Thanasis Photiou
In Latchi, Trozena and Polemidia—three very different parts of Cyprus—three separate Israeli-backed developments are under way.
For different reasons, each has made headlines in recent months, raising questions about planning and environmental permits, the suitability of their locations and the effect the projects could have on their surrounding communities.
In Latchi, a large hotel complex reached the final stages of construction while crucial licensing issues were still unresolved.
In Trozena, an almost abandoned village in the Limassol district, is at the center of an ambitious revival project by an Israeli-backed investor. The project had already progressed considerably by the time the authorities discovered that the necessary permits had not been secured.
In Polemidia, a Jewish school designed to accommodate up to 1,500 students is being planned in an area already struggling with serious traffic and planning problems. The municipality says it was not even consulted about the development, while excavation work had already begun at the site.
Build first, seek permission later
The hotel development in Latchi, on the site of the former Elia Latchi/Zening Hotel Eco Resort, was the subject of an investigation by Kathimerini.
The investigation found that work had continued—or had been completed—despite delays and unresolved issues surrounding the necessary planning and building permits.
Unauthorized additions were made, including a third floor and other facilities. Instructions to suspend work and demolish the unapproved additions were ignored, while decisions were subsequently taken that effectively pardoned or legalized the owner’s planning violations.
It is telling that Iraklis Achniotis, the former licensing director at the Paphos District Local Government Organisation, refused for months to sign the building permit despite pressure to “close” the matter.
His refusal was based on the fact that the project’s owner was openly pressing ahead with construction and completing the hotel in breach of planning regulations, while blatant unauthorized structures and other violations remained on the property.
The development in Trozena presents a more complicated picture.
The village was abandoned decades ago. The investment plan includes 60 homes, largely through the restoration of old residences, as well as tourist facilities, a campsite and a winery.
Excavation work, other interventions, and extensive heavy construction were recorded in the area while permit applications were still being examined. The Environment Department and the Limassol District Local Government Organisation subsequently requested a comprehensive master plan and ordered the suspension of all work requiring a permit.
The significance of what happened is heightened by the area’s connection to the Natura 2000 network.
Environmental organizations have reported landfilling, tree cutting and interference with a riverbed. They have also raised the possibility that the work may be linked to the drying up of Trozena’s well-known waterfalls.
That alleged link remains a claim and has not been established as a proven cause. But that is precisely why the order of events matters: an environmental assessment is supposed to come before an intervention, not explain after the event how the damage already done will be managed.
What makes the Trozena case more complex is the strong support for the investment among local bodies. They argue that it could restore economic activity and infrastructure to an abandoned village and a wider area that has been steadily declining.
It is an argument that cannot simply be dismissed. But it does not answer the central question: Why should construction come before permits and regulations?
The Polemidia project is one of the largest private educational investments undertaken in Cyprus in recent years.
The school, initially presented as the Cyprus Jewish Academy of Excellence and now promoted by the Yael Foundation as the Yael Private School of Limassol, represents an investment of more than €50 million. It is designed for up to 1,500 students and is expected to open in 2027.
The project is headed by Rabbi Yehoshua Smukler, an educator with many years of experience managing Jewish schools and a long professional career in Australia.
Smukler has described the new school as the future “cornerstone” of Cyprus’ Jewish community, saying its operation would make the island an even more attractive place for members of the community to live.
He has spoken of a small but rapidly growing Jewish community in Cyprus, which he estimated at about 4,000 families. Under the project’s vision, the school aims to become not only an educational institution but also a focal point for Jewish life on the island.
The objections in this case have mainly concerned the project’s location and planning implications. They were raised by Polemidia Municipality, which expressed concern that such a large development would worsen congestion and place additional pressure on local infrastructure.
The municipality also complained that the decision was made without informing or consulting it.
“Instead,” Polemidia municipal secretary Yiannakis Kallikas told StockWatch on May 15, 2025, “the company has fenced off the site, and excavation work has begun.”
Inevitably, his statement raises questions about the licensing process, where an interesting contradiction emerges.
In February 2025, reports in Israel presented the project as a done deal. Journalists were given a tour of the site, where heavy machinery was already present.
However, Cyprus’ Education Ministry said on Feb. 7, 2025, that no application to establish the school had yet been submitted.
The ministry also made clear that Cypriot law does not permit an exclusively religious school in the sense that students could be required to receive instruction in a particular faith. The clarification appeared to respond to the way those behind the project had presented it.
By May 2025, the information had changed. Reports said the architectural plans and the application to the Education Ministry were nearing completion, with sources close to the foundation describing the ministry’s position as positive.
The outstanding approval matters for several reasons. No private school may operate in Cyprus without the education minister’s authorization.
Approval requires, among other things, planning and building permits allowing the premises to be used as a school, a final approval certificate, suitability and fire-safety certificates, and approval of the curriculum.
