVID-19 economy, one which is both greener and digitally competitive. Athens, for its part, is striving toward being a green and smart city, while the EBRD has approved large loans in favor of Greek developers to build sustainable developments, including a EUR 50 million loan to Prodea. What are your projections for growth in the sustainable, or ‘green’ development space in Greece? Do you see Greek developers join in this global momentum?
Certainly, as this has become so significant so quickly. A few years back, people lacked basic knowledge in our space. This has scaled up so quickly primarily thanks to the fact that foreign investors are not willing to invest in buildings that are not sustainable. It took a while for this trend to get here. I was very lucky to be involved in the Hellinikon Project, in which these ideas where present from the very first day. Everyone needs to adapt, otherwise they will not be able to sell or rent their properties to investors. That is also a great thing for us and our children’s future.
Sticking with the sustainability and ESG topic, in line with the EU’s Green New Deal, investors and the financial markets have been equipped with the EU Taxonomy which will standardize and indicate to investors when an investment can qualify as ‘green’. What are the compliance and due diligence implications for firms themselves to ensure their plans qualify for and developments align with these standards? Is there uncertainty among developers over what they need to do for ESG compliance? Do they have the internal capacity to ensure ESG compliance?
What we need to follow is very clear. Sometimes law in Greece is a bit too unclear, but this is not one of those cases. This is new EU-based legislation, so it is not something we had to device ourselves. It takes a lot of effort from not-so-modern entities to adapt. There is a lot of ‘old money’ in Greece and some of the heads of companies that are still active and important come from a different background than what we would wish. It is very difficult for them to accept that there are new rules by which they have to abide. We have clients from various areas, and some are still shocked when we inform them that they need to have an environmental license in place before building. It is also worth mentioning that Greek legislation provides significant ‘green incentives’, such as a 5 to 10 percent increase in buildable area for certified energy-efficient buildings.
Greece’s new labor laws, as part of the COVID-19 relief plan, pays particular attention to remote working. While not a new phenomenon, the pandemic has ushered in a new era for the global workforce, with some surveys indicating that upward of 70 percent of workers would prefer working from home at least some days a week. This social change also has implications for the real estate market. Do you see architectural designs change in future to favor hybrid work/life abodes? The laws highlight the responsibilities of employers toward these home offices and mentions paying for things like work furniture and Wi-Fi. Do you foresee legal and tax issues arising from a commercial/residential designation for properties? What other interesting legal issues could this social shift bring about?
There is certainly a shift. Again, the government is doing its best to device new legislation, as this is the most effective method to mobilize Greek people. Many companies that we work with are looking for ways to adapt existing spaces so that they include common areas. One of the implications of amending the number of people in the building is the regulation regarding parking spaces at work. Greece has not yet adopted the modern version of public transport and most people use their car. These minimums were introduced on a very different era and under different conditions. Thus, we need to amend that quickly and it reflects badly on current and future sustainability-focused projects. There are a few details such as this one to be addressed, so that we can allow this change to fully unravel.
The current crop of Greek leaders has received criticism, but also praise for their handling of COVID-19, and, particularly, the tourism and real estate markets are faring better than many of your peer market competitors, with Greece jumping from 35th to 29th on the FDI recipient list, according to EY. Greece’s ease of doing business has consistently improved in recent years, what would you say are still some of the policy and bureaucratic hurdles that foreign investors must overcome and what cause for optimism is there already?
It might seem minor, but one of the main problems we face when closing with a client is setting up the entity and opening their bank accounts in particular. People who come from more organized countries cannot believe the level of bureaucracy in that regard. It can take even more than 2 months of back and forth, which is unacceptable and needs to be adapted alongside the aforementioned procedures into the new digital age. Other than that, I do not see any other types of restrictions in our line of work. There are some restrictions for locations around the borders of Greece, for which you need a specific approval by a governmental committee. Besides that, the fast-track procedure of strategic investments and developments is a great opportunity and the center of attraction for many foreign investors. We have funds and private investors, especially for greenfield developments. This is the safest procedure as it completes with a presidential decree, which is the ideal way of conducting business in Greece. It is fast and efficient, whereas the public officers are experienced and well-educated. There are also several tax advantages offered, not just to foreign investors. The current government is very business-oriented, looking to bring nothing but healthy investments into the country.
Some of your notable clients include Lamda Development, Piraeus Bank, the Hellenic Asset Development Fund, Prodea Investment, and Eurobank. Could you offer us a brief overview of the services and professionalism clients may expect from the real estate arm of AKL?
I would say that they usually reach us thanks to our technical expertise, which is not that common. If you ask most real estate developers, this is their most usual complaint. With AKL these clients get a fuller understanding of each case. We have created an entire branch in our firm that deals solely with technical issues in collaboration with engineers. Clients come to us for the expertise in these issues and our ability to understand the problem, rather than getting lost in court rulings and legislation. They want fast responses, diligence, and a business-oriented advice. They appreciate that even when a question has no answer, we always offer an opinion. Again, out of the aforementioned, the technical part is the key differentiator for us in Greece.
What would be your final message for our readers of Newsweek?
It has been a strange year for us. I think that we have managed to upgrade the firm digitally. There is no available office space anymore, so we are thinking of moving. We will either need to move or adjust our office space and adapt to the new working conditions. This is a big decision we need to make by the end of the year. We are also getting into the energy sector. I am very happy with our performance on the real estate sector. At the same time, we have been blessed with many versatile and hardworking people here at AKL, thus I cannot really ask for anything more from our firm.