Grivallia Properties REIC
Originally known as Eurobank Properties, recently renamed to Grivalia Properties, was the first REIC to enter the HSE market in 2006. Following a series of high level placements to its shareholding, Grivalia is currently controlled by Fairfax Financial Holdings, Eurobank, Wellington Management Company and Fidelity, which own respectively 41.50%, 20.48%, 11.16% and 5.84% of its shares.
In a recent press conference, Georgios Chryssikos, the CEO, stated that Grivallia is planning the implementation of a €500 million investment program, which will target the domestic and surrounding region commercial real estate market as well as the state asset sale programme. Grivalia will also try to upgrade existing properties in its portfolio putting great emphasis on energy efficiency. Grivalia’s real estate portfolio under management covers 620,000m2 in Greece, Romania and Serbia with a fair value of 726.3 million euros. 2014 is expected to show profits after six years of losses.
NBG Pangea REIC
Founded in 2010, NBG Pangea REIC is the largest REIC and is controlled from Invel Real Estate Partners (Invel) and National Bank of Greece (NBG). At the end of 2013, Invel Real Estate Partners acquired for €653 million a 66% percent share on NBG Pangaea REIC from National Bank of Greece. York Capital Management agreed to invest €125 million in this transaction.
NBG Pangaea expects to grow to include more than €1.0 billion of real estate assets by the end of 2014. The long term strategic goal of the firm is to be among the top REIC in the region of South Europe in the next 5 years and increase the value of its portfolio over 2 billion euros. The investment focus is placed in the domestic and surrounding European markets. As recently stated from Aristotelis Karytinos, CEO of NBG Pangea REIC, the firm has invested over €250 million and holds an asset portfolio of €1.5 billion in value.
NBG Pangea has submitted a public offer to acquire MIG Real Estate REIC. Based on its latest newsletter on the takeover deal, even though the firm has set up as its primary goal to proceed to an autonomous IPO, if this does not materialize, then its shares will be included to the Hellenic Stock Exchange through a merger with MIG Real Estate.
MIG Real Estate REIC
On 24 September 2014, NBG Pangea submitted a public offer to acquire MIG Real Estate total of common registered shares at the price of €3.10 in cash per share. On 19 October, it emerged that MIG Real Estate has received a positive recommendation by its stockbroker regarding the price per share that Pangaea has offered. The public offering was viewed as approaching the higher end of the fair pricing. Taking this into consideration, NBG Pangaea’s acquisition offer is expected to be completed soon.
MIG Real Estate was established in 1999 under the name ‘‘Attica Properties SA” and was incorporated as a Societe Anonyme in the register of the Hellenic Ministry of Development. Following the strategic partnership with Marfin Investment Group SA (MIG), the Company was renamed to MIG Real Estate and transformed to a REIC. Its exclusive purpose is to acquire and manage real estate properties (including shares in real estate companies).
Trastor REIC
The recent focus has been placed on the public offer by Piraeus Bank to acquire 100% of REICs’ outstanding shares, currently in temporary halt from Athens Courts. Piraeus Bank, which had a 33.8% share in Trastor denounced loan agreements issued for Pasal Development (collateralized by its shares in Trastor), shareholder of 37.08% of Trastor. Pasal has recently requested protection from its creditors under Greek bankruptcy law. The action taken from Piraeus Bank had as a result the ownership of the bank in Trastor to increase to a percentage of 70.8%. Following the increase of the stake in the company, Piraeus Bank placed a forced public offer to take over the shares outstanding. Pasal responded promptly by taking legal measures to protect its interests under the bankruptcy law. If the deal goes ahead, Trastor is expected to take advantage of Pireaus Bank commercial real estate portfolio and its institutional investment base.
Intercontinental International REIC
Intercontinental International (ICI) is a real estate investment company established in March 2012. ICI is targeting opportunities mainly in the domestic and South Eastern Europe. Benefiting from distinct tax-advantages, it is investing in and managing income producing commercial real estate assets. On April 2012, ICI purchased a portfolio of 14 properties from Emporiki Bank (now part of Alpha Bank) at a total purchase price of €45 million. The properties are located around Greece including 8 in Athens. They comprise bank branches and office accommodation leased back to Emporiki Bank with a guaranteed lease term of 15 years.
ICI REIC aims to attract international institutional and opportunistic investors to participate in its share capital and subsequently list its shares on a major European stock market by 2016. ICI is affiliated to the Inter Continental Real Estate & Development Corporation (ICD) based in Chicago.
Notes about the domestic REIC framework
Market participants outline that the major advantage of REICs in Greece is the tax framework governing them. REICs should be regarded as a core investment and they are preferred by investors with a long-term investment horizon. Domestic REICs:
- are exempt from property transfer tax, which accounts to 3% of the sale price
- are exempt from income tax on profits generated from the sale of an asset.
- are exempt from automated premium tax (up to 25%), during the sale of an asset.
- enjoy reduced Land Registry fees
- income tax is based on the fair value of the investments made in property and cash.
- are exempt from 10% tax on distributed dividends
REICs are required to distribute 50% of their profits, however it’s a common practice to distribute a higher percentage of their earnings.