In Greece, work is underway to build a sprawling new district in one of Europe’s oldest cities. The 6.2m sq m Ellinikon project along Athens’s riviera is three times the size of Monaco and is being dubbed ‘a city within a city’. Its planned high-rises, smart irrigation systems and large parks starkly contrast with the ancient, concrete-laden city centre. Indeed, the Ellinikon will increase Athens’s green space by 44%.

With construction costs of €8.5bn, it is the most ambitious development project in modern Greek history and one of Europe’s biggest urban regeneration projects. It is located on the site of the former Ellinikon airport, which closed in 2001. Local real estate developer Lamda Development took over the space in 2021 after winning the tender seven years prior. When Lamda arrived, it found a dilapidated area with more than 900 buildings that had been left untouched for two decades. This year, the first signs of progress have emerged with the foundations of the country’s first skyscraper laid in October. 

“The Ellinikon is a point of reference for the whole region,” says Vicky Loizou, secretary general for private investment at Greece’s ministry of development. “It will attract tourists and business, but we also think it is going to change the life of Athenians.” A metro line connects the site to central Athens, which sits 10km to the north. In addition to creating more than 10,000 mid-to-high end homes, new office space and hotels, it will also feature Europe’s biggest coastal park, a new public beach, two shopping malls, a casino and a state-of-the-art sports complex. 

By the time the megaproject is complete in 2045, Lamda expects it to have added 2.4% to Greece’s gross domestic product and generated €14bn in tax revenues. Ms Loizou says it is already having positive spillovers, with hotels bordering the project recently opening and others being renovated. “This project is helping transform the whole Athens riviera,” she says.  

Against the odds

The government has helped co-ordinate the megaproject but is not providing any financial support. Lamda has secured €2.5bn in funding to complete the first phase, but for the subsequent stages it will not be working alone. It has partnered with Saudi-owned investment firm Olayan Group and US-based Brook Lane Capital to develop residential buildings and hotels. Hard Rock is building an integrated resort and casino, while Mandarin Oriental is opening a hotel in 2027. “We intend to have other joint ventures for which we are looking for international or local expertise,” says Lamda CEO Odisseas Athanasiou.

The project's green credentials have won the backing of the European Bank for Reconstruction and Development (EBRD) which invested €42.7m in the project via Lamda’s equity and bond issues. George Maltezos, EBRD’s principal banker for Greece, describes the project as “symbolic of the shift of the overall Greek economy” and as providing a “new local metropolitan identity for the city”. 

The Ellinikon is the biggest privately funded investment in Greece’s history and comes after more than a decade of economic fragility caused by the global financial crisis, a national debt crisis and the Covid-19 pandemic. When asked if today’s high interest rates and inflation pose a challenge, Mr Athanasiou cannot help but smirk. “This project has gone through so much,” he says. “We got it in the midst of a financial crisis, many people went abroad, [Greece’s] banks were bankrupt. At the beginning people were in disbelief that it would take place, which made it hard to recruit people and invite international architects to design the project. I won’t say we’ve seen it all, but we’ve seen a lot.” 

Lamda’s biggest challenge now is finding enough workers to fill the 10,000 roles created during the construction phrase, a problem Mr Athanasiou says could ease under government plans to relax foreign worker rules. But the project has a good track record in getting people on board. “At the beginning we faced nothing but public pushback,” he recalls, noting the 2014 tender was part of an unpopular privatisation programme to shore up the national government’s finances. “Now that people see the progress, they are very much in favour of it. They see it as society-oriented.”  

This article first appeared in the December 2023/January 2024 print edition of fDi Intelligence

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