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Greece in talks to sell renowned resort Astir Palace to Qatar for capital boost

Feb 21, 2013 12:07 pm

Skift Take

Greece could still enjoy the esteem of hosting celebrities and political influencers while receiving a sizable investment for iconic property; a win-win for the cash-strapped country.

— Samantha Shankman

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 / The Westin Athens

An aerial view of Astir Palace, located just half an hour away from the historical city centre of Athens and the Acropolis? / The Westin Athens


Qatar has held talks with Greece to buy the Astir Palace, a beachfront resort in Athens that twice hosted the Bilderberg conferences of political and business leaders, according to three people with knowledge of the matter.

Representatives of Qatari Diar Real Estate Investment Co., part of the Persian Gulf country’s sovereign-wealth fund, discussed the sale with Greek officials and the resort’s owners when Prime Minister Antonis Samaras visited the capital Doha last month, said the people, who asked not to be identified because the talks are private.

Greece is striving to attract foreign investment as the economy faces its sixth straight year of contraction and an unemployment rate that reached 27 percent in November. An Astir Palace deal would mark the first sale of a property freehold in the country since the government announced a 50 billion-euro ($67 billion) asset-sale plan in 2011. Greece is trying to raise 2.6 billion euros this year.

The National Bank of Greece and the Hellenic Republic Asset Development Fund, which own the property, put out an international public tender on Jan. 16. The 120,000 square-meter (1.3 million square-foot) complex includes three hotels, private beaches and 58 bungalows on the Vouliagmeni peninsula 25 kilometers (16 miles) from Venizelos International Airport.

Celebrity guests

Since its opening in the 1960s, the resort’s guests have included Jackie Onassis, Nelson Mandela, Tony Blair, Jane Fonda and Frank Sinatra, according to its website. In 1993 and 2009 Astir Palace hosted the Bilderberg conference, an invitation-only annual gathering of European and American business and political leaders named after the hotel in Holland where the first meeting took place in 1954.

Spokesmen for the National Bank of Greece, and the state privatization fund declined to comment on the matter. Qatari Diar didn’t immediately respond to calls and e-mails seeking comment.

Greece’s plan to reduce public debt by selling assets is central to the country’s efforts to secure further financing from the European Union and International Monetary Fund. The disposal program, which also includes stakes in utilities and mining companies, was delayed by months of negotiations over the country’s debt restructuring last year and two general elections that threatened Greece’s membership in the euro.

The Greek divestment plan has brought in 1.8 billion euros so far. NCH Capital Inc., a New-York based private-equity firm, will invest 100 million euros to develop a strip of land on the Greek Island of Corfu under a 99-year concession, the fund said in January. It plans to announce a bidder for a larger project on the island of Rhodes in the next several months.

Development potential

“It’s difficult and challenging at the same time to estimate a figure for the asset due to its unique location,” said Ioannis Kaligiannakis, a senior appraiser at real estate consulting firm Colliers International in Athens. “The value is also underpinned by development potential including conversion of the existing hotel establishments to residential units, partial demolition, refurbishments and new developments including 3,000 square meters for a conference center.”

National Bank of Greece holds 85 percent of Astir Palace Hotel SA, the public company that owns the resort and has a market value of 286.9 million euros. It also owns a site where the other two hotels and 58 bungalows are located. Starwood Hotels & Resorts Worldwide Inc. operates the Westin Athens Astir Palace Beach Resort and the Arion Resort & Spa Astir Palace, which includes the bungalows. Among the resort’s restaurants is Matsuhisa Athens, a sushi eatery owned by Nobu Matsuhisa that overlooks the Aegean Sea.

In 2011, National Bank of Greece paid 43 million euros for a 40-year lease of the tourist port that connects the resort by sea to make the asset more attractive. It spent 70 million euros refurbishing the hotels before the 2004 Olympics, according to the bank’s annual reports.

Accords already in place with hotel operators, access to the marina and the additional development potential of the site will all be factors in the price, according to Colliers’ Kaligiannakis.

With assistance from Zainab Fattah in Dubai. Editors: Ross Larsen and Andrew Blackman.

To contact the reporter on this story: Sharon Smyth in Madrid at ssmyth2@bloomberg.net. To contact the editor responsible for this story: Andrew Blackman at ablackman@bloomberg.net.

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