Executive Marketing Plan Example for Property Development...
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EXECUTIVE & Y! P O MARKETINGOT C DO
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BUSINESSESPLAN S
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M A EX
AB HELLIOTI Property Development
A division of Lynx Management Services UK Limited
Internal Reference: AB HELLIOTI Property Development Executive & Marketing Business Plan Date: 2010-11-06 Page 2 of 39 Strictly Private & Confidential
Contents 1.
2.
Executive Summary...............................................................................................................................6 1.1
Introduction ....................................................................................................................................6
1.2
Management Team ........................................................................................................................6
1.3
Partnerships ...................................................................................................................................6
1.4
Real Estate in Greece ....................................................................................................................6
1.5
The Target Market..........................................................................................................................6
Company Information ............................................................................................................................7 2.1
Incorporation ..................................................................................................................................7
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2.1.1
Registered Company Name ....................................................................................................7
2.1.2
Company Registration Number ...............................................................................................7
2.1.3
Location ..................................................................................................................................7
2.1.4
Postal Address ........................................................................................................................7
2.1.5
Facsimile .................................................................................................................................7
2.1.6
Contact Email..........................................................................................................................7
2.2
3.
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Business Owner Contact Information .............................................................................................8
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2.2.1
CEO ........................................................................................................................................8
2.2.2
Business Consultant – Funding Development .........................................................................8
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2.3
Project Name..................................................................................................................................8
2.4
Project Location..............................................................................................................................8
2.5
Project Client ..................................................................................................................................8
2.6
Project Owners...............................................................................................................................8
2.7
Principal Shareholder .....................................................................................................................8
Business Opportunity ............................................................................................................................8 3.1
International Real Estate Market ....................................................................................................9
3.2
The Real Estate Market in Greece................................................................................................11
Executive & Marketing Business Plan AB HELLIOTI Limited Strictly Private and Confidential
Presented by Mr Mark G Paterson, mgp & Associates (A division of Lynx Management Services UK Limited)
www.markgpassociates.com
A division of Lynx Management Services UK Limited
Internal Reference: AB HELLIOTI Property Development Executive & Marketing Business Plan Date: 2010-11-06 Page 3 of 39 Strictly Private & Confidential
3.3
The Greek Construction Sector ....................................................................................................12
3.3.1
Major Construction Companies in Greece .............................................................................12
3.3.2
Construction ..........................................................................................................................14
3.3.3
Infrastructure Projects ...........................................................................................................14
3.3.4
Olympic Projects ...................................................................................................................15
3.3.5
Building Projects....................................................................................................................16
3.3.6
Electromechanical, Industrial & Environmental Projects ........................................................17
3.3.7
Concessions..........................................................................................................................17
3.3.8
Energy and Environment .......................................................................................................18
3.3.9
Real Estate and Other Holdings ............................................................................................20
3.4
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Land/Property Details ...................................................................................................................20
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3.4.1
Land Development Location ..................................................................................................20
3.4.2
Land Development Details ....................................................................................................20
3.4.3
Land Development Title.........................................................................................................20
3.4.4
Land Development Permits/Regulations................................................................................20
3.4.5
Property Details.....................................................................................................................21
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3.5
The Greek Economy.....................................................................................................................23
3.6
Partnerships .................................................................................................................................25
3.7
Target Market ...............................................................................................................................25
3.8
Greece Retail Snapshot ...............................................................................................................26
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3.8.1
Occupier Focus .....................................................................................................................26
3.8.2
Investment Focus ..................................................................................................................26
3.8.3
Outlook..................................................................................................................................26
3.8.4
Market Activity .......................................................................................................................26
3.8.5
Market Outlook ......................................................................................................................26
3.8.6
Prime Retail Rents ................................................................................................................27
Executive & Marketing Business Plan AB HELLIOTI Limited Strictly Private and Confidential
Presented by Mr Mark G Paterson, mgp & Associates (A division of Lynx Management Services UK Limited)
www.markgpassociates.com
A division of Lynx Management Services UK Limited
Internal Reference: AB HELLIOTI Property Development Executive & Marketing Business Plan Date: 2010-11-06 Page 4 of 39 Strictly Private & Confidential
3.8.7 4.
Prime Retail Yields ................................................................................................................27
Positioning and Business Strategy ......................................................................................................27 4.1
Market Attractiveness ...................................................................................................................28
4.2
A Real Estate Bonanza for Greece?.............................................................................................28
4.3
Business Development Strategy...................................................................................................30
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4.3.1
Stage 1 - Growth and penetration in the market ....................................................................30
4.3.2
Stage 2 - Expansion/Consolidation/Development ..................................................................30
4.3.3
Stage 3 - Further Expansion/Consolidation/Development......................................................30
4.4
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Business Objectives .....................................................................................................................31
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4.4.1
Economic ..............................................................................................................................31
4.4.2
Financial................................................................................................................................31
4.4.3
Market ...................................................................................................................................31
4.4.4
Employer ...............................................................................................................................31
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5.
Operational Objectives ........................................................................................................................31
6.
Financing, Financial Projections and Plan ...........................................................................................31 6.1
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Funding ........................................................................................................................................31
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6.1.1
Project Funding Amount ........................................................................................................31
6.1.2
External Funding Requirement ..............................................................................................31
6.1.3 6.1.4 6.1.5 6.2
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Funding Focus.......................................................................................................................31 Borrower Financial Status .....................................................................................................32 Collateral ...............................................................................................................................32
Financing Structure ......................................................................................................................32
6.2.1
Allocation of Funding .............................................................................................................32
6.2.2
Summary Financial Projections .............................................................................................32
6.2.3
Loan ......................................................................................................................................32
6.2.4
Preferred Loan Interest Rate .................................................................................................33
Executive & Marketing Business Plan AB HELLIOTI Limited Strictly Private and Confidential
Presented by Mr Mark G Paterson, mgp & Associates (A division of Lynx Management Services UK Limited)
www.markgpassociates.com
A division of Lynx Management Services UK Limited
Internal Reference: AB HELLIOTI Property Development Executive & Marketing Business Plan Date: 2010-11-06 Page 5 of 39 Strictly Private & Confidential
7.
6.2.5
Preferred Loan Term .............................................................................................................33
6.2.6
Principles...............................................................................................................................33
SWOT Analysis ...................................................................................................................................33 7.1
Infrastructure and Service Demand ..............................................................................................33
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7.1.1
Strengths...............................................................................................................................33
7.1.2
Weaknesses..........................................................................................................................33
7.1.3
Opportunities.........................................................................................................................33
7.1.4
Threats..................................................................................................................................34
7.2
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People and Competencies ...........................................................................................................34
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7.2.1
Strengths...............................................................................................................................34
7.2.2
Weaknesses..........................................................................................................................34
7.2.3
Opportunities.........................................................................................................................34
7.2.4
Threats..................................................................................................................................34
7.3
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Political and Social .......................................................................................................................34
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7.3.1
Strengths...............................................................................................................................34
7.3.2
Weaknesses..........................................................................................................................35
7.3.3
Opportunities.........................................................................................................................35
7.3.4
Threats..................................................................................................................................35
7.4
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Economic and Financial ...............................................................................................................35
7.4.1
Strengths...............................................................................................................................35
7.4.2
Weaknesses..........................................................................................................................36
7.4.3
Opportunities.........................................................................................................................36
7.4.4
Threats..................................................................................................................................36
8.
Qualities and Motivation ......................................................................................................................36
9.
Summary.............................................................................................................................................39
Executive & Marketing Business Plan AB HELLIOTI Limited Strictly Private and Confidential
Presented by Mr Mark G Paterson, mgp & Associates (A division of Lynx Management Services UK Limited)
www.markgpassociates.com
A division of Lynx Management Services UK Limited
Internal Reference: AB HELLIOTI Property Development Executive & Marketing Business Plan Date: 2010-11-06 Page 6 of 39 Strictly Private & Confidential
1. Executive Summary 1.1
Introduction AB Hellioti Limited is a well established company based in Athens, Greece, the business has purchased three plots of land, holding 80% equity, ready for property development while also identifying a property for purchase and redevelopment.
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The investment to develop the land and to purchase and redevelop the property amounts to a combined amount of Euros8,000,000(Eight Million Euros).
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The land is located in Koropi City and the property is located in Attica, both areas are highly populated residential land areas with a close proximity to the airport.
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This document highlights the proposal to raise a loan for 100% funding of the combined land development and property redevelopment and includes architectural illustrations of the proposed development as well as the existing property photographs with various views from this property.
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All data highlighted has been included from up to date analysis and resources available.
1.2
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Management Team
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The project owner is AB Hellioti Limited, Mrs. Alexandravas Hellioti is the principal shareholder with a shareholding of 100% and Mr Bill Elliot is the Chief Executive Officer in charge of the property development.
1.3
Partnerships
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The construction project will be managed by AB Hellioti Limited in partnership with Mr. George Paraskevopoulos, Architecht N.T.U.A and the construction company Managoudis Limited as well as Mr Nikolaos Dimitriou Andrianakos.
