National Bank of Greece SA, the country’s largest lender, reached an agreement to sell most of its real estate unit in a transaction that values the company at more than 1 billion euros ($1.3 billion), two people with knowledge of the matter said.
The sale of a majority stake in Pangaea REIC to Invel Real Estate Partners, a London-based real estate investment firm led by Christophoros Papachristophorou, was approved by the Hellenic Financial Stability Fund, according to the people, who asked not to be identified because the information isn’t public. The HFSF is a fund set up under the euro area and International Monetary Fund to recapitalize Greek banks.
The deal will close by the end of the year, the people said. NBG, based in Athens, said last month it was in talks with Invel about a deal, though a valuation wasn’t disclosed.
Greece is striving to attract foreign investment as the economy faces its sixth straight year of contraction. In June, Fairfax Financial Holdings Ltd. agreed to invest 164 million euros in Eurobank Properties Real Estate Investment Co. as part of a share-capital increase by Eurobank.
“If this deal materializes it will be an important confidence building development,” said Nicholas Spiro, managing director of Spiro Sovereign Strategy in London. “It will be perceived as a very welcome, albeit belated, step towards restructuring and the privatization of Greek assets.”
Dimitris Spyropoulos, head of the bank’s press office, said he couldn’t comment on any pending transaction as the deal would need final regulatory approval. Ellie Sweeney, an external spokeswoman for Invel’s Papachristophorou, a former managing director at Deutsche Bank and global head of RREEF Opportunistic Investments, declined to comment.
About two thirds of Pangaea’s assets are offices rented by NBG, while the rest are leased to other organizations for 10 years or more. The company owns an office complex rented by Hellenic Telecommunications SA, as well as 14 buildings that the bank bought from the state privatization fund for 115.5 million euros last month.
Invel will contribute properties it owns in Italy to diversify the portfolio of assets and NBG will retain management of the unit, the people said. An initial public offering of Pangaea could be carried out within two years, they said.