A Turkish-Arab fund plans to spend up to about 300 million euros ($322 million) to redevelop a luxury seaside resort outside Greece’s capital Athens, bringing significant foreign investment into the cash-strapped country, the fund said on Tuesday.
Greece concluded in October the sale of a 90 percent stake in the Astir Palace hotel complex to the Jermyn Street Real Estate Fund as part of a key privatisation scheme under Greece’s international bailouts since 2010.
The fund represents investors from Turkey, Abu Dhabi, Kuwait and other Arab emirates.
Greece’s leftist-led government initially froze the investment when it was first elected in 2015, while an administrative court ruled that planned construction on an Athens riviera peninsula violated national law.
That hurdle was removed when Jermyn Street and Greece agreed in January on an amended special zoning plan to align the plot’s development with the court’s ruling.
Presenting their redevelopment plan for Astir on Tuesday, Jermyn Street said it aimed to make the complex a prime destination for visitors from around the world.
“The past three years have shown our commitment to both Greece and to the Astir peninsula and we continue to have this commitment stronger than ever,” said Walid Abu-Suud, Chief Executive Officer of AGC Equity Partners, an investment adviser for Jermyn Street.
“The redevelopment plan aims to elevate the peninsula to a first-class tourist destination with an investment of over 600 million euros.”
Jermyn Street has already paid 393 million euros to acquire the resort, which accommodated US President Barack Obama during a two-day official visit to Athens last month.
The fund will spend another 250 to 300 million euros to renovate two existing hotels and build up to 13 luxury residences, aiming to reopen the resort in April 2018, it said.
Greece has lost about a quarter of its economic output during a seven-year recession induced by bailout-mandated spending cuts and tax hikes. Tourism, which accounts for about 17 percent of the country’s 185 billion euro economy, has fared well and Athens is relying on the sector and recovering domestic demand to return to growth next year.