1.4
M A EX
Real Estate in Greece Greece’s real estate sector has suffered from the effects of the global economic crisis. Greece’s may yet avoid going into recession - GDP contracted in Q109, but then returned to growth in Q209, according to Eurostat.
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The economy continues to improve. The Consumer Confidence indicator and the Economic Sentiment index, compiled by the Bank of Greece Eurosystem Economic Research Department (EERD), have both been on the increase, especially since the end of Q309 - when it recovered from a low point in late-2008 and early-2009.The residential property market has held up relatively well through most of 2008, but prices have drifted downwards in 2009. The decline is expected to turn around as the Greek economy recovers.
1.5
The Target Market The strategy for the Attica region is targeting towards the “Establishment of the Attica Region” as an international entrepreneurship centre, enhancement of the extroversion of the local system of production and accommodation of the attractiveness of foreign investments through the
Executive & Marketing Business Plan AB HELLIOTI Limited Strictly Private and Confidential
Presented by Mr Mark G Paterson, mgp & Associates (A division of Lynx Management Services UK Limited)
www.markgpassociates.com
A division of Lynx Management Services UK Limited
Internal Reference: AB HELLIOTI Property Development Executive & Marketing Business Plan Date: 2010-11-06 Page 7 of 39 Strictly Private & Confidential
encouragement of innovation, entrepreneurship, research and technology and the diffusion of new technologies.
2. Company Information 2.1
Incorporation 2.1.1 Registered Company Name A.B. HELLIOTI LIMITED
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2.1.2 Company Registration Number 7111/2006
2.1.3 Location
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Athens, Greece
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2.1.4 Postal Address
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VH SHIPPING MANAGEMENT LIMITED STR, 114, VAS. KONSTANTINOU 19400 GREECE
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2.1.5 Facsimile
M A 2.1.6 Contact EX Email R FO +30 210 6022436
[email protected]
Executive & Marketing Business Plan AB HELLIOTI Limited Strictly Private and Confidential
Presented by Mr Mark G Paterson, mgp & Associates (A division of Lynx Management Services UK Limited)
www.markgpassociates.com
A division of Lynx Management Services UK Limited
Internal Reference: AB HELLIOTI Property Development Executive & Marketing Business Plan Date: 2010-11-06 Page 8 of 39 Strictly Private & Confidential
2.2
Business Owner Contact Information 2.2.1 CEO Mr. Bill Elliot Chief Executive Officer Email:
[email protected] Telephone: +30 695 7893169
2.2.2 Business Consultant – Funding Development Mr. Mark Paterson Managing Partner, mgp & associates CEO, Lynx Management Services UK Limited Email:
[email protected] Email:
[email protected] Website: www.markgpassociates.com Skype ID: markgpaterson Telephone: + 27 79 770 2235 Facsimile: 0866383393(fax to email)
2.3
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Project Name
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AB HELLIOTI PROPERTY DEVELOPMENT
2.4
Project Location ATHENS, GREECE
2.5
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Project Client
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AB HELLIOTI LIMITED
2.6
M A EX
Project Owners AB HELLIOTI LIMITED
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Principal Shareholder Mrs. Alexandravas Hellioti, 100% shareholder
3. Business Opportunity AB HELLIOTI is specialized in economic and strategic management in shipping, chartering and SNP companies as well as in building and construction companies in Greece. The project is focused on the development of land in Koropi City close to Athens, Greece, providing the first residence at a low cost for local individuals and families, focusing on existing employees of the group. Business earnings are heavily taxed in Greece and instead of depositing the cash in the banking system the money is invested in buying land. To this end the project for the development of residential structures has been considered for sometime after investing in the undeveloped land already purchased. Executive & Marketing Business Plan AB HELLIOTI Limited Strictly Private and Confidential
Presented by Mr Mark G Paterson, mgp & Associates (A division of Lynx Management Services UK Limited)
www.markgpassociates.com
A division of Lynx Management Services UK Limited
Internal Reference: AB HELLIOTI Property Development Executive & Marketing Business Plan Date: 2010-11-06 Page 9 of 39 Strictly Private & Confidential
3.1
International Real Estate Market
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Signs of continued global economic recovery abounded during the first quarter of 2010, but the recovery remains uneven and bifurcated between emerging and developed economies at one level and then across major developed economies at the next level. Structural fiscal imbalances are unfortunately a too common feature among many of the developed economies around the world. Even very small economies, such as Greece, can in the short run have a disproportionate impact on global financial markets as we have witnessed year-to-date.
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Fiscal imbalances can clearly be an impediment to long-run growth and the market is keenly focused on current and future political leadership and the degree to which policies will be put in place to help correct these structural imbalances going forward. This sort of analysis may initially seem far afield from global real estate securities investing, however as Greece has demonstrated this year, these issues can have significant implications for country risk premiums, corporate cost of capital and more specific to commercial real estate, the intermediate and long-term demand for space. Executive & Marketing Business Plan AB HELLIOTI Limited Strictly Private and Confidential
Presented by Mr Mark G Paterson, mgp & Associates (A division of Lynx Management Services UK Limited)
www.markgpassociates.com
A division of Lynx Management Services UK Limited
Internal Reference: AB HELLIOTI Property Development Executive & Marketing Business Plan Date: 2010-11-06 Page 10 of 39 Strictly Private & Confidential
International real estate securities continued to consolidate their 2009 gains during the first quarter of 2010, generating slightly positive total returns. For the quarter, international real estate equities performed slightly better than international equities as highlighted by the 1.26% increase in the FTSE EPRA NAREIT Developed Rental ex U.S. Index (“the Benchmark”) versus the 0.98% increase in the MSCI EAFE Index, both expressed in U.S. dollar terms.1 Total returns for international real estate and international equities fell well short of U.S. equities during the quarter when compared to the 5.39% increase in the S&P 500 Index, in part due to the continued strengthening of the U.S. Dollar, which increased by 4.13% as measured by the U.S. Dollar Spot Index.2
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With balance sheet recapitalizations largely a thing of the past for listed global real estate companies and space market fundamentals set to lag a recovery in global economies, market participants remain focused on a recovery in direct real estate transaction volume and the stabilization, and in some cases appreciation, of real estate capital values. Transaction volumes continued to show sequential improvement during the fourth quarter 2009 across most major developed markets, with the Central London market within the U.K a relative standout in terms of relative transaction volumes and appreciation of capital values. Commercial real estate pricing within the U.K. was at the leading end of the global correction and demonstrated one of the most significant overall declines, thus a sooner and larger bounce is not totally unexpected. Trends within the Central London asset market are a good barometer of what is happening globally, directionally at least, if not in magnitude, as the pool of available capital seeking to find a home in commercial real estate currently outpaces the supply of high quality properties. It is too soon to tell if this is a temporary disequilibrium or if this trend has legs, but it is clear that asset market movements will at the margin have a more meaningful impact on listed global real estate company share prices in the near-term as compared to underlying real estate fundamentals.
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Taking a closer look at the individual countries that are represented within the FTSE EPRA NAREIT Developed Rental ex U.S. Index, the top five performing countries during the first quarter on a total return basis measured in U.S. Dollars were Switzerland, Canada, Sweden, Japan and Finland.3 Not surprisingly, none of the large Euro-based countries were among the top performer list for the quarter given the negative reverberations from Greece. Switzerland has historically been a safe-haven in times of turmoil and its strong performance during the quarter is reflective of this status.
Canada continues to show good momentum on the back of a healthy economy and an appreciating commodity based currency. Japan was a significant underperformer during 2009 and thus is consider good value by some despite its significant fiscal and economic challenges. Conversely, the bottom five performing countries during the quarter were Greece, Norway, the U.K., New Zealand and Singapore.3Despite the strong performance of the Central London asset market and the meaningful pick-up in office leasing demand, the listed U.K. market was a significant laggard during the quarter as the overall recovery in economic growth remains sub par relative to developed market peers and concerns that large fiscal imbalances will cause this to remain the case going Executive & Marketing Business Plan AB HELLIOTI Limited Strictly Private and Confidential
Presented by Mr Mark G Paterson, mgp & Associates (A division of Lynx Management Services UK Limited)
www.markgpassociates.com
A division of Lynx Management Services UK Limited
Internal Reference: AB HELLIOTI Property Development Executive & Marketing Business Plan Date: 2010-11-06 Page 11 of 39 Strictly Private & Confidential
forward. Additionally, the outcome of up-coming elections are weighing on the market as the potential for a hung parliament raises the concern as to whether the eventual electoral victor will have enough of a mandate to push through much needed economic reforms.
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While the outlook for international real estate securities remains positive for the next twelve months, assuming a continued recovery in the global economy, we expect total return performance to be more muted in 2010. Year-to-date in U.S. dollar terms, international real estate securities total returns have meaningfully lagged the performance of their U.S. counterparts and may be due for a bounce in the short-term, particularly if some of the political and fiscal risks can be addressed in the U.K. and Continental Europe. Longer-term we remain positive on the potential for a pick-up in cash flow and dividend growth driven by increased external growth activity and a slow, but steady recovery in underlying space market fundamentals.