In October 2025, the Finance Ministry included the Cyprus Jewish Academy of Excellence on a list of major investment projects either under way or being planned that were expected to influence economic activity in Cyprus.
The school appeared in the ministry’s Macroeconomic Outlook presentation under “Major investment projects.”
The timeline stated that the architectural plans were being finalized, along with the application to the Education Ministry for a private school license.
In other words, as late as October 2025, the Finance Ministry itself continued to describe the licensing application as a process that had not yet been completed.
To date, we have been unable to identify any public announcement confirming that the Education Ministry’s licensing process for the Yael Private School has now been completed.
What can be confirmed is that the trading name “YAEL PRIVATE SCHOOL PRIMARY” was registered with the Registrar of Companies on July 10, 2026. Its registered address is 1 Filias Street in Polemidia, and its owner is THE PRIVATE SCHOOL YAEL LTD.
That registration concerns a trading name. It does not, by itself, constitute a license from the Education Ministry to operate a private school.
There is one final detail that raises further questions. According to the Polemidia municipal secretary, the municipality had previously sought permission to build a sports center at the same location but was unable to secure approval.
Is this a form of “soft colonization"?
Cyprus’ relationship with Israel—and the major trap
The three cases could perhaps be regarded as further examples of Cyprus’ familiar disorder in planning and other areas.
However, they are unfolding at a time when the growing Israeli presence in Cyprus—particularly in property and major developments—has begun to prompt a broader social and political debate.
That debate is intensifying as the Israeli presence on the island becomes increasingly visible and, more importantly, leaves a larger, stronger, and more permanent footprint through the creation of infrastructure serving a community that, to a significant degree, is settling and building a life here.
This discussion cannot be ignored. But neither can it be allowed to slip into sweeping and simplistic generalizations.
It is within this environment that references to “Israeli infiltration” and even “soft colonization" have begun to appear.
Such descriptions should not be adopted lightly. They can easily lead to exaggeration and generalization, particularly at a time when the conflict in the Middle East has added intense political and emotional weight to the public debate.
It would be wrong to demonize the Israeli presence. But it would be equally wrong to dismiss public concern as prejudice, xenophobia or, more seriously, antisemitism.
Beneath the unease are genuine issues: a rapidly growing economic and social presence; strong demand for property that is adding to the housing crisis; land becoming concentrated in the hands of foreign owners; and developments that raise suspicions of preferential treatment.
These indications are enough to justify a serious political discussion.
It is a fact that the Israeli presence in Cyprus has increased noticeably in recent years. Along with it, concerns that were once expressed only by isolated voices have become more widespread.
The purchase of land and property is the most visible sign of this change. Israelis are among the most significant groups of foreign buyers, particularly in Larnaca, Limassol and Paphos, at a time when affordable housing is becoming increasingly difficult for Cypriots to secure.
That does not mean foreign demand is the sole reason prices are rising.
Concern becomes more intense when the discussion turns to how much land is changing hands, which strategically important sectors are passing into foreign ownership and which areas are being bought up.
At the same time, the creation of businesses and infrastructure catering to the needs of a growing Israeli and Jewish community reinforces the impression that this presence is no longer purely about investment or tourism. It is taking on the characteristics of permanent settlement.
Against this backdrop, concerns are beginning to emerge about possible changes to the character of certain areas, the creation of more closed communities and other related issues.
Larnaca is perhaps the most telling testing ground for this change.
For decades, the city felt it had been left behind by Limassol and Paphos. It has now suddenly attracted greater investment interest, new construction, more businesses and a much stronger international presence.
Israeli demand has contributed to that transformation, and its positive effect on the local economy cannot be ignored.
But that same success also creates pressure. When demand for property rises much faster than supply, prices follow. When new families settle permanently, they naturally need schools, places of worship, businesses and community facilities.
The result is not necessarily negative. But it represents genuine social change—and social change cannot be left entirely to the market.
Ultimately, the greatest responsibility rests with the state itself.
Cyprus has learned to measure the success of investments in millions of euros, companies, tourists and jobs. It is less clear whether it has learned to measure success with the same care in terms of how many square meters of land are changing hands, the concentration of property ownership, pressure on housing prices, the burden on infrastructure and changes to the character of particular areas.
An investment can benefit GDP while also making housing less accessible. It can increase the value of one person’s property while pricing a younger person out of the market and placing pressure on local communities.
There is no contradiction in this. There are different interests that the state has a duty to balance.
Cyprus needs foreign capital, businesses, expertise and people willing to settle here and generate economic activity.
But an open economy does not mean a defenseless state. A business-friendly environment does not mean flexible rules that change according to the size or origin of the investor standing before the authorities.
If society comes to believe that the strategic importance of relations between Nicosia and Tel Aviv means tolerance, exemptions and an “anything goes” approach, the damage will be twofold.
Public acceptance of a relationship between the two countries—one that Cyprus has every interest in keeping strong—will begin to erode.
