23.05.2024
According to a recent study of the Cyprus property market, office rental costs are rising across the island, reaching their highest level in five years. The rise in demand for office space, driven by increased foreign investment, has attracted the attention of many stakeholders.
According to international real estate consultants and appraisers Danos , office rental prices across the country rose by about 8.5% year on year in the first quarter of 2024. Compared to the same period in 2019, the growth is about 10%.
Office rents have fallen during the pandemic, reaching their lowest point in the first quarter of 2022, about 14% below current levels.
According to Danos, the largest increases in office rental prices were recorded in Limassol, Larnaca and Nicosia.
In Limassol, office rents in the first quarter of the year were €25–50/ sqm in 2024, compared to €20–45/ sqm . in 2023, representing an average growth of approximately 18%. In Larnaca, office rental prices have almost doubled and amount to €15-20/ sq.m this year compared to €8-12/ sq.m . in 2023. In Nicosia , office rental prices in the first quarter of 2024 are in the range of €15–30/ sq.m compared to €12–23/ sq.m . in 2023. In Famagusta, office rental prices range from 10 to 15 euros per square meter, compared to 5 to 12 euros per square meter in 2023. In Paphos, office rental costs in 2024 are estimated at €10–15 per square meter, compared to €7–10 per sqm in 2023.
Office sales prices
In terms of sales, in the first quarter of 2024 prices remained at 2023 levels, with increases recorded in Larnaca and Famagusta .
In Limassol, prices have more or less remained unchanged since 2023 and range from 5,000 to 6,000 euros per square meter.
Similarly, prices in the capital range from €3,000 to €4,500/ sq.m . , which is close to the 2023 level.
In Larnaca, office sales prices in the first quarter of 2024 increased to €2,500–3,500 per sq.m. from €2,000–3,000/ sq.m . in 2023.
In Famagusta, prices increased to €2000-2500 per sq.m from €1500-2000/ sq.m . in 2023.
In Paphos, prices remained the same: €2000/ sq.m . – €2500/ sq.m . compared to 1,500 euros in 2023.
High demand for class A offices
Demand for modern Grade A offices is expected to continue through 2024, driven by both the private and public sectors.
Businesses and organizations are looking to move from old buildings to modern, energy-efficient facilities.
The current supply of offices, as well as projects in the pipeline, will balance prices in the medium term, albeit at relatively high levels due to demand, costs and new standards.
“We are at Danos International Property Consultants and Assessors received a request from a large company operating in the oil refining sector that wants to move into offices with increased energy consumption,” Kyriakos said Kiliaris , Marketing Director. “In addition, foreign investors are looking for investment opportunities by buying offices to rent out to companies looking for a base in Cyprus.”
Danos recently carried out a valuation study that facilitated the sale of office premises valued at approximately €40 million to a real estate investment company (REIC) from Greece.
The commercial property investment market in Cyprus remains particularly attractive, in contrast to trends elsewhere in the world. Many companies choose to locate their offices here due to the quality of life, strategic location and tax advantages. However, many commercial buildings are outdated and with the influx of international companies there is an urgent need for new, modern buildings with the latest energy upgrades, highlighting the need for stakeholders and government to develop a joint action plan.
