Maria Eracleous
A new investment exceeding 60 million euros is currently in the study phase, focusing on the development of a strategically positioned plot in Nicosia. According to exclusive information from "K", the plot is located on Limassol Avenue, and the primary option being considered is the creation of a mixed-use project that capitalizes on the demand for residential properties, corporate spaces, and traffic congestion alleviation in Nicosia. This proposed development aims to enhance housing options in the city center and provide professional facilities.
Based on the project's prospective renderings obtained by "K," the study involves the construction of a luxurious five-story building that will include apartments, office spaces, restaurants, and healthcare services. The development is being undertaken in collaboration with an internationally renowned architectural firm with extensive experience in office facilities, retail spaces, residences, leisure, and mixed-use projects, already leaving their mark on other ventures on the island.
In this particular case, the investor intends to prioritize leasing the apartments and office spaces instead of pursuing immediate sales. The rationale behind this approach is that, at present, due to high-interest rates and inflationary pressures in the market, making the decision to purchase property is challenging. It is believed that rental options may find more traction, at least in the current stage. This practice allows for better control and management of the investment's sustainability, without being subjected to the current difficulties of the market, such as rising interest rates, stricter loan conditions, and so on. The decision to lease instead of selling the property may, of course, change in subsequent stages when market conditions become more favorable and repayment becomes objectively more feasible.
This upcoming development is not the only investment in office spaces in the area, indicating a growing interest in the region.
Investment in office spaces
It is worth noting that construction and operational activities are currently in progress for the two towers located within the outdoor area of the Landmark Hotel, situated at the entrance of Nicosia. This investment amounts to €70 million and is significantly more advanced than the upcoming mixed-use investment mentioned earlier. The project entails the development of two buildings: a seventeen-story residential structure comprising a total of 53 apartments, and a sixteen-story high-rise building designated for office purposes, accompanied by a private plaza measuring 1,500 square meters. The combined gross floor area of the residential and office buildings is 13,794.60 square meters and 26,640 square meters, respectively.
The Demand
In theory, there is a demand for office space. Assessments from real estate agents and foreign investors indicate that there is still ample opportunity for the development of new office spaces in Cyprus, particularly in areas with limited availability of such facilities. As a result, it is expected that the demand for office space will continue to experience movement in the real estate market, fueled by the significant influx of foreign companies to Cyprus following the war in Ukraine. Cyprus, on the other hand, stands out as an attractive choice for investors, both local and international, in sectors that are closely tied to the tourism industry, driven by various factors.
What Investors See
While we have yet to overcome the hurdle of bureaucratic procedures for new investments, and bureaucracy, in general, is a concern for new investors, there is a positive assessment for specific services that operate efficiently, such as the Land Registry. Additionally, infrastructure, including road networks and development projects, plays a significant role and can be a comparative advantage for the Cypriot market compared to other options available to foreign investors. In this particular field, there are significant infrastructure projects in progress, such as the Nicosia Ring Road, with the completion of its first phase expected by the end of this year. This element favors investments in the specific area. For 2023, development and reform projects worth €140 million are expected to progress. As explained by investment professionals, the attraction of foreign investment interest can also be attributed to the strong performance of the Cypriot economy, which, according to the Central Bank Governor, remains robust and is expected to have an increasing growth rate until 2025, reaching 3.1%. The Cypriot banking system is regarded as reliable by aspiring investors, as well as the judicial system, despite the slow processes of handling cases. At the same time, the widespread use of the English language, as one of the main languages in tertiary education, business, and professional activities, is considered significant for foreign investors and gives the Cypriot market an additional positive attribute compared to other European investment destinations.
[This article first appeared in Kathimerini's printed 'Oikonomiki' edition and was translated from its Greek original]