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The Real Estate Market in Greece
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Greece’s real estate sector has suffered from the effects of the global economic crisis. Greece’s may yet avoid going into recession - GDP contracted in Q109, but then returned to growth in Q209, according to Eurostat. The economy continues to improve. The Consumer Confidence indicator and the Economic Sentiment index, compiled by the Bank of Greece Eurosystem Economic Research Department (EERD), have both been on the increase, especially since the end of Q309 - when it recovered from a low point in late-2008 and early-2009.The residential property market has held up relatively well through most of 2008, but prices have drifted downwards in 2009. The decline is expected to turn around as the Greek economy recovers. The Greek housing market is largely resistant to global trends, given the high level of direct property ownership and
Executive & Marketing Business Plan AB HELLIOTI Limited Strictly Private and Confidential
Presented by Mr Mark G Paterson, mgp & Associates (A division of Lynx Management Services UK Limited)
www.markgpassociates.com
A division of Lynx Management Services UK Limited
Internal Reference: AB HELLIOTI Property Development Executive & Marketing Business Plan Date: 2010-11-06 Page 12 of 39 Strictly Private & Confidential
high real estate transaction costs. Greece has avoided a house price bubble, but it is not seen as an attractive market for residential property investment when compared to some other countries. Commercial real estate markets have been hit harder by the global financial crisis. Office rents in Athens fell by 16% year-on-year (y-o-y) in Q209, according to CBRE. Continued weakening of demand is likely to put downward pressure on prices, which are likely to fall further before recovering.
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In the office rental sector, average rents are expected to continue to soften into 2010, and then gradually to rise to a level around those experienced in 2008 by 2014.
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The retail property sector has been hard hit - retail rents fell by 24.6% y-o-y in Q209. However, retail trade is improving, especially since October, according to the Bank of Greece’s Eurosystem Economic Research Department.
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Industrial property is likely to see a slow recovery, with further corrections in the short-to-medium term. There is likely to be an expansion of third-party logistics providers. The demand for commercial property will be driven by such factors as improving infrastructure throughout the country, and assisted by the strategic position of Greece - the juncture of Europe, Asia, and Africa.
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The Greek Construction Sector
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The Greek construction market doubled over 1997-03 to reach €13.6bn or 9% of Greece's GDP, fuelled by funding from the EU, two big BOOT (build/own/operate/transfer) projects and the significant works for the Olympic Games.
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However, 2004 and 2005 proved tough for Greek contractors, with the domestic market shrinking by €3bn or 22%, with the leading contractors seeing a 50% decline in their construction-related net profits. The downturn was a result of the Olympic effect, but also the delays in the award and execution of public works following the change in government in April 2004. This was combined with a new award method for public works and legal issues over conflicts of interest on the ownership of construction and media assets (resolved with EU intervention in early 2005).
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3.3.1 Major Construction Companies in Greece The strategy of the major Construction Companies in Greece is developed around three basic axes:
Provision of integrated services that cover the entire range of activities of the infrastructure projects, including development, construction, operation and management.
Executive & Marketing Business Plan AB HELLIOTI Limited Strictly Private and Confidential
Presented by Mr Mark G Paterson, mgp & Associates (A division of Lynx Management Services UK Limited)
www.markgpassociates.com
A division of Lynx Management Services UK Limited
Internal Reference: AB HELLIOTI Property Development Executive & Marketing Business Plan Date: 2010-11-06 Page 13 of 39 Strictly Private & Confidential
Expansion in the Southeastern and Middle East markets, which present significant financial volume and great development potentials.
Development in fields such as the Renewable Energy Sources and the Environment that present significant growth rates and high profitability.
The Companies resources for achieving their strategic goals are: Extensive experience and know-how in its fields of activity
Competent and specialized human capital
Trust enjoyed by customers, associates and shareholders
Robust capital structure
Innovative action in terms of market development (market shapers)
Dedication to the Group’s fundamental principles
Provision of reliable services
Continuous growth that creates value for the shareholders
Progress for the local societies in which it is active
Creation of a financially strong organization capable of leading and supporting major development projects
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Executive & Marketing Business Plan AB HELLIOTI Limited Strictly Private and Confidential
Presented by Mr Mark G Paterson, mgp & Associates (A division of Lynx Management Services UK Limited)
www.markgpassociates.com
A division of Lynx Management Services UK Limited
Internal Reference: AB HELLIOTI Property Development Executive & Marketing Business Plan Date: 2010-11-06 Page 14 of 39 Strictly Private & Confidential
3.3.2 Construction To a great extent the Greek Construction Companies took maximum advantage of the opportunities that resulted from the spectacular growth of construction operations in Greece during the past years, which were boosted by the major infrastructure projects of the 3rd EU Community Support Framework and the Olympic Games projects. After the completion of these projects, the growth of the domestic Construction sector was held back by several factors, such as delays in the tenders of several public projects and changes in the way these were awarded. Despite the adverse conditions, the major Groups maintained their leading position and financial robustness and await a significant increase in Greek operations through the new co-financed projects that have been scheduled and other public projects. At the same time, the Groups strategic planning in the construction sector which includes opening up to new foreign markets is being materialized at a steady pace with an expansion of the Groups activities to Southeastern Europe and the Middle East. Some of them have already undertaken the construction of significant infrastructure projects in these developing markets.
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As a result, approximately 40% of the current backlog of projects in construction activities is traced abroad. The countries in which the companies have established presence and currently execute projects are mostly in the Middle East (Oman, Kuwait, Dubai, Libya, Qatar et.al.) and in the Balkans (Romania Bulgaria, Albania FYROM).
M A 3.3.3 Infrastructure Projects X E R FO
In the public sector, among significant infrastructure development projects in Greece, are the construction of Attiki Odos and the Rio-Antirio Bridge; milestone projects in Greece’s history of co-financed projects. Attiki Odos (Budget EUR 1.3 billion) is one of the longest ring roads in Europe, with a total length of 65.2 kilometers. It was built by a joint venture of Greek companies. The Rio-Antirio bridge (budget EUR 0.6 billion) is one of the largest cable-stayed bridges in the world with a total length of 2,883 meters; it was an innovative project and a challenge for the technical world due to the rare combination of adverse conditions that make up the natural environment, such as the great depth of the foundations, low seabed tolerances, strong seismic activity and tectonic plate movement. Other major projects are: •
ATHENS METRO
•
Egnatia Odos Motorway, which is the main road axis that connects Western to Eastern Greece and the Balkans.
Executive & Marketing Business Plan AB HELLIOTI Limited Strictly Private and Confidential
Presented by Mr Mark G Paterson, mgp & Associates (A division of Lynx Management Services UK Limited)
www.markgpassociates.com
A division of Lynx Management Services UK Limited
Internal Reference: AB HELLIOTI Property Development Executive & Marketing Business Plan Date: 2010-11-06 Page 15 of 39 Strictly Private & Confidential
•
PATHE motorway connecting South and North Greece
•
Railroad refurbishment and expansion projects for the Hellenic Railways Organization (OSE) network
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Dams, Bridges, Ports and other infrastructure projects
3.3.4 Olympic Projects
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A great number of Mega projects have been constructed for the Olympic Games. In particular: •
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the Olympic Sport Complex of Athens (OAKA),
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the construction of the International Broadcasting Centre (IBC),
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the Ministry of Labour facilities in the area of the Olympic Village,
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the Suburban Railroad from the Acharnes Transportation Centre to the Athens international airport ‘Eleftherios Venizelos’,
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the extension of Athens Metro
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Access Improvements around ΟΑΚΑ, coverage of part of the River Kifissos for the construction of motorway,
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the extension of Kimis Avenue from the Highway to the Olympic Village and the upgrading of the traffic lights system in the greater Athens area.
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the construction of the Outdoor and Indoor Swimming Pool, the Indoor Sports Centre and the landscaping of the area around OAKA.
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the Olympic Stadium roof according to the design of Architect-Civil Engineer Santiago Calatrava,
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the construction of the Agora as well as various projects related to the Opening and Closing ceremonies of the Olympic Games.
Executive & Marketing Business Plan AB HELLIOTI Limited Strictly Private and Confidential
Presented by Mr Mark G Paterson, mgp & Associates (A division of Lynx Management Services UK Limited)
www.markgpassociates.com
A division of Lynx Management Services UK Limited
Internal Reference: AB HELLIOTI Property Development Executive & Marketing Business Plan Date: 2010-11-06 Page 16 of 39 Strictly Private & Confidential
3.3.5 Building Projects •
office buildings, industrial units, commercial and convention centers, hotels, hospitals, sport facilities, underground parking stations
•
the ‘Olympic Village’ and the modern house settlement ‘Lofos Edison Pallini’ in Pallini, Attica, which was used during the Athens Olympic Games as the ‘Press Village’ for the accommodation of approximately 1,600 journalists.
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modern hotel units with high architectural aesthetics, among others the refurbishment of the Hilton Hotel in Athens and the construction of the Hyatt Regency Hotel in Thessaloniki.
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•
significant Office and Administration Building projects, such as the state-ofthe-art buildings of the Bank of Greece and Intrasoft,
•
industrial buildings and warehouses such as the new facilities of Halyvourgiki in Eleusina and the warehouses of TITAN at their plant in Thessaloniki.
