The World’s Uberwealthy Scramble To Buy Greek Isles

– The World’s Uberwealthy Scramble To Buy Greek Isles (ZeroHedge, May 17, 2013):

The emir of Qatar is a busy man: in addition to providing funding and weapons to the mercenary group formerly known as Syrian “rebels” in order to boost his already incalculable wealth and promote his LNG interests in the region over those of Saudi Arabia, in the process isolating Russia as the marginal provider of energy to Europe and furthering western interests even if it means escalating the Syrian civil war, he is also diversifying his assets. And he is doing so in a way that would provide for a quick and painless getaway should things in his country turn sour (now that the US and Russian fleets are converging nearby, this is no longer a merely token possibility): by buying Greek islands. So now that the world has seen the “lead investors” step in, the uber-wealthiest are scrambling to copycat one of the world’s richest people and stake their own Greek island claim.

As reported two months ago, Qatar’s emir Hamad bin Khalifa Al Thani paid €8.5 million for six islands in the Ionian sea. As Guardian reported, “The isles, known as the Echinades, caught the oil-rich monarch’s fancy when he moored his super-yacht in the turquoise waters off Ithaca, took in the view and liked what he saw. That was four summers ago.”

When the royal eventually got off the yacht, he inquired about the pine-covered chain as he strolled about Ithaca in sandals and shorts. “They have a fund with a couple of hundred million in it,” enthused Kassianos, a former US economics professor who assumed the mayorship of Homer’s fabled isle three years ago. “And as far as I know they want to buy all 18 of the islands, the whole lot.”

The purchase, the biggest private investment in Greece, appears to have been a windfall for the emir, who drove a hard bargain in a market where investors are few and far between. The first island, Oxia, initially came with a price tag of €7m before its Greek-Australian owners agreed to let it go for just under €5m. Last week, Denis Grivas, whose family has owned the title deeds to the other five almost since the foundation of modern Greece, also settled on a price.

“The islands have been in my family for over 150 years but we are not rich enough to be able to keep such valuable properties any longer,” he said, ruing the soaring taxes the crisis-hit Greek state has slapped on real estate. “We are very, very happy to see them go. They have been on the market for nearly 40 years.”

…the Gulf royal does not appear in any mood to create tourist resorts on the retreats. Instead, said Kassianos, his aim is to build palaces for the exclusive pleasure of his 24 children and three wives. The architects have already moved in, drawing up plans to create a private idyll.

One of the recently purchased islands in question: Oxia, which cost €5 million.

However, even for a man for whom the purchase prices was pocket change did not splurge.

The emir may be rich but he is business savvy. He had wanted to buy the Ionian isle of Skorpios, where Jackie Kennedy married Aris Onassis. The deal fell through when the late shipowner’s granddaughter, Athina Onassis, refused to come down in price. She is selling for €200m.

Curiously, that offer may soon be lifted because as Spiegel explains, following the Qatar emir’s purchase, suddenly there is a mad rush by all of the world’s superwealthy to do just that, and partition Greece’s private islands among themselves.

From Spiegel:   Coveted Coves: Emir’s Greek Isle Purchase Inspires Hope

The sparsely inhabited Greek island of Ithaca is set for new
growth after the Emir of Qatar bought some islands in the area

Despite the country’s crippling financial crisis, residents of the Greek island of Ithaca have found new hope after the Emir of Qatar bought a nearby island for his summer retreat. The purchase has sparked a rush on local real estate and could bring new development.

After the Trojan War, Odysseus’ journey ended on the island of Ithaca, which later became part of the Byzantine Empire. Located in the middle of the Ionian Sea, it is covered with vegetation and has few beaches, which explains why no one was particularly interested in it or other neighboring rocky islands south of Corfu for a long time.

Only a few of the rich and powerful have anchored their yachts in Ithaca’s coves, including Winston Churchill, John F. Kennedy, Jr., Maria Callas, Madonna, Prince Charles and the Russian oligarch Roman Abramovich.

