Abu Dhabi-based property developer’s Greek project hits the buffers

Al Maabar's high-profile Greek development falls foul of state auditors

Olympic Airways airplanes stand on the premises of the former Athens International Airport, Hellenikon. Reuters

Al Maabar’s Hellenikon development project in Greece has temporarily hit the buffers, in the latest Greek privatisation deal to fall foul of the country’s auditors.

The Abu Dhabi-based overseas property developer was part of a group of investors and developers selected in March by Greece’s privatisation agency, the Hellenic Republic Asset Development Fund (HRADF), to acquire a 6.2 million square foot plot of prime Athens land for €915 million (Dh4.34bn), with a view to develop the site into a coastal resort.

However, the country’s Court of Audit earlier this week informed the consortium that it had temporarily refused approval for the sale of the land.

Although no reason was given for the refusal, a court official told Reuters that the tender terms violated the principles of transparency and equal treatment.

The consortium, which includes Al Maabar, Latsis Group of Greece, the Chinese firm Fosun and the Greek developer Lamda Development, was the sole bidder for the land.

The HRADF said that it would submit a petition for the revocation of the judgment to the competent judicial section of the court of audit within 15 days in an attempt to unblock the process.

“The reason the courts have given are quite technical and are easy to appeal,” said a source close to the situation in Athens. “It’s not the first time that something like this has happened.”

The objections raised to the Hellenikon deal are the latest in a string of interventions by the court of auditors in Greece’s wholesale privatisation drive as the country seeks to restructure its finances and make repayments on bailouts totalling €240bn after the 2009 European debt crisis, which it helped to trigger.

The country missed its privatisation targets for last year after the Court of Audit blocked the sale of 28 state assets to two Athens-based companies.

It is expected to issue a fresh decision within two months of the petition being filed. The process is unlikely to significantly affect plans to start construction on the new resort in 2016, the source said.

Al Maabar did not respond to a request for comment on the decision.

Al Maabar announced plans in May for a €7bn project to develop what could become Europe’s largest mixed-use development in Hellenikon, previously the site of the city’s international airport.

Plans for the development include retail, residential, leisure, hotels and office space arranged around 3.5 kilometres of coastline and a 2 million square metre park, which has been billed as one of the world’s largest.

The development is Al Maabar’s first foray outside its core region of the Middle East and North Africa.

Al Maabar is backed by some of the big names in property development, including Mubadala, a strategic investment company owned by the government of Abu Dhabi.

The developer’s projects include Bab Al Bahr in Rabat, Morocco, and developments in Jordan that include Marsa Zayed in Aqaba and St Regis Amman.

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