•
shopping centers, supermarkets and stores such as the first IKEA store in Athens and the Carrefour shopping centre on Athinon Avenue.
•
cultural centers, it has undertaken among others, (Athens Concert Hall and the full refurbishment of the historical building of Moni Lazariston in Thessaloniki).
S E S
DO
NO
O P R
PU
Today, Greek Construction Companies have undertaken a significant number of construction projects, abroad the key project being the construction of Blue City 1st phase (budget EUR0.8 billion) in Oman by ΑΕCO DEVELOPMENT LLC OMAN which is a 50% subsidiary company of ELLINIKI TECHNODOMIKI TEB, the other 50% being owned by ΕΝΚΑ INSAAT VE SANAYI of Turkey. This phase includes the construction of 5,000 residences, hotels, shopping centers, sport facilities and other infrastructure projects.
E L P
R
FO
M A EX
Executive & Marketing Business Plan AB HELLIOTI Limited Strictly Private and Confidential
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3.3.6 Electromechanical, Industrial & Environmental Projects The significant presence in building and infrastructure projects is complemented by some Companies extensive experience and expertise in Electromechanical and Industrial projects. The Companies well-organized Electromechanical Department and experienced technical personnel, allows it to undertake the execution of complex electromechanical projects, offering a wide range of innovative services and integrated implementation solutions.
CO
! Y P
Some of the most significant projects that have been constructed in this sector are Gas Metering Stations (Public Gas Corporation - DEPA), the expansion and Automation of the Loading Station (Hellenic Petroleum), the extension of the central Control tower of the Aspropirgos Refineries (Hellenic Petroleum), as well as the electromechanical installations of the Athens METRO, Attiki Odos and Kakia Skala. In the Environmental projects field, the companies have accumulated experience and know-how in wastewater treatment, urban and special waste management projects in our country, whereas they provide integrated services for the entire range of operations from design to project management.
S E S
DO
NO
T
One of the most important projects in this field is the design and construction of the wastewater treatment plant in Psyttalia (budget EUR 0.3 billion). Furthermore, companies specialize in landscaping and planting works as well as landscape restoration projects.
3.3.7 Concessions
O P R
PU
Major Greek Construction Companies playing a leader role in the Concessions sector in Greece by participating in the biggest Concessions projects that are being currently carried out in the country and by having excellent know-how and vast experience that cover the entire range of activities, usually required in a concessions contract: financing (investment), lending, construction, maintenance, operation and exploitation.
E L P
R
FO
M A EX
The Concessions business units of the companies include both Concessions projects as well as Public – Private Partnership projects. The concessions sector offers a significant development prospect for the companies plays a twofold role: supports construction by guaranteeing significant short-term construction volume and also creates a steady, long-term dividend flow contributing thus to the long term creation of profitability and increased value for the Company. Concessions serve as a link between the Companies activities and strategy with the view of providing a complete range of services that include development, construction, operation and management of infrastructures, taking advantage of the knowhow and skills gained by virtually all the other activities in terms of technical development.
Executive & Marketing Business Plan AB HELLIOTI Limited Strictly Private and Confidential
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3.3.7.1
Road projects The two biggest road concession projects currently under operation in which ELLINIKI TECHNODOMIKI TEB participates are Attiki Odos and the RioAntirio Bridge. Attiki Odos constitutes a milestone-project for the Group, considering that it is one of the biggest cofinanced infrastructure projects in Europe. Due to the large number of authorities participating, Attiki Odos was considered, internationally, as one of the most difficult projects in terms of financing. The Group was the leader of the construction joint venture and participates with a majority percentage in the concession and operation companies, whereas the participation of Pantechniki’s taken into account, the Group will have a 59.3% share of Attiki Odos S.A. The artful construction and operation of the largest road network in Attica proves the Group’s successful response to the execution and operation of complex and, at the same time, technologically demanding projects.
DO
NO
T
CO
! Y P
The Rio-Antirio Bridge construction project was another major challenge to the Group due to the adverse conditions that affected its construction. Besides the concession company, the Group also participates in the company that has undertaken the operation of the Bridge.
S E S
O P R
Adding Pantechniki’s participation share, the Group will own 20.7% of Gefyra S.A. The Group’s significant potential is also displayed by the acquisition of a major share in the new co-financed projects that are awarded lately and concern the privatization of all main road axes of the country. ELLINIKI TECHNODOMIKI TEB, as a leading member of the respective agents, has already signed the concession contract (design, construction, operation, maintenance and exploitation) of the Submerged Tunnel in Thessaloniki of a total investment of EUR 470 million, the concession contract for the Corinthos- Tripoli-Kalamata motorway along with the Lefktro-Sparti Branch Motorway of a total investment of EUR 1.05 billion the consession contract of the PATHE Maliakos-Klidi road sections, of a total budget of EUR 1.15 billion, as well as the concession contract for the Elefsina-Korinthos-Patras-PirgosTsakona motorway of a total investment of approximately EUR 2.8 billion.
E L P
R
FO
M A EX
PU
Other types of concession projects include parking stations, service stations, marinas, buildings etc.
3.3.8 Energy and Environment The Environment and Renewable Energy Sources sector are one of the most rapidlydeveloping lines of activity for the Greek Companies with a continuously growing contribution to revenues and profits. By taking advantage of the new opportunities that resulted from the deregulation of the energy market, the companies are developing a wide range of activities in the power generation sector both from conventional and renewable sources. They have obtained power generation licenses for natural gas combined-cycle power plants of 440MW capacity in Kavala, 390 MW capacity in Boeotia and 135 MW capacity in Rhodes. Moreover, an example of the ELLINIKI TECHNODOMIKI Group great Executive & Marketing Business Plan AB HELLIOTI Limited Strictly Private and Confidential
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A division of Lynx Management Services UK Limited
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interest in power generation is the participation in a tender for the operation of the lignite mines of Vevi in cooperation with the Mytilineos Group. It is a strategic move, on the part of the Group, in a sector of significant importance for the satisfaction of the country’s power needs. Finally, making use of motives regarding the power generation from renewable sources, the Group proceeded with investments in wind parks and power generation plants using biogas. The Group is currently operating wind parks with 30 MW total power capacity and plants using biogas produced at the Athens and Thessaloniki landfills with a total power capacity of 30 MW, one of the biggest in Europe.
! Y P
Moreover, wind parks with a power capacity of over 100 MW are under construction and will be operating within the next two years, whereas the Group also owns building permits for wind parks of over 200 MW.
T
CO
In the Environmental sector, the Group –through its subsidiary HELECTOR– occupies a leading position in Greece and Cyprus in waste management issues as well as in the construction and operation of Landfills, wind parks and biogas power plants.
DO
NO
With the takeover of the HERHOF company in Germany, the Group gained access to a worldwide unique technology for recycling unsorted municipal waste (technology for the production of ‘dry stabilat’), which makes the Group a global player in a sector with significant growth potential. It must be noted that the Group, through HELECTOR, gained access to the latest international technological developments which permitted constant improvement of its competitiveness and development of new synergies with the most accredited companies and organizations in its fields of activity.
S E S
O P R
PU
Convinced that this sector will have rapid growth and will create great value, the Group has made significant investments in the past years, whose output has already become evident.
E L P
R
FO
M A EX
The Group’s overall strategy is focused on providing environmentally friendly waste management solutions covering the entire range of available methods. Currently these include services that range from the construction and operation of landfills in countries Executive & Marketing Business Plan AB HELLIOTI Limited Strictly Private and Confidential
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A division of Lynx Management Services UK Limited
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showing little awareness and familiarization as to environmental issues to the provision of advanced recycling solutions and waste treatment that are already being implemented in environmentally advanced European countries which will be gradually implemented by the former countries as well. At the same time, the utilization of recycled products to produce energy or commercially, is of strategic importance.
3.3.9 Real Estate and Other Holdings
! Y P
Major Greek Construction Companies are recently active in the field of Real Estate development, through their subsidiary companies, providing specialized development consulting services ranging from planning to management of real estate investments. In particular, the Companies strategy focuses on the development of recreation centers, shopping centers, housing complexes, offices and mixed-use projects. Companies also envisaging the development opportunities presented in certain fields of activity have made medium to long-term investments by taking at the same time advantage of their potential to the purpose of creating value for its shareholders. (e.g. management of tourist and leisure facilities, Telecommunications infrastructures, mining etc.)
3.4
Land/Property Details
S E 3.4.1 Land Development Location S O P R 3.4.2 Land DevelopmentU Details P E L P M A X E 3.4.3 Land Development Title R FO
DO
NO
T
CO
Located in Koropi City, Athens, Greece, Airport El. Venizelos, 2 kilometres from El. Venizelos, 24 kilometres from Athens, 15 kilometres from beach
Three locations are presented as follows: Address 1
OT421, STR, TWENTY VALTETSIOU/LAND
Address 2
OT351, STR, SPETSON AND AG.PARASKEYIS.
Address 3
OT111, SQUARE PAPACHRISTOU
The title to the land is held by AB HELLIOTI LIMITED.
