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Lamda Development | Ellinikon in full progress; time to believe…?

Ellinikon remains a self-financed development… – Phase 1 of the Ellinikon is progressing, albeit with some delays pushing completion into 2027e-28e. The scope of Phase 1 spans c400K sqm of residential space, retail, sports, education and business facilities, as well as the refurbished marina. With €1.3bn cash proceeds by H1’25, well above the €744m capex to date, and several projects advancing through strategic partnerships, we continue to view the Ellinikon as self-funded.

…with important milestones unrolling – Key projects are moving ahead, with “Little Athens” residencies accelerating under Lamda’s new construction unit (CBU), the Riviera Galleria advancing on time and on budget for completion by end-2026, and the Sports Park targeted for summer 2026. Meanwhile, construction continues at the Riviera Tower and core infrastructure works, with delivery timelines staggered but broadly intact. Lamda has faced various challenges, with some residential projects’ marketing phased a bit later, but through this process the group has gained valuable know-how that will be critical as the next development cycle unfolds.

Trimming near-term estimates due to slower 2025 progress than previously anticipated – Against a weak construction backdrop marked by labour shortages, higher costs and the new building regulations of Dec-24, Lamda has faced delays in the Riviera Tower and infrastructure projects. We thus extend completion of certain Phase 1 works into 2027-28, thus trimming near-term group estimates. That said, we still expect Lamda to deliver higher adj. EBITDA in 2025e, at €185m (+8% yoy).

Sensitizing residential projects crystallizes value – Residential developments remain the key value driver, with c1.2m sqm set to be sold at an average sale price of €9K/sqm, as per our modelling. On our numbers, Lamda is poised to record c€700m profit (pre land/infra) from c230K sqm in Phase 1 at a 34% margin, and c€2.5bn profit from >800K sqm in Phase 2 at c37% margin, plus profit from land sold for third-party developments. Sensitizing for a €1K/sqm shift in pricing across the unsold stock results in a c30% change in post-tax NPV (c€2 per share).

Reasonable leverage despite heavy Ellinikon capex – Lamda retains reasonable leverage, with H1’25 net debt at c€680m (incl. leases). We expect group net debt to settle at c€640m at year-end 2025, rising modestly to €672m in 2026e as Ellinikon mall development kick in. Strong operating cash inflows and phased project execution are set to help leverage remain manageable, with net debt/adj. EBITDA at c4x over 2025-27e, rising to 5-7x by 2029e, despite elevated capex (€1.8bn in our model).

Valuation – Updating our model and SOTP valuation, we lift our 12m PT to €10.7/share (implying a c15% premium to 2026e NAV), due to higher long-term estimates. We apply a 9.6% WACC for Ellinikon cash flows (vs 10% previously, reflecting monetary easing) and an effective 10-yr blended EBITDA yield of 8.8% for Lamda Malls. Despite a 20% rally since July, the stock remains at c18% discount to NAV, with Ellinikon’s long-term value yet to be fully reflected in market pricing. Looking ahead, we see Ellinikon execution driving NAV above the €11 mark by 2027e, underscoring the project’s significant value creation potential.