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NEW INVESTMENT OPPORTUNITIES IN GREECE Alexandros Papasteriopoulos PAK LAW Firm Athens, Director

P A K L a w F i r m. NEW INVESTMENT OPPORTUNITIES IN GREECE Alexandros Papasteriopoulos PAK LAW Firm Athens, Director PAK LAW Firm Athens in cooperation with AHI & the Embassy of Greece Washington D.C., Friday, March 30, 2007. PAK Law Firm.

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NEW INVESTMENT OPPORTUNITIES IN GREECE Alexandros Papasteriopoulos PAK LAW Firm Athens, Director

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  1. P A K L a w F i r m NEW INVESTMENT OPPORTUNITIES IN GREECE Alexandros Papasteriopoulos PAK LAW Firm Athens, Director PAK LAW Firm Athens in cooperation with AHI & the Embassy of Greece Washington D.C., Friday, March 30, 2007 www.paklaw.gr, info@paklaw.gr

  2. PAKLaw Firm THE CHALLENGE of MODERN GREECE • East meets West • Crossroad of the energy pathways of • Eurasia & Caucasus • at the gates of Middle East • at the sea channels toward Suez, India & China www.paklaw.gr, info@paklaw.gr

  3. PAKLaw Firm THE CHALLENGE of MODERN GREECE • Geostrategic stability & security • in Balkans, Southeastern Europe, the Black Sea & Caucasus • Economic & political stability • The “Euro” era • Fixed political structures www.paklaw.gr, info@paklaw.gr

  4. PAKLaw Firm THE CHALLENGE of MODERN GREECE • Unique full member of EU & NATO in Balkans • Investments in all countries of the Balkan region (Romania, Bulgaria, FYROM etc) • Creation of infrastructure networks covering all Balkans • Contribution to the general cross-border financial activities www.paklaw.gr, info@paklaw.gr

  5. PAKLaw Firm THE CHALLENGE of MODERN GREECE • Radical reforms in administration • Modernized legal framework • Attraction of international funds www.paklaw.gr, info@paklaw.gr

  6. PAKLaw Firm STATISTICAL EVIDENCE • Economic growth:4.4% in 2006 >3.7% in 2005 • Inflation:3.3% (2006)<3.5% (2005) • Unemployment rate: decreased to 8.3% • Private consumption: increased €41.3million in 2006 , a 7.2% increase over the Q3 2005 figure • Budget deficit reduced to 2.6% of GDP (2006)<5.2% (2005) • FDI :€3.7billion (1st quarter of 2006)→10 times the amount invested on the same period in 2005 • Consumer confidence: from - 33 units (Nov. 2006) to -28 units (Dec. 2006) www.paklaw.gr, info@paklaw.gr

  7. PAKLaw Firm THE CASE ofENERGY & REAL ESTATE • Rapidly developing sectors • Prospect of immediate evolution • Supportive Governmental legislative initiatives undertaken • Beneficial reformation for private investments in Energy & Real Estate www.paklaw.gr, info@paklaw.gr

  8. PAKLaw Firm REAL ESTATESURPLUS VALUE • Since 2004 the value of the Real Estate property has increased by 15%-35% with increasing prospects • Egnatia Highway in the North & Ionian Highway in the West (under construction) cause that land in Epirus, Eurytania, Arcadia, Macedonia will have triple value over the next 10 years. • Remote Aegean Sea islands www.paklaw.gr, info@paklaw.gr

  9. PAKLaw Firm GROWTH INDICATORS • Request for huge office spaces by corporate tenants • Decrease of vacancy rates • Total absorption of quality A & B office space-130,000m² (2006) • 150,000m² Class A office space under construction • Stabilization of rental rates • Convergency of office yields with those in other capital European cities www.paklaw.gr, info@paklaw.gr

  10. PAKLaw Firm RETAIL REAL ESTATE HIGHLIGHTS • Multiple transactions for shopping & leisure centers • Construction of new shopping malls (ex. The Mall, H n’M, Media Markt etc) • Expansion of retail through major traffic arteries • High level of Retail rents www.paklaw.gr, info@paklaw.gr

  11. PAKLaw Firm PROFITABLEINVESTMENT IN TOURISM • AGROTOURISM • SEA TOURISM • BUSINESS TOURISM etc Convenient tourism infrastructure & Unique Investment opportunities www.paklaw.gr, info@paklaw.gr

  12. PAKLaw Firm THE CASE of ENERGY • State investments in traditional & alternative energy sources • Renewable energy sources • Governmental search of private investment • Supportive strategy • Goal: increase of the renewable sources contribution, from 11% to 20% over all the consumed energy www.paklaw.gr, info@paklaw.gr

