2024 Outltook

By Dennis Lidis

Founder and Chief Executive

Greece, the poster boy of economic recovery, we believe has entered a goldilocks 10-year phase, that will transform the country and the Real Estate marketplace. Propelled forward by the strong winds of a strong local economy, stable government and plentiful capital, the Greek Real Estate market is set to outperform its European counterparts for a second year in a row.

We expect demand to remain focused mainly in Athens, Thessaloniki, and a number of select Greek islands, but the growth will touch all places, in varying degrees.

There are 5 major trends we believe support this goldilocks phase.

1. Massive amount of capital

2. Obsolete current Real Estate stock

3. ESG policies

4. Slow time to market delivery for new Real Estate stock

5. Significant unsatisfied demand

A European wide theme, the post WWII age of urban buildings have reached the end of their economic life and require major renovations or redevelopment, the effect even more pronounced in Greece for a variety of reasons.

Real Estate is responsible for 40% of global greenhouse gases with only 1% of European assets upgraded for energy conservation. We believe the Real Estate development sector prospects rarely looked better with solid fundamentals and supported by massive European funding programs and government policies.Across all property sectors, demand is high for new, modern buildings with state-of-the-art facilities. The theme is consistent equally for residential, hotels, logistics, office, and retail.

The Greek REITS (known as AEEAP), have become property developers, unable to satisfy their demand for quality investments and taking advantage of the strong market conditions. However we believe the listed REITS stock price will continue to trade at a discount to NTA, reflecting the high debt ratios, developer risk and low distribution yields paid out to investors.

We believe owners of old assets will take advantage of the strong market prices and sell, while some will renovate in order to generate rental income as these properties are not in demand otherwise.

To help you visualise this, consider the 2014 bitcoin price of $320 versus the January 2024 bitcoin price of $41,807. Now consider the 2014 cash balance of $320 has been eroded by inflation to $243 in value terms versus the $41,807 value balance of the bitcoin option. Similar value differentiation affects could be had in digitised assets versus non digitised assets. And as the market is becoming more complex and demanding, it requires a new set of skills and management practices in order to navigate through it. We believe as a result, investors will seek professional managers for advice and investment access and the wealth management sector will grow strongly across the globe.

At odds with the digital tsunami, Greece is living through a very old-fashioned problem.

Actually, the Greek Real Estate market is at war with itself. The crushing forces of bureaucracy and special interests, underpinned by a cultural longing to protect one’s comfort zone and fear of change at all costs are the Joker in the deck of economic cards.

As of the day of issue of this report, lawyers and notaries are on strike, arguing the digitisation of Real Estate contracts. And while the rest of the investment world is beginning to unlock the unfathomable wealth that will be generated by asset digital tokenisation, Greece remains the only developed economy without a land titles register.

The above issue we believe is one of the biggest challenges the Greek government faces towards its efforts to support the economy. If the digitisation bet is lost, the economy will likely revert, quickly and violently. But if history has taught us any lessons at all, it is that peril follows those that resist change when the time of change has come. Smart and intuitive investors will embrace the challenge of change and invest wisely. We believe, matters will be resolved, and the government will be successful pushing through the changes for the good of the many.

I was blessed to have spent many years operating in the competitive Sydney Australian Real Estate market, and worked with some amazing talented people. We learned a lot from them, and I believe LIDIS® can apply this knowhow and make a significant and positive contribution to Greece. One urban regeneration project at a time, the face of Greece is changing. LIDIS® has a developer and fund manager business model, that reduces risks and maximises results. It ensures projects are delivered for governments and investors alike.

2023 was an important foundation year for the firm, towards realising our company vision.

The firm expanded its asset portfolio, grew its rental revenue and investor relationships. The company corporate structure was upgraded to a Limited (S.A. or A.E. as known in Greece) and completed a major share capital raise, taking the paid-up company capital to €3.05M.

LIDIS® Luxury Hotel in Metaxourgio - Artist Impression

2024 finds LIDIS® with a fully funded €18M project pipeline across 5 projects all delivered in the LIDIS® unmistaken design standard, each project will seek to set a new standard for occupier experience quality and innovation.

Expect 2024 to be full of surprises and volatility but in the end, a great year for Real Estate.

Disclaimer: Any expression of opinion is personal to the author and the author makes no guarantee of any sort regarding accuracy or completeness of any information or analysis supplied. The authors and LIDIS® are not responsible for any loss arising from any investment based on any perceived recommendation, forecast or any other information contained here. The information and publication are not intended to be and do not constitute financial advice, investment advice, or any other advice or recommendation of any sort offered or endorsed by LIDIS®.