Celebrities are attracted to the group of islands off the west coast of Greece because they are sparsely populated, and their coves are relatively inaccessible and protected from the eyes of the paparazzi. There is nothing celebrities desire more than spending their vacations without being observed — and in the company of other celebrities. This is probably why Hamad bin Khalifa Al Thani, the Emir of Qatar, cast his anchor there. He must have liked what he saw, because he promptly decided to buy some of the islands in the area.

Since then, Denis Grivas’ phone has been ringing off the hook. An engineer with a doctorate from the University of California, Berkeley, he lived in the United States for a long time before returning to his native island of Ithaca in 1994. He too once owned an island in the Ionian Sea, a four-and-a-half square-kilometer rock called Atokos, apparently suited for little more than goats and sheep. But he eventually sold the island. How could Grivas have known that one of the richest men in the world would be interested in islands like his one day?

The Return of Hope

It all began centuries ago, when the Grivas family acquired 10 small islands near Ithaca. When Grivas’s grandfather passed on the islands to his sons, his father received six islands. But there wasn’t much he could do with them. Even shepherds and goatherds felt the islands were too rugged to lease them as pasture for their animals.

When his father died in 1973, Denis Grivas inherited one of the islands, Atokos. But when he was unable to pay the hefty inheritance tax and the authorities temporarily confiscated his passport, he began looking for a buyer. He finally found one in 1982, with the help of a Hamburg broker. Grivas sold Atokos for the equivalent of about €1 million ($1.3 million), and his passport was returned.

It seemed like a good deal at the time, but now he regrets selling Atokos. The emir has brought both hope and money back to the Ionian Sea. The Arab ruler reportedly paid €5 million for Oxeia, an uninhabited island near Ithaca. He also reportedly paid Grivas’ sister, a homemaker in California, several million for five smaller islands, although the final transfer of title hasn’t yet taken place.

Since then, Grivas and his family have become famous and are now receiving inquiries from around the world, even from as far away as Singapore and Nepal. A gold fever of sorts has also erupted among Grivas’ neighbors. A few weeks ago, the daughter of a Russian businessman apparently bought, or at least leased, the neighboring island of Skorpios. “The emir has brought a feeling of hope back to the islands, something that was missing in these depressed times,” says Grivas.

No Longer Relying on Tourism

“The best approach is to conduct fair and direct business deals,” Qatar’s premier told his Greek counterpart Antonis Samaras when he visited Doha in January to drum up investment. The emir is now taking his prime minister’s advice literally.

He apparently intends to build a private estate for his family on Oxeai, says Ithaca Mayor Ioannis Kassianos, although he doesn’t know exactly what the estate will look like. But it will undoubtedly be grand, given that the emir has three wives and 24 children. Kassianos advises the man on whom he is now pinning his hopes to bring along plenty of patience. “Even if you are the emir of Qatar and are buying an island, the paperwork still takes 18 months,” he says.

Kassianos, a former business professor, also returned from the United States in the 1990s. As the nonpartisan mayor of Ithaca for the last two-and-a-half years, he has been trying to lead his community out of the crisis. “Nothing worked throughout the entire time, and now someone comes along and is bringing in money,” he says. A lot of money, in fact. The Qatari ruler apparently wants to invest about €200 million in his summer retreat.

The mayor now hopes that his island will finally get a water pipeline to the mainland and garbage collection. He expects that both services will undoubtedly materialize once the emir starts building. A harbor expansion is also likely, he says, as well as a new shipyard. Workers will be needed, as well as provisions for the workers, and it seems logical that the emir will turn to Ithaca for these things. Besides, Kassianos argues, the emir’s plans will likely attract other wealthy investors. “We will no longer be dependent on tourists, and we’ll be able to double our revenues,” says Kassianos.

But Grivas, who sold his island too early, is unlikely to benefit from the gold rush. “When you sell something, you sell it with all of your heart,” he says. “I had no choice at the time. It had to happen.” Now he’s waiting for his retirement pension.