TRENDS IN THE PROPERTY DEVELOPMENT MARKET OF ATHENS :THE CASE AREA OF MESOGIA BY : MARIA I. LEVANTI THIS THESIS IS SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF SCIENCE IN CONSTRUCTION ECONOMICS AND MANAGEMENT FROM THE UNIVERSITY OF LONDON BARTLET SCHOOL OF GRADUATE STUDIES UNIVERSITY COLLEGE LONDON SEPTEMBER 2001 ProQuest Number: 10006790 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. uest. ProQuest 10006790 Published by ProQuest LLC(2016). Copyright of the Dissertation is held by the Author. All rights reserved. This work is protected against unauthorized copying under Title 17, United States Code. Microform Edition © ProQuest LLC. ProQuest LLC 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, Ml 48106-1346 CEM Report____________________________________________________________Maria I. Levant: to the memory o f my father CEM Report____________________________________________________________Maria I. Levant: List of contents List Of Contents........................................................................................i Abbreviations List....................................................................................ii Aknowledgements................................................................................... iii Abstract....................................................................................................iv Chapter 1: Introduction 1.1 Research Objective ...............................................................................1 1.2 Methodology.........................................................................................3 Chapter 2: Urban Growth Trends 2.1 Athens The Capital Of Greece..............................................................5 2.2 Development Patterns...........................................................................6 2.3 The New Infrastructure Investment ......................................................8 2.4 Future Urban Growth Trends In Athens .............................................10 2.5 The Significance Of The Greater Mesogia Plain................................12 Chapter 3 : Mesogia Plain : Demand For Development 3.1 Anticipated Impacts Of New Airports...............................................15 3.2 Anticipated Development Impacts Of Peripheral Motorways.......... 21 3.3 The State Role-Town Planning Authorities ....................................... 23 3.4 Anticipated Impacts On The Development Of Mesogia Plain.......... 25 Chapter 4:Traditional Structure Of The Athenian Development Industry 4.1 Actors and Roles............................................................................... 29 4.1.1Finance for development.................................................................33 CEM Report____________________________________________________________Maria I. Levanti Chapter 5 : Present Trends 5.1 Present Property Market Trends........................................................ 37 5.2 Trends In The Development Industry -The New Entrants 5.2.1 Developers...................................................................................... 42 5.2.2 Client-Building Owner. ................................................................. 49 Chapter 6 : Conclusions-Discussion.....................................................52 Bibliography Appendix A; Maps Appendix B : Overview of Greek Economy Appendix C : Interviewees Appendix D : Urban Growth in Athens CEM Report____________________________________________________________Maria I. Levanti ____________________________________________Abbreviations list ALA: Athens International Airport-EIeytherios Venizelos AO: Attiki Odos Motorway EU: European Union CEM Report____________________________________________________________Maria I. Levanti Acknowledgements First and foremost I would like to thank my mother and all the people who stood by me and supported me during the last year and helped me to conclude my studies. I would also like to thank all the interviewees for sharing with me their professional experience and helping me in the preparation of this thesis. I feel greatly indebted to my supervisor Graham Ive for his help and guidance during the preparation of this thesis . CEM Report_________________________________________________________________Maria I. Levanti ___________________________________________________Abstract New infrastructure investment in an urban area has an impact on the economic and conclusively on the urban development of the area. The magnitude, type and time of the effect depends not only on the importance of the infrastructure but on the characteristics of the local market, its interrelation with other markets and the characteristics of the development industry. The city of Athens is presently changing due to many major infrastructure projects (Athens International Airport, Attiki Odos Motorway). In the aim of this thesis is to identify the forming trends in the property development industry in Athens and in the area of Mesogia in particular. On the investigation for development demand the urban growth trends in Athens are analysed and spatial and qualitative estimates are made for the future. On the investigation for the supply of the built environment the structure of the development industry is analysed along with the estimated future changes. Key phrases:Property development market, speculative developer, New entrants, property prices, urban growth Wordcount: 10,872 CEM Maria I. Levanti Chapter 1 Introduction Athens, as capital of Greece, is the major urban centre of the country and one of the major economic centres of the Balkans and East Mediterranean. Economic growth and industrialisation were delayed in Greece due to political instability and half the Greek population moved to Athens in the hope of a better life. The 1950’s and 1960’s were characterised by unplanned urban “sprawl” which resulted in a congested centre with no sufficient infrastructure, and public transport. During these years the Athenian building industry even though highly fragmented, grew enormously in order to accommodate the required building stock and became one of the backbones of the economy. In the recent years major government infrastructure investment in Athens became possible due to the recovery of the Greek economy and the European support Frameworks. Furthermore, the Athens 2004 Olympic Games have contributed to the acceleration of many major projects which are being constructed or planned for the near future: The Athens metro. New Athens International Airport Eleytherios Venizelos (AIA), the Attiki Odos Motorway (AO), Suburban railway network, and works associated with the 2004 Olympic Games. CEM____________________________________________________________________Maria I. Levanti These prospects gave rise to an unprecedented excitement in the property development industry and also contributed to major changes in its structure and agents (developers, builders, landowners, and financiers). In the past, the private development market involved medium to small size buildings and small mostly self-financed firms. That was mainly because the unavailability of big undeveloped sites discouraged large construction companies to enter the market. Now however, these barriers are lifted as undeveloped land becomes accessible due to the projects and big construction firms are entering the development market. Furthermore, due to privatisations and deregulation on the one hand, and the continuing decrease in the interest rates on the other, major investors like banks, pension funds, and insurance companies tend to invest in the development market which has a greater yield. Even though rapidly developing, the property market is not matured yet and, considering the present dynamic conditions, the future trends (short and long term) of supply and demand are hard to distinguish. Professionals declare their conviction that the development market will flourish in the future, while recognising that, due to the uncertain conditions, high risks are involved for the participants in the development process depending on their role and size. 1.1 Research Objective The objective of this thesis is to investigate the trends of the property development industry in Athens, which is experiencing considerable changes presently, in both sides of demand and supply. The demand for development in an area is associated with macroeconomic and demographic parameters and social conditions. Nevertheless, it depends mainly on the urban growth trends of Athens and the mosaic of local characteristics of the various areas which affect the CEM____________________________________________________________________Maria I. Levanti location decisions of the consumers of the built environment. An extensive local analysis for the entire city would not only be superficial but unnecessary as well for the purposes of this report. In the light of this, the investigation is limited to the case area of Message plain (Appendix A) because its distinguishing characteristics establish it as a critical market, the trends of which represent and also affect the overall of the Athenian property development market. The major impacts in the area are caused by the new Athens International Airport (AIA) Eleytherios Venizelos