Driving Investments into Commercial Real Estate
GIG: Elinet renders advisory services to Chinese investors interested in getting a foothold in the Hellenic market. Can you tell us a little bit about the history behind the establishment of Elinet and investments you’ve supported into the Greek market? What are your current goals and objectives?
BeiLei Zhang: Elinet was founded with the aim of providing investment consulting and management services to international investors. It has handled the purchase and management of commercial real estate with stable and above market returns. Our current goal is to identify investment projects with good potential.
According to international statistics, commercial properties have a better return on investment (ROI) than their residential counterparts. In Greece, however, investing in commercial real estate is a lot more complex than investing in residential property, demanding greater professional capabilities with respect to licensing and legal requirements.
This is why commercial real estate is recovering at a slower pace from the recession, and why the segment also presents great opportunities for future growth. At Elinet, we are specialised in addressing these issues.
We have been in the Greek market for the past 30 years, while we have been providing tailored investment advisory to our international clients for close to 15 years. During this time, we have supported investments surpassing €150 million euros, including all project phases including prospecting, technical, legal, and financial due diligence, licensing, tax advisory, and project development. We work hand-in-hand with investors through all phases of projects to ensure their completion and our clients satisfaction.
GIG: Elinet is currently focused on investing in commercial real estate assets in Greece. What are the benefits of investing in this segment vs. residential real estate?
BeiLei Zhang: We currently focus on commercial real estate, which includes large assets used for things like supermarkets, banks, hotels, schools, hospitals, clinics, and public authorities. These projects have a high entry barrier, need more professional experience, but have a much higher appreciation potential once all issues have been cleared.
Greece’s commercial real estate market provides a wide array of potential. The challenge, however, is that most of the assets are entangled with different liabilities and complex issues. We have the experience and necessary capabilities to negotiate with different parties, to resolve these issues, and present investors with an easy to understand and debt-free investment grade project.
The benefits of investing in commercial real estate versus residential are many, such as larger-scale meaning more square meters, easier property management, and stable returns. Most commercial buildings mean one company and one tenant for the most part, versus 10 to 20 tenants in residential buildings. And when it comes to the returns on your investment, commercial real estate offers much more stable returns.
Commercial tenants want 10 to 12 year leasing agreements which provides stability for property owners, as opposed to residential property where tenants typically change every 3 years.
We work closely with our professional team, together with our certified partners, to find the right real estate project with clear ownership, good tenants and long term appreciation potential. We conduct legal and technical due diligence, along with a professional evaluation of projects before we select the right one.
GIG: What are the most common questions raised by prospective investors and what are your answers?
- How to minimise their investment risk: This entails undertaking legal, financial and technical due diligence with a specialised team of professionals that know the market inside and out.
- How to ensure the highest return on their investment: This has many layers, but the most important aspects relate to choosing the right location, ensuring acquired assets are clear of any unnecessary legal burdens, and last but not least, guaranteeing properties have trust worthy tenants.
- How to complete their investments in the quickest and most efficient manner: This has to do with working with the right local partners, and ensuring that whoever assists an investor with a transaction has the right local expertise, the technical skills, and a commitment to confronting and overcoming any challenges that may arise. This is what Elinet is all about.
GIG: What other investment sectors do you believe pose potential for your clients? What message would you like to send to Chinese investors looking to invest in the Greek market?
Ronghui Zhang: Previous to the pandemic, the Greek economy was making a quick recovery with very good growth prospects. Now, and looking towards the post-COVID landscape, everything points towards Greece bouncing back sooner rather than later. While there are very interesting investment opportunities across a number of sectors, we believe the most secure investments can be identified in real estate, tourism, renewable energy, and medical care.
Greece is preparing for an important economic rebound, following the pandemic. We believe this is an exciting time, especially from a development perspective, and if there ever was a time to invest in Greece, it is now.
Interview from Greeceinvestorguide : Driving Investments into Commercial Real Estate