Luxury properties and high-rise buildings are currently driving Cyprus’ construction sector forward. However, demand will shift in favour of more conventional villas and apartments in a few years’ time, predicts George Chrysochos, second-generation CEO of Cyfield Group, one of Cyprus’ largest vertically integrated construction companies.
Can you please give us a brief introduction to the Cyfield Group?
We started out in 1990 as a small construction company in Nicosia, developing villas, apartments and offices, but we quickly looked beyond Cyprus’ shores. In 1996, we expanded into Athens and began developing real estate in Greece. A big step forward was our decision in 2001 to expand into the contracting industry – the construction of both public and private infrastructure is today a very important business for us. To break into this market, we acquired a classic contractor, a company called Nemesis, which we then integrated into the Cyfield Group. We quickly expanded and established ourselves as one of the most respected contracting groups in Cyprus.
Today, we are specialists in the construction of complete sewerage systems, as well as roads, motorways, bridges, tunnels, dams, breakwaters, public parks and environmental refuse rehabilitation projects. We have one of the largest machinery and equipment fleets in Cyprus necessary to complete these kind of projects. In 2014, we won infrastructure projects in Egypt, including the construction of a motorway. The projects in Egypt have all been completed now. Our primary focus is now on our home market since Cyprus’ construction sector is booming. We are currently handling projects worth €245 million as a contractor, while we manage private projects, including our own developments, worth €100 million.
What sets you apart from your competitors?
After we acquired Nemesis, we realised that we require a fully integrated structure in order to be truly competitive. Today, we own two quarries from which we get our base materials, cement and asphalt plants, as well as factories producing products used in our construction projects. This structure gives us the edge against our competitors and helps us win contracts from the public and the private sector. It is also important when we realise our own projects as we can streamline and optimise our operation. We are very reliable when it comes to project delivery. We have our own architects, engineers, technicians, machinery and materials – we can execute fast without compromising quality. In addition to our 600 employees, we work with 300 exclusive contractors. That’s why both government and the private sector trust us. Even other developers, our competitors, are approaching us at times so that we help complete their projects. I’d also like to point out that despite our rapid growth, the Cyfield Group is still a family business. Since my father founded the company, we have been committed to the same principles, values, vision and mission.
What would you highlight as Cyfield’s greatest achievements in recent years?
We have completed the 360 Nicosia, which is the largest completed high-rise development in Cyprus for the time being. The iconic building is 135 metres tall and covers an area of approximately 34,000 square metres. It has 34 floors, 120 apartments, three commercial shops, two restaurants, a swimming pool and a gym, a residents' club, and three underground parking lots with 235 spaces. There are currently larger buildings under development, but I am certain that the 360 will remain a landmark for the city due to its unmatched views.
We have also branched out into the energy sector. Back in 2013, we started producing photovoltaic parks, and in 2018, we bought a company with a licence to build a gas-fired power plant, which we are currently constructing and should be completed in two years. We would become the first private company to produce and market electricity in Cyprus, breaking into the monopoly of the Electricity Authority of Cyprus. The plant will be able to produce up to 260 MW of electricity for Cyprus, which is around one fourth of energy currently being produced in Cyprus. The state-of-the-art plant will be very efficient, which will allow us to provide cheaper electricity to consumers.
How is the coronavirus pandemic affecting Cyprus’ construction sector?
The industry is still doing very well. I’d say that covid-19 did not affect the sector at all – at least not for the time being. The construction industry in Cyprus was very vibrant before the pandemic hit due to the large number of high-rise projects that are being built all over the island. Many of the developments aimed at foreign buyers have been sold on plan before covid-19. They are still under construction, and the industry is now working hard to complete all these projects.
I expect to see a slight decrease in foreign sales because potential buyers are not able or willing to travel at the moment. Many in the industry are developing tech tools to showcase their properties but I believe only a small minority will be willing to buy real estate online – perhaps 10% of all buyers. However, buyers are only delaying their purchase decision – the market will catch up as soon as people will feel comfortable travelling again when a vaccine or a treatment has been found.
As a company, we focus on developments that are attractive to both locals and foreign buyers. Local demand has not been affected by the crisis for the time being. In addition, government – in an effort to increase fiscal spending and compensate for the loss of money in the tourism industry – has embarked on a number of infrastructure projects that are keeping the industry busy.
Globally, we are seeing a lot of innovation happening in the construction industry, ranging from new building materials to energy-efficient and smart systems. What can you tell us about Cyfield’s approach to these new trends and developments?
I can safely say we are pioneers in Cyprus when it comes to building innovation. For instance, we were the first ones to install underfloor heating in our buildings, which has quickly become the standard. We are now using smart systems in most projects, which control and improve the efficiency of heating and cooling. We have 30 plus projects, so we cannot not follow the latest trends. However, for us it is not just about technological advances and gadgets, but also about finding new and better ways to achieve the same or even higher functionality—with less resource-intensive materials or new approaches to design.
We are constantly looking at new materials that improve insulation in terms of both sound and temperature. We often select new aluminium solutions or glass products that come onto the market.
What are Cyfield’s three greatest challenges at the moment?
Our firm grew rapidly during the past years. Managing this expansion is definitely one our greatest challenges at the moment. Because the company and the industry is so busy at the moment, it is increasingly difficult to find skilled and experienced personnel. For instance, right now we have 30 open positions, which we cannot fill.
The other challenge is to complete all the projects currently under construction. The power plant is a €200 million-project on its own and is very important for us. The third challenge is to keep up to date with the latest trends – we have six in-house architects who are keeping abreast with developments. We always want to offer the best possible product to our customers.
What opportunities for growth have you identified?
As a company, we are more at the stage where we are realising and executing already confirmed projects instead of chasing new opportunities. We are firmly focused on our home market in Cyprus at the moment. However, we know we have the expertise required to execute projects abroad should an opportunity come along.
In Cyprus, I see a big opportunity in developing and delivering top-notch office spaces. We are currently designing an integrated business campus, including office spaces, childcare facilities and a gym. We are looking at Canary Wharf in London or Silicon Valley as models to emulate.
How do you believe the country and the construction sector will develop in the coming three to five years?
I think the future for the country looks great. Cyprus is establishing itself as a popular headquartering centre. Companies are bringing more and more staff over, in the shipping, IT and financial sector. We are moving towards real and substantial growth, and we have all the infrastructure and facility to support this growth. The discovery of natural gas will be realised and monetised in the next 10 years and will be an additional benefit to the country.
The construction industry is going through a boom phase, which I expect to last another three to four years. Government’s infrastructure needs would have been met by then, and I also expect to see a small reduction in sales related to Cyprus’ citizenship-by-investment programme due to the stricter requirements that have just been introduced.
I also think that the type of property that we will be selling will change in the future. Right now we are selling a lot of high-end properties and luxury villas, but slowly we will see a shift to more conventional properties, such as villas and condominiums, that have traditionally been the bread and butter of the Cypriot construction sector and will play again an important role in the future.