Greece Accepts Lamda Bid to Develop Europe’s Largest Urban Plot

Greece’s state asset sales fund accepted a revised offer from Lamda Development SA to develop Europe’s largest urban plot at the site of the former Athens airport, as the government struggles to catch up with its international creditors’ requirements to maintain the flow of funding.

The Hellenic Asset Development Fund accepted Lamda’s improved offer of 915 million euros ($1.2 billion) to develop the 6.2 million square-meter (620 hectare) former Athens airport site, an area almost twice the size of New York’s Central Park.

Advisers Citigroup and Piraeus Bank “submitted two separate positive fairness opinions on the financial offer of 915 million euros submitted by Lamda Development SA and the investors supporting its bid,” the fund said today.

Lamda submitted an improved offer on March 26, following the fund’s request for an increased bid, 25 percent more than its initial offer. “A huge piece of urban land, which was abandoned for more than 10 years will now become a source for growth for the city,” Ioannis Emiris, chief executive officer of the fund, said in a phone interview last week.

As European finance ministers meet in Athens tomorrow to discuss the release of the country’s next tranche of its bailout loan, the country’s ambitious privatization program remains behind targets. Greece last year failed to secure any offers for gas monopoly Depa, after an anticipated bid from Russia’s OAO Gazprom was never submitted.

Investment for Site

Lamda Development estimates the total cost for exploitation of the site will reach 1.2 billion euros, bringing the company’s total investment on the land to 2.1 billion euros, Chief Executive Officer Odysseus Athanassiou told Bloomberg in an interview last week. Investment could reach 11 billion euros, 2.5 billion euros of which will be invested in the first five years, creating 50,000 jobs, Athanassiou said.

The plan for the site development includes the creation of a park of at least 200 hectares, construction of schools, hotels and retail outlets, as well as infrastructure and utilities projects.

Finance Minister Yannis Stournaras said in an interview with Bloomberg earlier today that he expects the country to raise 2 billion euros from state asset sales this year, after having raised a total of 3.8 billion euros in the three years to 2013. Forecasts call for Greece to emerge this year from its six-year recession, which has seen unemployment rise to 27.5 percent.