Limassol office costs outpace London and Amsterdam

Office rental prices in Cyprus, particularly in Limassol, have exceeded those in cities like London and Amsterdam, according to major tech companies operating on the island. This issue is being cited as a key obstacle to further growth in the Information and Communication Technology (ICT) sector, which has experienced rapid development in recent years.

At a panel titled "Establishing Tech Island: Developing a Competitive Digital Economy for Cyprus" during the second day of the Cyprus Forum, industry leaders discussed the sector's performance and the challenges it faces.

Deputy Minister of Research, Innovation, and Digital Policy, Nikodimos Damianou, noted that Cyprus's goal of becoming a technology hub is within reach. He highlighted that ICT has been the fastest-growing sector over the last decade, with an average growth rate of 10%, contributing to the diversification of the economy.

"We need to focus on how to harness this growth to ensure it continues," Damianou said, emphasizing the importance of digital infrastructure, high-speed connectivity, data centers, and a skilled workforce, along with a regulatory framework to support further development.

Christoforos Anagiotos, head of KPMG's consulting arm DEAL, referred to a study on the sector's contribution to the economy, which found that ICT contributes €3.3 billion directly, or about 12% of Cyprus's gross value added (GVA). Including indirect effects, the total contribution rises to €5.6 billion.

Anagiotos also highlighted that 60% of employees in the sector are Cypriots, countering the belief that the sector mainly creates jobs for foreign workers.

Other speakers raised concerns about high rents in Limassol, not only for office spaces but also for housing. Elena Protsaskova, Director at Jetbrains, stressed the need for stronger collaboration between universities and the tech industry to better prepare future talent for the workforce. Meanwhile, Elena Grigoryan, CEO of My Games, pointed out the lack of schools for expatriates' children and the limited availability of office space as barriers to growth.

In a striking example, Une Bouratsine, CEO of Payabl, mentioned that office rental costs in Cyprus can be higher than in London or the Netherlands in some cases, adding to the sector's growing challenges.

[Information sourced from CNA]