GREECE - Provisions in the social security laws passed last month by the Greek government are set to kick-start greater professionalism in managing pension funds' real estate assets, a leading fund manager claimed.

Nicholas Tessaromatis, chief executive, EDEKT Asset Management, said previous legislation had prevented effective real estate management.

"Until now, it has been almost impossible to run these assets efficiently," Tessaromatis said.

"This change will help pension funds do a better job and open up new opportunities."

The new law sees EDEKT appointed as the fiduciary of the country's social security and pension funds, and will carry out the role of strategic adviser and provider of administrative services such as reports and accounts, and valuations.

As part of its role, EDEKT will act as a vetting agent for property developers, meaning pension funds that wish to invest directly in property will have to select developers and asset managers from a list of eligible names drawn up by the fund manager.

According to Tessaromatis, much of the real estate held directly by pension funds has been on their books for decades.

He said: "In most cases, the property - mainly offices - is not actively managed. For instance, the rents collected are a fraction of what they should be. This change will give pension funds the opportunity to do things better."

The legislative change will also tackle the dual pricing system - where property can be valued both at its market price and a price based on the official state price per square metre - since rigorous reporting standards will lead to market-based valuations.

"The official prices are sometimes far below market price, so buildings may be in the books at a fraction of their real value," said Tessaromatis.

"Using official prices for valuations also means that pension funds may not have been aware of recent falls in value."

Further detail on these provisions is expected at the end of September.