  13. PAKLaw Firm THE CASE of ENERGY Intermediate goals: • Safe energy at the lowest cost • Gradual reduction of dependence on a single energy source • Expansion of the use of renewable energy sources & bio-fuel • Liberalization of Greece’s international position on global energy map • Accelerated completion of new energy infrastructures to reinforce private investments www.paklaw.gr, info@paklaw.gr

  14. PAKLaw Firm THE CASE of ENERGY • 10 years contracts to private energy generators offered by the State • Objective: over €2.5 billion invested in the field of renewable sources by 2010 • Law 3468/06 • Simplifies licensing procedures • Greek development Laws: Construction cost of energy investment infrastructures is subsidized up to 35% www.paklaw.gr, info@paklaw.gr

  15. PAKLaw Firm THE CASE of ENERGY New Energy policies: • Rationalization of energy balance & strengthening of pure forms of energy • Energy saving • Restriction of unilateral energy dependence • Environmental protection in practice www.paklaw.gr, info@paklaw.gr

  16. P A K L a w F i r m P A K L a w F i r m 8, Saripolou Str. 10682 Athens, GREECE T: +30 210 8259321-23 F: +30 210 8259320 www.paklaw.gr, info@paklaw.gr

  17. Real Estate in Greece www.paklaw.gr, info@paklaw.gr

  18. Discussion Topics • Part One General Overview of the Real Estate Market • Part Two Real Estate Transactions www.paklaw.gr, info@paklaw.gr

  19. The Residential Market Greek citizens have traditionally been property investors Average Home Ownership Europe63% Greece83% Value of Greek ownership in Greece estimated at 640 billion EUR www.paklaw.gr, info@paklaw.gr

  20. The Residential Market • Ministry of Economy is predicting a 9% growth in housing for 2007 • According to the Bank of Greece, there has been a recent 50% increaseof foreign investment in second homes in the lasttwo years www.paklaw.gr, info@paklaw.gr

  21. The Retail Market • High street retailing is most common • For prime high street retail locations the average rate is at € 140 to 180/sq. meters • Pre-tax yield is at 6.2 to 7% www.paklaw.gr, info@paklaw.gr

  22. The Retail Market • Major shift in Athens towards shopping malls and shopping center concept • Only one major shopping mall in operation with extremely successful operations • Another four projects currently being completed www.paklaw.gr, info@paklaw.gr

  23. Publicly Owned Real Estate • The use of publicly owned property is very low and there • are major efforts to increase revenue by exploiting these • opportunities via the private sector. • Currently a legal framework underway for development of these properties. • Leases for 25 to 30 years • Joint ventures with developers and investors • Management and maintenance of properties www.paklaw.gr, info@paklaw.gr

  24. Publicly Owned Real Estate Hellenic Public Real Estate Corporation acting on behalf of the Ministry of Finance is handling over 70,000 properties with a surface area of 3,365,000,000 sq. meters(831,509 acres) Approximately 20% are available for immediate development www.paklaw.gr, info@paklaw.gr

  25. Publicly Owned Real Estate • The National Electricity Company (PPC) • owns 1.3 billion in real estate • controls 563,000,000 sq. meters nationwide: • 7,000 are lots of land and mines • 300 are buildings • The company’s consultants (Credit Suisse) are currently managing the portfolio for development and exploitation of the properties www.paklaw.gr, info@paklaw.gr

  26. Publicly Owned Real Estate • The National Railroad Company (OSE) said to be the largest public owner of property • 3,500 plots of land with total surface area of • 85,000,000 sq.meters • 4,558 buildings with total surface area of • 500,000 sq. meters • Value estimated at5 billion EUR www.paklaw.gr, info@paklaw.gr

  27. Real Estate Trends in Tourism: Golf Significant interest in the Golf-Tourism sector in Greece In the US there are an estimated 40 million golfers and 17,000 golfcourses, which accounts for about 6% of Gross Domestic Product. Europe has an estimated 8 million golfers playing at 6,500 golf facilities, with Britain, France, Germany and Sweden accounting for 69% of all golf courses and 67% of all registered players. The number of European golfers is growingat about 7% annually, with Norway currently the fastest-growing market. www.paklaw.gr, info@paklaw.gr

  28. Real Estate Trends in Tourism: Golf Government studies have shown that 200,000 tourists to Greece are potential golf tourists Greek Golfers: Approximately 1,500 Only five full 18-hole golf courses in Greece Currently 30 investment plans underway www.paklaw.gr, info@paklaw.gr

  29. Real Estate Trends in Tourism: Golf Potential problems in the development of golf resorts: Acquiring the properties Available properties are owned by multiple parties Note: Usually the buying of property is at no more than € 15/sq. meters www.paklaw.gr, info@paklaw.gr

