The outlook for investors in Greek real estate remains unclear following the country’s rejection of austerity measures yesterday.

Yesterday’s referendum saw more than 61% vote against an international bailout, backing the stance of Alexis Tsipras’s Syriza government.

While currency and stock markets adjusted to the result, prospects for Greek real estate investors are unchanged.

“Although the no-vote may have improved the Greek bargaining position marginally, it brings no clear way forward,” said Andrew Burrell, head of forecasting at JLL. “The underlying economic situation remains dire.”

“The market believes that values are down by at least 50%”

Sotiris Tsolacos

Deals such as the National Bank of Greece (NBG)’s sale of a €653m stake in NBG Pangaea REIC are unlikely to be replicated until there is more certainty. Unlike Spain and Ireland, Greece does not have a “bad bank”.

The late-2013 deal – Greece’s largest real estate transaction and approved by the European Central Bank’s Hellenic Financial Stability Fund – saw private equity firm Invel Real Estate take a 66% stake in Pangaea in a joint venture with US firm York Capital Management. China’s Fosun Property and Abu Dhabi’s Al Maabar have also invested in Greece, as has AGC Equity Partners.

The Hellenic Republic Asset Development Fund, the government agency for privatising state-owned assets, has also sold assets.

Assuming that Greece keeps the euro, Sotiris Tsolacos, professor of real estate finance at Henley Business School, says he expects more interest in such assets, with transactions likely to take place “once some kind of road map for the economy is put in place”.

Surprised by last night’s result, Tsolacos says REITs such as Pangaea have “some good assets in their portfolios”.

“According to the REITs themselves, values have fallen by about 30%,” he said. “The market believes that values are down by at least 50%.”

Non-performing loan levels have reached “staggeringly high levels”, ratings agency Fitch estimates. NPLs at National Bank of Greece, Piraeus Bank, Eurobank Ergasias and Alpha Bank reached €72bn at the end of last year, Fitch said.

Greece’s real estate loan portfolio market was recently predicted by PwC to experience more transactional activity this year. But the Greek NPL market will remain static, Tsolacos says, foreseeing little NPL movement “in the coming months”.

“Bringing private sector money to solve the NPL problem goes against the principles of the current government, at least for a while,” he said.

Speaking at the third International Conference on the Real Estate Market by the Bank of Greece in March this year, Kerasina Raftopoulou, who advises the Greek government on banking, said: “The problem with the Greek case is that the level of NPLs is so high, that reduction to acceptable levels cannot be achieved even under conditions of perennial growth.”

While the latest uncertainty poses a current threat, the Greek situation is here to stay, Blue Sky chief investment officer, Mark Burbach told IPE recently.

Institutional investors must, he said, expect market volatility for at least the next three weeks.

Two weeks from now, €3.5bn of Greek bonds are due with the European Central Bank (ECB). If the payment is missed, the ECB will possibly be unable to take collateral from Greek banks in receipt of €89bn of Emergency Liquidity Assistance (ELA) funding.

“I think the time until 20th July is critical,” Tsolacos said. “Will an agreement be reached and banks re-open – or we are heading towards a bank deposit haircut?”

The withdrawal of ELA could then lead to a eurozone exit, with Greece printing a new currency. Investment bank JP Morgan said there is a two-in-three chance that Greece leaves the euro-zone, possibly under “chaotic circumstances”.

For the real estate market, a deal between Greece and its creditors “could bring upside”, JLL’s Burrell said, providing it “looks durable”.

“Grexit and economic collapse would be very painful for Greece and bring short-term economic costs to the euro-zone, but markets should be resilient enough to weather these,” he said.

Speaking in London last week, Hermes Investment Management chief economist Neil Williams said he expects Greece to find “every way it can to stay in the system”.