3.4.4 Land Development Permits/Regulations Address 1
LAND PERMIT: 0050459013
Address 2
LAND PERMIT: 0050459015
Address 3
LAND PERMIT: 0050459014
Executive & Marketing Business Plan AB HELLIOTI Limited Strictly Private and Confidential
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3.4.5 Property Details Property in Agia Marina, Attica; Greece Property’s address:
Alkyonidon street, in “Alykos” site of Agia Marina Koropiou, Municipality of Kropias Attica; Greece
Property’s total size:
640 sq.m within a plot of land with a total size of 2.665sq.m.
! Y P
The respective property is situated in the southern suburbs of Athens Greece and more specifically in Agia Marina, just 100 meters from sandy beach enjoying spectacular and unobstructed (180 degrees) sea-view.
S E S
O P R
E L P
R
FO
PU
M A EX
T
CO
Agia Marina forms part of the Municipality of Kropias Attica and is easily accessible by the Souniou Avenue (4 lanes- two each side) that runs across the coast line from the cosmopolitan Vouliagmeni area up until the ancient ruins at Cape Sounio. Furthermore, it is only 12 minutes driving distance from Athens International Airport and 40 minutes from the centre of Athens (via the Attiki Odos motorway).
DO
NO
Agia Marina is a drastically growing area that due to its position - lying on one of the most beautiful and unspoiled spots of the Attica Riviera - is currently viewed as an ideal proposal for investment either on residential property or land, with impressive potential for significant profit for the next 5 years.
The property comprises a 3 floor building with a total floor area of approximately 650sq.m. developed in a plot of land with a total size of 2.665sq.m(1.600sq.m. of the latter were utilized for the development of the building). The building comprises two almost symmetrical semi-detached maisonettes and 3 apartments with immediate access to the garden. All materials used for the construction, fitting and decoration are luxurious and of fine quality. Due to the slight slope of the terrain, the east side of the building could be viewed as a two floor building (providing ground-floor entrances to the maisonettes), while the west side of the building (with face to the sea) reveals its’ real size and the actual additional floor beneath the maisonettes where the apartments are developed. With reference to the maisonettes, each of them has a total floor area of 180sq.m, with 96sq.m. in the ground-floor and the remaining 84sq.m. in the first floor. The ground floor includes a large lounge, a dinning area, a spacious kitchen and a w.c. as well as a storage area under the staircase that leads to the first floor. On the first floor there is a master en-suite bedroom as well as two more bedrooms and a large full bathroom. All
Executive & Marketing Business Plan AB HELLIOTI Limited Strictly Private and Confidential
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bedrooms enjoy spectacular sea view and have immediate access to extremely large verandas. All floors are marble paved with the exception of the bedrooms and bathrooms that are wooden floored and tiled respectively. Right opposite the main entrances of the maisonettes there is a parking area capable in comfortably accommodating more than 4 cars at the same time. All three apartments are on the same floor, one level below the maisonettes - due to the slight slope of the terrain in the area as per the plans are considered as basements, albeit in practice they are at the level of the garden-, enjoying plenty of light and unobstructed seaview.
CO
! Y P
The apartment on the north side of the building, has a floor area of approximately 140sq.m. and consists of a spacious lounge-dinning area, kitchen, 3 bedrooms (1 master en-suite) a bathroom and a w.c.
S E S
DO
NO
T
O P R
E L P
PU
Furthermore, adjacent to the latter, there is an apartment of 85sq.m. including an open space kitchen-lounge-dinning area, 2 bedrooms and a bathroom. On the south side of the building there is a studio of approximately 55sq.m comprising an open kitchen-lounge area and one bedroom with bathroom.
R
FO
M A EX
All apartments have independent storage areas, large verandas with immediate access to a large garden and are currently rented. A fully equipped covered BBQ area as well as a separate room housing a water well (and related installations) that accommodates all water requirements for the plants and grass of the garden (making significant savings in water bills), as well as a room at the basement housing all installations for the central heating of the building, complete the description of the respective property.
Executive & Marketing Business Plan AB HELLIOTI Limited Strictly Private and Confidential
Presented by Mr Mark G Paterson, mgp & Associates (A division of Lynx Management Services UK Limited)
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3.5
The Greek Economy
S E S
DO
NO
T
CO
! Y P
The economy of Greece is the twenty-seventh largest economy in the world by nominal gross domestic product (GDP) and the thirty-third largest by purchasing power parity, according to the data given by the International Monetary Fund for the year 2008. Its GDP per capita is the twenty-seventh highest in the world, while its GDP PPP per capita is the twenty-sixth highest.
O P R
Greece is a member of the OECD, the World Trade Organization, the Black Sea Economic Cooperation, the European Union and the Eurozone.
E L P
PU
The Greek economy is a developed economy with the public sector accounting for about 40% of GDP. The service sector contributes 75.7% of the total GDP, industry 20.6% and agriculture 3.7%. Greece is the twenty-fourth most globalized country in the world and is classified as a high income economy.
M A EX
Greece is a developed country, with a high standard of living and "very high" Human Development th nd Index, ranking 25 in the world in 2007,and 22 on The Economist's 2005 worldwide quality-of-life index. According to Eurostat data, GDP per inhabitant in purchasing power standards (PPS) stood at 95 per cent of the EU average in 2008.
R
FO
Greece's main industries are tourism, shipping, industrial products, food and tobacco processing, textiles, chemicals, metal products, mining and petroleum. Greece's GDP growth has also, as an average, since the early 1990s been higher than the EU average. However, the Greek economy also faces significant problems, including rising unemployment levels, [16] an inefficient government bureaucracy and widespread corruption. In 2009, Greece had the EU's second lowest Index of Economic Freedom (after Poland), ranking 81 in the world The country suffers from high levels of political and economic corruption and low global competitiveness relative to its EU partners.
st
Although remaining above the euro area average, economic growth turned negative in 2009 for the first time since 1993 An indication of the trend of over-lending in recent years is the fact that the ratio of loans to savings exceeded 100% during the first half of the year. Executive & Marketing Business Plan AB HELLIOTI Limited Strictly Private and Confidential
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By the end of 2009, as a result of a combination of international (financial crisis) and local (uncontrolled spending prior to the October 2009 national elections) factors, the Greek economy faced its most severe crisis after 1993, with the highest budget deficit (although close to those of Ireland and the UK) as well as the second highest debt to GDP ratio in the EU. The 2009 budget deficit stood at 12.7% of GDP. This, and rising debt levels (113% of GDP in 2009) lead to rising borrowing costs, resulting in a severe economic crisis.Greece tried to cover up the extent of its massive budget deficit in the wake of global financial crisis.
NO
T
CO
! Y P
The Greek labor force totals 4.9 million, and it is the second most industrious between OECD countries, after South Korea. The Groningen Growth & Development Centre has published a poll revealing that between 1995 and 2005.
S E S
DO
Greece was the country with the largest work/hour ratio among European nations; Greeks worked an average of 1,900 hours per year, followed by the Spanish (average of 1,800 hours/year).
O P R
In the first weeks of 2010 there was a renewed anxiety about the excessive levels of debt in Greece.
PU
Some European think-tanks such as the CEE Council have argued that the predicament some Mainland EU countries find themselves in today is the result of a decade of debt-fueled Keynesian economic policies pursued by local policy makers and complacent EU central bankers. Many economists have recommended the imposition of a battery of corrective policies to control public debt, such as drastic austerity measures and substantially higher taxes.
E L P
M A EX
Some senior German policy makers went as far as to say that emergency bailouts should bring harsh penalties to EU aid recipients such as Greece or Ireland. Although there has been harsh criticism against speculators manipulating markets: Angela Merkel has stated that "institutions bailed out with public funds are exploiting the budget crisis in Greece and elsewhere"
R
FO
The shipping industry is a key element of Greek economic activity dating back to ancient times.
[27]
Today, shipping is one of the country's most important industries. It accounts for 4.5% of GDP, employs about 160,000 people (4% of the workforce), and represents 1/3 of the country's trade deficit. During the 1960s, the size of the Greek fleet nearly doubled, primarily through the investment undertaken by the shipping magnates Onassis and Niarchos. The basis of the modern Greek maritime industry was formed after World War II when Greek shipping businessmen were able to amass surplus ships sold to them by the United States Government through the Ship Sales Act of the 1940s. According to the BTS, the Greek-owned maritime fleet is today the largest in the world, with 3,079 vessels accounting for 18% of the world's fleet capacity (making it the largest of any other country) with a total dwt of 141,931 thousand. In terms of ship categories, Greece ranks first in both tankers and dry bulk carriers, fourth in the number of container ships, and fourth in other ships. However, today's fleet roster is smaller than an all-time high of 5,000 ships in the late 1970s
Executive & Marketing Business Plan AB HELLIOTI Limited Strictly Private and Confidential
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According to a survey conducted in China in 2005, Greece was voted as the Chinese people's number one choice as a tourist destination and 6,088,287 tourists visited only the city of Athens, the capital city. In November 2006, Austria, like China, announced that Greece was the favourite destination.
3.6
Partnerships The construction project will be managed by AB Hellioti Limited in partnership with Mr. George Paraskevopoulos, Architecht N.T.U.A and the construction company Managoudis Limited as well as Mr Nikolaos Dimitriou Andrianakos.
