Greece to Lease 40 Uninhabited Islands to Reduce Public Debt

Posted by in Economy, Tourism

 Fourty uninhabited islands are ready to be leased to local or foreign investors, for up to 50 years. Greece is under pressure to fill state registers and targets revenues of 50 billion euro until 2020.  Through the leasing of these islands that “offer good terrain, are close to the mainland and have a well-developed infrastructure.” However these islands cannot be sold due to national security reasons.

 Bloomberg: Greece Prepares to Lease 40 Uninhabited islands

Greece’s Hellenic Republic Asset Development Fund has identified 40 uninhabited islands and islets that could be leased for as long as 50 years to reduce debt as pressure grows on the country to revive an asset-sales plan key to receiving international aid.

“We identified locations that have good terrain, are close to the mainland and have a well-developed infrastructure and, at the same time, pose no threat to national security,” Andreas Taprantzis, the fund’s executive director for real estate, said in a Sept 6. interview in Athens. “Current legislation doesn’t allow us to sell them outright and we don’t want to.”

 The fund is charged with raising 50 billion euros ($64 billion) from state assets by 2020 to meet conditions tied to pledges of 240 billion euros in foreign aid. As international inspectors in Athens scrutinize the country’s fitness to receive the latest aid payment, Prime Minister Antonis Samaras has said commercial exploitation of some islands could generate the revenue lenders need to see to continue funding the country.

The shortlist includes islands ranging in size from 500,000 square meters (5.4 million square feet) to 3 million square meters, and which can be developed into high-end integrated tourist resorts under leases lasting 30 years to 50 years, Taprantzis said.

The fund reviewed 562 of the estimated 6,000 islands and islets under Greek sovereignty. While some are already privately owned, such as Skorpios by the Onassis shipping heiress Athina Onassis, the state owns islands such as Fleves, which is near the coastal resort area of Vouliagmeni, and a cluster of three islands near Corfu. Taprantzis declined to identify any of the islands.

Legislation needs to be passed to allow development of public property by third parties and reduce the number of building, environmental and zoning permits needed before the plan can proceed, Taprantzis said.

Outright sales have been ruled out because the returns for the Greek state wouldn’t be higher than a leasehold arrangement, he said. Greece will attract more investment if an island is turned into a resort, he said.

Selling public land outright is a politically sensitive issue in Greece. (Full article Bloomberg)

However Bllomberg notes that first political hurdles must be overcome and an appropriate business environment should be established in order for the investments to materialize.

 List of Islands for Leasing via Ethnos.gr

If leasing is not for you, there are always private owned island for sale, with prices starting by 1.5 million euro.

However, if you always had an eye for Scorpios, the famous Onassis island at the Ionian Sea, let me tell you, “it’s not for sale”. But you can rent it. Onassis heiress Athina Onassis plans to rent or lease it due to high maintenance cost of 85,000-100,000 euro per year. According to Sunday newspaper Real.gr, Athina Onassis has already two offers that seemed quite attractive.

PS I hope the islands-leasing- project will not have the same ‘success’ as the privatizations-projects.