  30. Real Estate Trends in Tourism: Golf Why Greece is an attractive golf investment New market with tremendous potential for growth Strong existing tourism-infrastructure Gradual elimination of bureaucracy Favorable weather conditions for year-round golf season www.paklaw.gr, info@paklaw.gr

  31. Discussion Topics • Part One General Overview of the Real Estate Market • Part Two Real Estate Transactions www.paklaw.gr, info@paklaw.gr

  32. Real Estate Transactions A Step-by-Step Approach • Dealing with a realtor • Acquiring an attorney • Title Search • Public Notary • Tax • Recording at the Land Registry • Financing www.paklaw.gr, info@paklaw.gr

  33. Dealing with a Realtor Written Agreement Buyer pays commission Seller pays commission Realtor Written Agreement • Payment at closing • No standard set by law or by any associations • Usually between 2% to 5% www.paklaw.gr, info@paklaw.gr

  34. A Step-by-Step Approach • Dealing with a realtor • Acquiring an attorney • Title Search • Public Notary • Tax • Recording at the Land Registry • Financing www.paklaw.gr, info@paklaw.gr

  35. Acquiring an attorney Mandatory for transfers of: € 30,000 or more in the Province of Attica € 12,000 or more for the rest of Greece Attorney not required by law for transfers of: lesser value www.paklaw.gr, info@paklaw.gr

  36. Acquiring an attorney Negotiation Title search Coordination with notary Closing agent Recording at the land registry Attorney duties www.paklaw.gr, info@paklaw.gr

  37. Acquiring an attorney Attorney fees No maximum fee BUT mandatory minimums set by Bar Association • up to € 44,020 at1% • € 44,020 to€ 1,467,351 at0.5% • € 1,467,351 to€ 2,934,702 at0.4% • € 2,934,702 to€ 5,869,405 at0.3% • € 5,869,405 to€ 14,673,514 at0.2% • € 14,673,514 to€ 29,347,028 at0.1% • € 29,347,028 to€ 58,694,057 at0.05% • over € 58,694,057 at0.01% www.paklaw.gr, info@paklaw.gr

  38. Acquiring an attorney Most attorneys charge 2% Attorney fees www.paklaw.gr, info@paklaw.gr

  39. Acquiring an attorney Attorney fees www.paklaw.gr, info@paklaw.gr

  40. A Step-by-Step Approach • Dealing with a realtor • Acquiring an attorney • Title Search • Public Notary • Tax • Recording at the Land Registry • Financing www.paklaw.gr, info@paklaw.gr

  41. Title Search • In the buyer’s interest to complete a detailed title search • No title insurance in Greece and is not required by banks for mortgages • Final contract is deemed enforceable title in Greece and shields the buyer • Title searches can only be completed by attorneys • Cost of title search varies depending on search complexity • Cost is often included in attorney fee for the transfer www.paklaw.gr, info@paklaw.gr

  42. Title Search • All property information is located at land registry • All liens are recorded at land registry • Any liens not recorded at time of purchase are invalid • The final contract protects the buyer www.paklaw.gr, info@paklaw.gr

  43. A Step-by-Step Approach • Dealing with a realtor • Acquiring an attorney • Title Search • Public Notary • Tax • Recording at the Land Registry • Financing www.paklaw.gr, info@paklaw.gr

  44. Public Notary Not the same as common law notaries Trained jurists www.paklaw.gr, info@paklaw.gr

  45. Public Notary Notary duties Prepares tax forms Prepares contract of sale Acts as a state organ at closing Paid for by the buyer Cost approximately 1.2% www.paklaw.gr, info@paklaw.gr

  46. Public Notary € 200,000 Transfer Cost approximately €2400 www.paklaw.gr, info@paklaw.gr

  47. A Step-by-Step Approach • Dealing with a realtor • Acquiring an attorney • Title Search • Public Notary • Tax • Recording at the Land Registry • Financing www.paklaw.gr, info@paklaw.gr

  48. Tax Tax revolves around government assessed value or declared closing price The tax system for real estate is currently in a transitional phase www.paklaw.gr, info@paklaw.gr

  49. Tax There are two tax scenarios currently in enforcement: Transfers for property acquired before January 1st 2006 Transfers for property acquired on or after January 1st 2006 www.paklaw.gr, info@paklaw.gr

  50. For the Buyer: For property within zoning 9% tax on the first € 15,000 11% tax on the amount > € 15,000 plus 3% of the above tax For property out of zoning 7% tax on the first € 15,000 9% tax on the amount > € 15,000 plus 3% of the above tax Tax For the Seller: No tax Transfers for property acquired before January 1st 2006 www.paklaw.gr, info@paklaw.gr

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