3.7
Target Market
S E S
DO
NO
T
CO
! Y P
O P R
E L P
PU
M A EX
The strategy for the Attica region is targeting towards the “Establishment of the Attica Region” as an international entrepreneurship centre, enhancement of the extroversion of the local system of production and accommodation of the attractiveness of foreign investments through the encouragement of innovation, entrepreneurship, research and technology and the diffusion of new technologies.
R
FO
The regional operational plan includes interventions which serve the enhancement of Research and Technology, as well as, the diffusion of its results to the enterprises of the Region, the reinforcement of innovation, the better utilization of Communications and Information Technologies from business, the reinforcement of entrepreneurship, the improvement of the competitive position of the Region’s Media, the upgrade of the tourist services and the enrichment of the regional tourist product, the increase of productive investments and the flow of Foreign Direct Investments, the energy production from Renewable Energy Resources and the reinforcement of the institutional productive – entrepreneurial environment. Scheduled policies of the specific Axis incorporate the regional dimension and are being implemented in the Region in a coherent manner, contributing to the formation of discrete, viable and extroversive competitive advantages.
Executive & Marketing Business Plan AB HELLIOTI Limited Strictly Private and Confidential
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The implementation of the Axis interventions connects also with accompanying simplification interventions of the entrepreneurial environment (in all sectors), encountering of the size of enterprises, deepening of the single economic market, consumer’s protection, sustainable management of the environment etc.
3.8
Greece Retail Snapshot Following a period of economic uncertainty and concerns over the state of Greek government finances government’s fiscal crisis, prospects for the retail market in the short term are weak, with confidence having been hit in most sectors. However, overall retail sales growth has improved recently. According to the latest official data, retail sales volume for January increased by 5.4% on a year earlier. The strongest increase is seen in books and stationery (12.8%), pharmaceutical products and cosmetics (11.2%), food, beverages and tobacco (5.7%) whilst department store is the only sector that is in the negative territory.
3.8.1 Occupier Focus
DO
NO
T
CO
! Y P
Whilst European Council form an agreement to safeguard Greek public finances in March, the financial state of the country continued to fuel anxiety throughout the retail market, with many retailers remain cautious about their expansion plans. Those companies that are still considering expansion plans are very selective and cautious. Supply of high street shops has constantly increased which has pushed prime rental prices down for an average of 17% over the year to March. Shopping centres in general are more resilient than high streets, however falling rents have been reported over the last 12 months.
S E S
PU
3.8.2 Investment Focus
E L P
O P R
The lack of cash liquidity and the limited number of loans given by the banks have caused a fall in investment activities in so far. The current fiscal situation will clearly act as a haul on economic growth over the next year or so which may act as an obstacle for the investment market to return to the pre-crisis level.
M A EX
3.8.3 Outlook
R
FO
It remains the case that many domestic investors are holding a more pessimistic view of the Greek market than international investors. In terms of development, aside from the economic crisis, archaeological and zoning problems do exist and can cause delays in the development pipeline.
3.8.4 Market Activity H&M leased a high street unit of 960sq.m in Patras, ELC leased a high street unit of 500 sq.m in Halandri, Athens. Carpiza leased 137 sq.m in a shopping centre in Thessaloniki. Porsche Design leased a high street unit in Kolonaki, Athens.
3.8.5 Market Outlook
Prime Rents - Prime rents are under pressure. Prime Yields - Signs of stabilizing for shopping centre. Supply - Increasing supply in part of the market. Demand - Greater caution due to the financial state of Greece.
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3.8.6 Prime Retail Rents (data from March 2010)
High Street Shops
Euro sq/m per month
Euro sq/m per year
Compound Compound (p.a) % 5yr (p.a) % 1yr
Kolonami-Tsakalof
150
1,800
226
(3.6)
Athens-Ermou
230
2,760
347
0.9
Glyfada-Metaxa
150
1,800
226
n/a
Kifisia-Kolokotroni
150
1,800
226
95
1,140
143
150
1,800
Piraeus-Sotiros Thessaloniki-Tsimiski
3.8.7 Prime Retail Yields
S E S
(data from March 2010)
Kolonami-Tsakalof
O P R
Current Quarter
High Street Shops
DO
Last Quarter
NO
T
226
Last Year
CO
(25.0)
Y!
P
(14.8) (16.7)
n/a
(16.7)
n/a
(13.6)
0.0
(6.3)
10 Year High
10 Year Low
6.50
6.00
5.80
8.00
5.50
6.60
6.00
5.50
8.00
5.00
6.50
6.00
5.80
6.50
5.50
Kifisia-Kolokotroni*
6.50
6.00
5.80
6.50
5.50
Piraeus-Sotiros*
6.80
6.30
6.30
7.00
6.00
Thessaloniki-Tsimiski
6.50
6.20
5.90
7.00
5.75
Shopping Centres
6.50
6.50
6.50
8.00
6.00
Athens-Ermou
E L P
Glyfada-Metaxa*
R
FO
USD sq/ft per year
PU
M A EX
* 4 year record With respect to the yield data provided, in light of the lack of recent comparable market evidence in many areas of Europe and the changing nature of the market and the costs implicit in any transaction, such as financing, these are very much a guide only to indicate the approximate trend and direction of prime initial yield levels and should not be used as a comparable for any particular property or transaction without regard to the specifics of the property.
4. Positioning and Business Strategy The ultimate aim is to provide a solid foundation for the development of the basic competitive and market development strategy. The strategy for the Attica region is targeting towards the “Establishment of the Attica Region” as an international entrepreneurship centre, enhancement of the extroversion of the local system of production and Executive & Marketing Business Plan AB HELLIOTI Limited Strictly Private and Confidential
Presented by Mr Mark G Paterson, mgp & Associates (A division of Lynx Management Services UK Limited)
www.markgpassociates.com
A division of Lynx Management Services UK Limited
Internal Reference: AB HELLIOTI Property Development Executive & Marketing Business Plan Date: 2010-11-06 Page 28 of 39 Strictly Private & Confidential
accommodation of the attractiveness of foreign investments through the encouragement of innovation, entrepreneurship, research and technology and the diffusion of new technologies. The regional operational plan includes interventions which serve the enhancement of Research and Technology, as well as, the diffusion of its results to the enterprises of the Region, the reinforcement of innovation, the better utilization of Communications and Information Technologies from business, the reinforcement of entrepreneurship, the improvement of the competitive position of the Region’s Media, the upgrade of the tourist services and the enrichment of the regional tourist product, the increase of productive investments and the flow of Foreign Direct Investments, the energy production from Renewable Energy Resources and the reinforcement of the institutional productive – entrepreneurial environment.
CO
! Y P
Scheduled policies of the specific Axis incorporate the regional dimension and are being implemented in the Region in a coherent manner, contributing to the formation of discrete, viable and extroversive competitive advantages.
NO
T
The implementation of the Axis interventions connects also with accompanying simplification interventions of the entrepreneurial environment (in all sectors), encountering of the size of enterprises, deepening of the single economic market, consumer’s protection, sustainable management of the environment etc.
4.1
S E S
Market Attractiveness
DO
Already there is a captive market ready to take up this offer of the residential homes to be created, the market is changing from rental properties to the desire to own a property replacing investment plans and pension contributions.
O P R
PU
The local market is interested in a lower cost alternative to bank mortgage financing with interest rates at 4.5% which is too high for most workers to be able to afford to own their own home.
4.2
E L P
A Real Estate Bonanza for Greece?
M A EX
The largest segment of Europe’s population – known as the “baby boomers” – is fast reaching the age of retirement. This army of “baby boomers” is expected to create a series of economic opportunities in the warmer climates of Europe. This baby boomer generation accounts for about 50 million, mostly in the European Union.
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A sizable proportion of these people live in the colder northern European countries, including Germany, Holland, Sweden, Britain, Norway and Belgium. Many of these baby boomers have enjoyed annual holidays in the Mediterranean, have expendable income and can afford to consider a second vacation home in a warmer climate.
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Official statistics on real estate sales in the Mediterranean countries are sketchy. International real estate agents in Spain estimate that 30,000-40,000 properties were sold to people from the UK during 2002. The average unit price for these vacation homes amounted to approximately 175,000 euros, resulting in 5-7 billion euros of direct foreign investment to the benefit of Spain. The purchase of these vacation homes generate a significant local demand for a wide range of goods and services, including consumer goods, food and beverages, medical services, and insurance to name a few. They also contribute to local tax revenues. The Spanish government recognizing the importance of this category of foreign investment has created a special department for this sector, known as “Residential Tourism.” This department encourages new development and promotes the Spanish second home market. Executive & Marketing Business Plan AB HELLIOTI Limited Strictly Private and Confidential
Presented by Mr Mark G Paterson, mgp & Associates (A division of Lynx Management Services UK Limited)
www.markgpassociates.com
A division of Lynx Management Services UK Limited
Internal Reference: AB HELLIOTI Property Development Executive & Marketing Business Plan Date: 2010-11-06 Page 29 of 39 Strictly Private & Confidential
The second home real estate market in the United States as reported by the National Association of Realtors recorded that during 2001, 356,000 second homes were purchased up from 264,000 in 1991. The average price for a second home in the USA is $127,000. What is the potential for Greece?
