The real estate development company Dimand is working on new plans for the property that houses the Notos department store, exploring various scenarios, including the creation of branded residences in the seven-story building.
Located at the intersection of Stadiou and Aeolou Streets in Omonia Square, the historic building will be vacated at the end of August after more than 25 years of operation as a department store, marking the beginning of a new chapter for both the property and the neighborhood.
The market is closely monitoring Dimand’s plans. In addition to the end product that its investment will yield, it is estimated that the new building will upgrade the area, creating new opportunities for capital gains.
The first step
In the first phase, the building must be transferred to Dimand by Piraeus Bank, which owns 100% of the asset. It should be noted that the two parties announced a broad strategic partnership two years ago regarding this specific property (along with three others).
The agreement provides for the development and renovation of the property, with the initial cost estimated at €20–25 million, although it is anticipated that the investment amount will be significantly revised upward. From a property exclusively used for retail, the 8,000 sq. m. available at the corner of Aeolou and Stadiou streets are intended for mixed use.
Differences and similarities with Minion
According to initial market estimates, the new investment will follow the model of Minion, the property developed by Dimand and subsequently sold to Alpha Bank.
Although the two properties share similarities, there are also significant differences. Both are historic retail spaces in strategic locations, but Minion is larger (by approximately 15%).
Also, from an investment perspective, the Stadiou-Aeolou corner is considered a stronger commercial location than the Minion site, as it is closer to Syntagma, Ermou Street, and the heart of tourist traffic.
The lower floors are likely to remain retail spaces, according to reports on Euro2day.gr. Furthermore, the role of offices in the building is under consideration, although it appears that the possibility of residential units is gaining more and more ground.
Unlike the Minion building (which does not house residential units), the possibility of including apartments of various sizes on the upper floors is being considered here.
If this plan moves forward, the option of branded residences stands out, sources note. It should be noted that branded residences are properties developed and marketed under the “umbrella” of a well-known brand, typically a luxury hotel group, but also companies from other sectors.
Compared to conventional residences, those with a strong brand are often sold at a premium ranging from 20% to over 50%.
A favorite among institutional investors
Following the transfer of the property from Piraeus Bank, Dimand will control 100% of the special purpose vehicle (SPV) that owns the property. As with the Minion project, Dimand can execute the investment on its own and eventually divest, as it aims to do with all its projects.
Given that prime real estate in the heart of Athens is among institutional investors’ favorite investment options, sources indicate that it is not out of the question for a strategic investor to acquire a stake early in the development process, thereby securing a better price.