The Cyprus real estate sector is seeing more growth and development, especially with the move towards more upmarket projects that are attracting international investment, says Michalis Hadjipanayiotou.
Established in 1945, Cybarco is the leading luxury property developer in Cyprus. Part of one of the island’s largest corporations, the prestigious Lanitis Group, Cybarco is responsible for bringing many landmark projects to fruition – including the renowned Aphrodite Hills Golf Resort, and Limassol Marina, the first residential marina project in Cyprus. With operations in Cyprus, Greece, Qatar and Bahrain, the company is involved in a diverse range of residential, leisure and infrastructure projects and has earned its reputation for delivering unique and top-quality developments.
Cybarco is a household name in the Cyprus real estate sector, can you give us a brief overview of the company’s current profile?
Our core business is property development, but we also have a construction division called Cybarco Contracting, responsible for projects in Cyprus and the Gulf area. Locally, our key development area is Limassol, where we had record sales in 2016 from our two flagship projects, The Oval and Limassol Marina. Both have been extremely successful, with well over 97% of space sold at The Oval and residential sales and reservations at the Marina exceeding €370 million. Our current focus remains in the luxury real estate segment, with more plans for Limassol, as well as the Akamas area. The main target market for us is Russia, from where we have seen stable demand for our projects, but we have witnessed the emergence of a secondary market from Arab countries, the investors of which are showing a growing interest in our island. Cybarco’s strength is creating big projects with solid design concepts, and this is how we add value to our customers.
Following the success of The Oval and Limassol Marina, do you have any new projects on the horizon?
Our upcoming project is ‘Trilogy Limassol Seafront’, which is expected to be launched within the year. With around 50,000 square metres of residential and 10,000 square metres of commercial space, including restaurants, retail shops and a spa, our aim is to turn our focus to the more efficient and aesthetically enhancing use of urban spaces. Part of the plan is to create a large and inviting plaza for people to gather and enjoy the location. We have designed an environment where people can live, work and play in the same vicinity, enjoying high standards of living. Our target is to launch sales by the end of 2017.
Our Group is also developing a residential golf project called the ‘Limassol Greens’, which will be adjacent to the upcoming, and the country’s first-ever, luxury casino resort. We are in the final stages of acquiring all the necessary planning permits. I think this area will become a great new destination in Limassol once both the casino and our golf resort, which will include villas and apartments, are completed. Limassol will be the only city that has a 20km seafront promenade, a luxury marina, a world-class casino and a top-tier golf resort. This will ensure the city has a multitude of attractions and entertainment to enjoy 365 days a year.
What do you think is the secret of Limassol’s attractiveness and what other regions are interesting for luxury property investment?
The nice thing about Cyprus is that it is so diverse, all the areas of the island have their own unique character that attract different nationalities and demographics. Limassol has a winning combination, and is well suited to the high-net-worth individual (HNWI). The city has some of the best restaurants, the most upscale hotels and a beautiful seafront and marina. In addition, Limassol is also home to a world-renowned shipping and forex industry, and boasts a fast-growing financial services sector with many multinational companies basing their operations there. The high-end market looking for luxury property and a Mediterranean lifestyle will find unique value in Limassol. But of course, although at the forefront of the property sector in Cyprus, Limassol is not the only attractive area, for example, the Akamas Peninsula offers great potential for further development of luxury projects. It is a naturally beautiful area of the island, but it still does not have much infrastructure, so its main attraction at the moment is exactly the peace and quiet and privacy it offers.
What opportunities are there to optimise existing projects and to diversify the offering to visitors and investors?
Limassol Marina is a great example of a diverse development, which combines both the luxury aspect of a marina and its privacy, but also access to city life, as it is located in the heart of Limassol. This is unique as most marina developments around the world that combine residential and commercial spaces are located outside cities and urban areas. I think Cyprus is moving in the right direction in building more marinas around the island, as it will help further develop nautical tourism.
Cyprus already has several marina projects underway, which will help accommodate tourists who wish to cruise around the island and have genuine and diverse experiences at different harbours. The goal is to attract more yachts and superyachts as well as a higher calibre of visitor who seeks high standards and varied experiences. Although Limassol Marina has already attracted some of the most world-famous yachts, there is still a need for better infrastructure to meet the demands of wealthy visitors, because we are competing with many other luxury Mediterranean destinations.
Cyprus is still relatively undiscovered in terms of yachting, and with more marinas soon in play we can also boost the image of Cyprus as a luxury tourism destination. What these types of visitors are looking for is good service and entertainment, as well as top-notch facilities and infrastructure.
How has the demand for commercial real estate evolved in Cyprus?
What we have seen through our Oval project is that there is high demand for commercial and office real estate, as we saw record sales over the last year or so. Both the capital city Nicosia as well as Limassol have started creating better office space to keep up with the demand for high-end real estate, so we are seeing a lot of activity on this front which is excellent for the country. Also, the fact that more international companies are seeking to set up headquarters in Cyprus is boosting both the commercial and residential property market, with staff looking for homes in the vicinity of their offices. Attracting more headquarters to Cyprus would bring multiple benefits, not only to the real estate sector, but also to the wider economy, with more professionals moving in, paying taxes, and using all the various services our economy provides.
In order for Cyprus to attract more serious players and big investments, as well as headquarters, it is crucial to expand the availability of premium office space and offer more targeted incentives, such as tax breaks for professionals who relocate to the island. Cyprus has already launched a series of incentives, but we need to keep looking at what other jurisdictions are offering and ensure we have a competitive edge.
How have your key markets evolved in the past year and what trends do you foresee?
Russia is our largest market, and there has been a long-standing interest in Cyprus. Russians traditionally like Cyprus because they feel welcome and enjoy the lifestyle. Current developments, such as the economic challenges in Russia and its knock-on effect on purchasing power are not helping us, which is why we must ensure that our sector is able to offer the right project at the right value to guarantee future interest from this key market. Having said that, I am convinced that Russia will remain our biggest market. Despite the volatile market conditions around the world over the past decade, I think Cyprus has retained its appeal, but we cannot become complacent and must keep developing to ensure we remain attractive to various countries and types of investors.
How can the government improve the administrative processes for foreign investors?
The government is business acute and is working on reducing the amount of unnecessary red tape, an aspect that is often noted as the biggest nuisance by foreign investors looking to set up in Cyprus. Of course, the problem of bureaucracy is not unique to Cyprus, as every country struggles with this aspect, but we must offer better and faster service to potential investors so that we do not lose them to other jurisdictions.
What are the most promising sectors in the Cyprus economy at the moment?
By default, the development sector is bound to grow. It is an economic driver and all the conditions are in place for achieving good results. Services are the backbone of Cyprus and the corporate side will continue to grow and evolve to meet the needs of international business. The tourism sector is already doing well and I think it will boom in the next few years, especially with so many new hotels springing up and once large projects such as the casino and the Limassol Greens golf resort are finalised and start accommodating their first visitors. The education and health sectors have a lot of potential, but are in need of more strategic vision and initiatives to attract more investors. Having said that, due to its size, Cyprus can always be a step ahead of what’s expected from its visitors and investors, there is great flexibility and speed in our adaptation. We are on the right track, but we must stay focused on staying competitive and attractive in the eyes of the world.