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During 2002, fewer than 3,000 foreign nationals purchased second home properties in Greece. What is the problem? Is Greece less beautiful than Spain? Is it a less desirable place to live? There are more flights from northern Europe to Spain then Greece and flights are also somewhat less expensive. The airline industry indicates that if the demand for flights to Greece were greater, apart from the summer season, they would offer more flights at lower prices.
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The problem is that the existing supply of residential property in Greece fails to stimulate demand. Existing zoning policies limit residential development outside urban areas and international purchasers are cautious about buying properties that may be out of variance. Zoning laws make it difficult for developers to build small and large scale developments.
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Little effort is made to promote Greek residential properties to the international markets, thus a limited awareness of the market in Greece resulting in less demand.
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What can Greece do to tap into this huge international real estate potential? A strategic plan needs to be developed and implemented which should include legislation to make land available for development, while protecting the environment. The potential economic benefits to this untapped sector would be substantial. If during the next ten years 200,000 new second homes were developed and sold on the international market at an average of 200,000 euros, this would result in approximately 40 billion euros of direct foreign investment. The demand for local goods and services and the contribution to local taxes could also be worth billions of euros per annum. Other countries such as Croatia, Turkey, Egypt and Belgium are trying to develop their residential markets and attract foreign investors. Greece enjoys a major advantage of being an EU country i.e., possessing a lower risk profile, and residency agreements and capital transfer agreements.
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These new markets are very competitive in pricing with some aiming for EU membership in the next few years.
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The opportunity for significant investments into the Greek second home sector is great. For those investors that want to purchase or build a vacation home in Greece, without the assistance of a Greek developer, property consultant, or local attorney, the legal issues can be rife with danger. In Greece there is the “psst you want to buy a house?” syndrome in every village as locals attempt to sell the family jewels to rich tourists. Unfortunately, this route can be complicated and expensive. Land in Greece is often owned by several family members, who may live in different parts of the world – and they all have to agree and sign the purchase contract. Where a number of owners within a family have to sign an agreement to sell this property, it can sometimes take years, as it recently took the Greek government ten years to get the land deeds for a new airport outside Athens. Buyers are also encouraged to examine the authenticity of the house’s earthquake resilience. Sometimes the certificates are more resilient than the house.
Executive & Marketing Business Plan AB HELLIOTI Limited Strictly Private and Confidential
Presented by Mr Mark G Paterson, mgp & Associates (A division of Lynx Management Services UK Limited)
www.markgpassociates.com
A division of Lynx Management Services UK Limited
Internal Reference: AB HELLIOTI Property Development Executive & Marketing Business Plan Date: 2010-11-06 Page 30 of 39 Strictly Private & Confidential
Once you have purchased the land, can you actually build on it? Is it in or out of the village boundary? If outside, it has to be at least 4,000 square meters. You may have received planning permission, but what about the olive trees on the land? Under Greek law you can have clear title to ownership of land but not own the olive trees upon it. This can make building difficult and don’t forget the all important IKA (HKA).
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Purchasing a house or land in a Greek village can be challenging but rewarding if patience and a good local real estate attorney are part of your property consulting team.
4.3
Business Development Strategy
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In order to minimise the risk and maximise the probability of success, the core business will be developed through the following stages:
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4.3.1 Stage 1 - Growth and penetration in the market -
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investigate new partnerships for product growth potential in the market study the development of new product and service offerings and implement core strategies establish the brand name by providing a valuable service. research the market to confirm the potential and confirm/refine the understanding of the client needs. establish a minimal infrastructure raise the capital necessary to cover expansion, development and operating costs. develop the relationship with the government and agencies. explore other possible strategic partnerships. continually develop the ability to compete
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4.3.2 Stage 2 - Expansion/Consolidation/Development -
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continually develop the ability to compete. implement the plans developed in Stage 1. actively expand the market, by: o following up leads o revisiting potential client programmes increase the infrastructure and resources as required by the plan. raise capital as indicated by the plan.
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continually develop the ability to compete. perform a “best in class” benchmarking exercise and study review existing policies and processes against industry norms. develop product offering, technology models and tools
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FO4.3.3 Stage 3 - Further Expansion/Consolidation/Development
Executive & Marketing Business Plan AB HELLIOTI Limited Strictly Private and Confidential
Presented by Mr Mark G Paterson, mgp & Associates (A division of Lynx Management Services UK Limited)
www.markgpassociates.com
A division of Lynx Management Services UK Limited
Internal Reference: AB HELLIOTI Property Development Executive & Marketing Business Plan Date: 2010-11-06 Page 31 of 39 Strictly Private & Confidential
4.4
Business Objectives 4.4.1 Economic To establish the business as a leader in the Real Estate market in Greece.
4.4.2 Financial
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To establish the business as a profitable and financially sustainable organization.
4.4.3 Market
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To be in the driving seat of the industry worldwide, in particular through market development and to establish the business and show continued growth with a structured expansion plan executed within five years.
4.4.4 Employer
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To be the employer of choice recognised for our achievement in creating employment, providing fair rewards and developing skills.
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5. Operational Objectives -
Investigation (Feasibility study within the business) Negotiations Business Plan Business Specifications Technical Specifications Project Plan Project Management Implementation
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E L 6. Financing, Financial P Projections and Plan M A X E 6.1 Funding R FO6.1.1 Project Funding Amount
A strategic financial business plan has been prepared, incorporating a projected profit & loss account, balance sheet and cash flow.
Euros 8,000,000 (Eight Million Euros)
6.1.2 External Funding Requirement 100% funding
6.1.3 Funding Focus The funds will be used for the development and the property construction on the three pieces of land to be developed in Attica near Athens in Greece as well as the purchase and redevelopment of the property in Agia Marina, Koropiou, Kropias Attica
Executive & Marketing Business Plan AB HELLIOTI Limited Strictly Private and Confidential
Presented by Mr Mark G Paterson, mgp & Associates (A division of Lynx Management Services UK Limited)
www.markgpassociates.com
A division of Lynx Management Services UK Limited
Internal Reference: AB HELLIOTI Property Development Executive & Marketing Business Plan Date: 2010-11-06 Page 32 of 39 Strictly Private & Confidential
6.1.4 Borrower Financial Status The borrower is a well established business operating in Athens, Greece for many years with various interests in shipping, land ownership and project development within Greece.
6.1.5 Collateral The land ownership is 80% (Eighty Percent) equity and 20% (Twenty Percent) mortgaged via local bank loans.
6.2
Financing Structure 6.2.1 Allocation of Funding (All figures are reported in Euros.) The investment will incorporate the following.
Description
OT421
OT251
Property
LE
350,000
1,050,000
900,000
2,900,000
200,000
200,000
600,000
50,000
50,000
50,000
150,000
100,000
100,000
100,000
300,000
PU
M A EX
P
200,000
1,700,000
Total estimated project cost :
Total
350,000
1,000,000
Insurance
Agia Marina
1,000,000
350,000
Construction Design and Licensing
OT111
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Land Taxes
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1,700,000
1,600,000
3,000,000
3,000,000
3,000,000
8,000,000
6.2.2 Summary Financial Projections
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(all figures are reported in Euros)
Description
Year 1
Income Cash Flow
Description
Income Cash Flow
Year 2
Nil 3,300,000
Year 6
Year 3
Nil 1,600,000
Year 7
Year 4
2,111,160 2,111,160
Year 8
Year 5
3,984,600
3,984,600
6,095,760
10,080,360
Year 9
Year 10
1,873,440
Nil
Nil
Nil
Nil
10,353,800
8,753,800
7,153,800
5,553,800
3,953,800
Executive & Marketing Business Plan AB HELLIOTI Limited Strictly Private and Confidential
Presented by Mr Mark G Paterson, mgp & Associates (A division of Lynx Management Services UK Limited)
www.markgpassociates.com
A division of Lynx Management Services UK Limited
Internal Reference: AB HELLIOTI Property Development Executive & Marketing Business Plan Date: 2010-11-06 Page 33 of 39 Strictly Private & Confidential
6.2.3 Loan 100% project term loan funding is required for this project Euro 8,000,000 (Eight Million Euros)
6.2.4 Preferred Loan Interest Rate 5% annual interest rate fixed for the term of the loan.
6.2.5 Preferred Loan Term
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Ten years with a moratorium of five years, principal repayment carried out in equal installments over years 6 to 10 inclusive.
6.2.6 Principles
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The main underlying factor in raising the finance for this venture relates to the formation of a reasonable financing structure and attractive interest rate based on the current levels in the global market.
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7. SWOT Analysis 7.1
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Infrastructure and Service Demand 7.1.1
Strengths
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Infrastructure planning Development review processes Current Technology Plan Replacement program for certain equipment (vehicles, radios, computers)
7.1.2
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7.1.3
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Weaknesses Deterioration of older neighborhoods Right of way management Recreation facilities development Street, plant, and utility line repair, maintenance, and replacement Consistent facility and equipment preventative maintenance Outdated financial and telecommunication software/hardware Public space beautification Outdoor warning system Water distribution during peaks Program impact analysis
Opportunities Private development of infrastructure Expansion of municipal facilities Transit planning Housing programs Enhanced technology based service delivery
Executive & Marketing Business Plan AB HELLIOTI Limited Strictly Private and Confidential
Presented by Mr Mark G Paterson, mgp & Associates (A division of Lynx Management Services UK Limited)
www.markgpassociates.com
A division of Lynx Management Services UK Limited
Internal Reference: AB HELLIOTI Property Development Executive & Marketing Business Plan Date: 2010-11-06 Page 34 of 39 Strictly Private & Confidential
Benchmarking for best practices Solid waste collection services
7.1.4
Threats Deteriorating levels of service due to increasing demand Future water supply Technology failures Traffic congestion Disasters (natural, terrorism) Increased crime rates
7.2
People and Competencies 7.2.1
Strengths
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Staff stability/continuity at management level Dedicated staff Benefits package Good to excellent customer satisfaction rankings Experienced technically proficient staff Interdepartmental cooperation/teamwork Strong human resource systems qualified and experienced management team
7.2.2
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Weaknesses
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Turnover and recruitment due to economic conditions Structured public safety fitness program Private sector competition for employees
7.2.3
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Opportunities
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Targeted training programs Outsourcing training (community colleges, etc.) Volunteer utilization Childcare options and benefits Telecommuting and job sharing Enhanced reward and recognition
Threats Noncompetitive compensation system (private and public sector) State and Federal mandates Inability to invest in training
7.3
Political and Social 7.3.1
Strengths Political stability Documented community history and legacy Board(s)/staff interaction
Executive & Marketing Business Plan AB HELLIOTI Limited Strictly Private and Confidential
Presented by Mr Mark G Paterson, mgp & Associates (A division of Lynx Management Services UK Limited)
www.markgpassociates.com
A division of Lynx Management Services UK Limited
Internal Reference: AB HELLIOTI Property Development Executive & Marketing Business Plan Date: 2010-11-06 Page 35 of 39 Strictly Private & Confidential
High feelings of community safety and security Strong school system Expanding hospital system Positive Council/Staff relations
7.3.2
Weaknesses Public perception of government Unrealistic/undefined customer expectations Customer feedback systems Vocal interests have greater influence Inter-jurisdictional collaboration Not able to fulfill all community communication needs Marketing/Image Lack of public involvement
7.3.3
Opportunities
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Collaborative public processes/public participation Enhance public education/marketing activities Board member development Legislative initiatives Joint City/Visitor’s Bureau marketing efforts Enhanced customer satisfaction measurement tools
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7.3.4
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Threats
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Changing demographics Short term political perspectives Legislative mandates Political instability Perception of existing residents Landfill expansions
M A EX and Financial 7.4 Economic R FO7.4.1 Strengths
Fiscally conservative Favorable economic conditions Diverse economic base Low/competitive tax rate Economic incentive programs Workers Compensation/Liability program cost controls Revenue forecasting Geographic location Inter-local cooperation for roadway construction projects
Executive & Marketing Business Plan AB HELLIOTI Limited Strictly Private and Confidential
Presented by Mr Mark G Paterson, mgp & Associates (A division of Lynx Management Services UK Limited)
www.markgpassociates.com
A division of Lynx Management Services UK Limited
Internal Reference: AB HELLIOTI Property Development Executive & Marketing Business Plan Date: 2010-11-06 Page 36 of 39 Strictly Private & Confidential
7.4.2
Weaknesses Low single family land availability Re-development of vacated properties and facilities
7.4.3
Opportunities Maximize replacement fund Privatization Advertising on publications/programs/web Focused, targeted business recruitment Electric Aggregation Energy conservation programs Increase bond rating Annexations “Block” water/sewer rate structure
7.4.4
Threats
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Infrastructure financing Service demand growth/costs (effects on budget) Transit financing Build-out limitations Sales tax decline Unfunded mandates Cost of embedded debt in annexations
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U P 8. Qualities and Motivation E L P M A EX R FO
Koropi City is now in a status of progressive development due to its proximity to Athens. New habitants are settling down every year. This flow from Athens has changed the city’s social structure. Young couples and immigrants have made their appearance in the area. This fact has influenced both the unemployment rate and the income per capita. The percentage of settled immigrants in Koropi reaches almost 10% of the population. Koropi is a suburb in the eastern part of Athens, Greece. It is the seat of the municipality of Kropia, with about 50.000 inhabitants. The Hymettus mountain is to the west. Attiki Odos runs to the east, with a new, extensive network of roads connecting it to the 2-lane Vari-Koropi Road, the Lavrion and Sounion Avenues near Markopoulo, and the Eleftherios Venizelos Airport.
Executive & Marketing Business Plan AB HELLIOTI Limited Strictly Private and Confidential
Presented by Mr Mark G Paterson, mgp & Associates (A division of Lynx Management Services UK Limited)
www.markgpassociates.com
A division of Lynx Management Services UK Limited
Internal Reference: AB HELLIOTI Property Development Executive & Marketing Business Plan Date: 2010-11-06 Page 37 of 39 Strictly Private & Confidential
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The development of the city was influenced by the construction of the new international airport “Eleftherios Venizelos”, the construction of Attiki Odos (which is the basic axis from Athens to the airport) and the function of the suburban. This fact combined with the proximity to Athens has offered the area an additional privilege. The last 10 years, there has been occurred a great increase in the economic development. New enterprises have settled down and the existence of an industrial park has altered the structure of economy. Koropi local authorities’ ambition is to turn the city into a regional transport hub and a sustainable industrialized area.
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Koropi is agriculturally famous for its main production of vineyards and olives. Except from the production of basic agricultural products, the residents of Koropi have been occupied in farming. In the 90s, the population has turned to services.
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The last 10 years, there has been occurred a significant change in terms of economic growth. Several enterprises have settled in the district. Their appearance has influenced the economic activities. The main agricultural activities have been displaced from second sector activities, but also there has been occurred a horizontal mobility of employees.
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Nowadays, most of the biggest Greek enterprises are established in Koropi and employ thousands of employees. Third sector services (public services, health, engineers, commercial and financial services, etc.) Significant secondary sector. Significant primary sector: agricultures, especially grapes and greenhouse cultures.There are many indications of this flourishing during the last years. (Local GDP has increased, new jobs have been created and new enterprises have made their appearance etc.). Particularly, Koropi is characterised by a rapid increase in industry and handicraft industry. The last decades could be characterised as the most booming economic period.
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On the basis of what has been referred above, it can be said that, the region of Koropi comprises an allure for investment for large enterprises. Many large size enterprises have been transferred and settled in the region. The feature of the region’s economic activity shows the first indications of change, since the incentives for investment are increasing. The region’s economy though is still based on the activities of SME’s which do business in the area. The ultimate goal of the Municipality of Koropi is the establishment of conditions and the provision of incentives to businessmen of SME’s, so as to protect them from the continuous flow of larger enterprises.
Executive & Marketing Business Plan AB HELLIOTI Limited Strictly Private and Confidential
Presented by Mr Mark G Paterson, mgp & Associates (A division of Lynx Management Services UK Limited)
www.markgpassociates.com
A division of Lynx Management Services UK Limited
Internal Reference: AB HELLIOTI Property Development Executive & Marketing Business Plan Date: 2010-11-06 Page 38 of 39 Strictly Private & Confidential
Koropi is agriculturally famous for its main production of vineyards and olives. Except from the production of basic agricultural products, the residents of Koropi have been occupied in farming. In the 90s, the population turned to services.
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M A EX
Executive & Marketing Business Plan AB HELLIOTI Limited Strictly Private and Confidential
Presented by Mr Mark G Paterson, mgp & Associates (A division of Lynx Management Services UK Limited)
www.markgpassociates.com
A division of Lynx Management Services UK Limited
Internal Reference: AB HELLIOTI Property Development Executive & Marketing Business Plan Date: 2010-11-06 Page 39 of 39 Strictly Private & Confidential
9. Summary Company
AB HELLIOTI LIMITED
Project Name
AB HELLIOTI PROPERTY
Project Location
Greece
Project Owners
AB HELLIOTI LIMITED
Project Consultant
Mr. Mark Paterson Managing Partner, mgp & associates CEO, Lynx Management Services UK Limited Email:
[email protected] Email:
[email protected] Website: www.markgpassociates.com Skype ID: markgpaterson Telephone: + 27 79 770 2235 Facsimile: 0866383393(fax to email)
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Funding Amount
Euro 8,000,000 (Eight Million Euros)
Currency
EURO
Financing Structure
Term Loan
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Loan Term Loan Interest
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Interest repayment
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O P R
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Ten years
5% interest per year fixed for the term of the loan Moratorium for initial 60 months
Principal repayment Duration of the loan for 10 years – repayment from year 6 to 10 inclusive
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resulting in 20% of the loan being repaid each year.
Executive & Marketing Business Plan AB HELLIOTI Limited Strictly Private and Confidential
Presented by Mr Mark G Paterson, mgp & Associates (A division of Lynx Management Services UK Limited)
www.markgpassociates.com
