19.11.2022
The pandemic and the recent war in Ukraine have brought significant changes to the real estate industry, with the property market in Cyprus, despite the many challenges it faces, proving to be particularly resilient.
The X-Ray of the real estate market is captured in the EY Attractiveness Survey Cyprus 2022 on How Cyprus Can Qualify for Investment in a Disruptive World, and the findings are summarized in a related study report that provides a clear picture.
As noted in the report, the real estate sector accounted for 16% of the country’s gross value added until 2021, despite the impact of the pandemic on the market and, especially for Cyprus, the cancellation of the Cyprus Investment Program (CIP).
The report points out that the pandemic has been a major driver of change in the global real estate market, with the reshuffle affecting local markets as well.
Chief among the changes brought about by this is that, as a result of the spread of e-commerce, warehouses and distribution centers – like real estate – are now more profitable than high street stores.
In addition, due to the fact that at the height of the pandemic, the remote work model was tested and proved to be successful, large organizations are now moving to hybrid work models in order to reduce office costs. It is noted that this may lead to less urbanization, when workers who will work from home “leave” the city center.
A special operation in Ukraine is added to the package of problems facing real estate. The military conflict between the two countries has created turbulence in the supply chain and rising prices for materials and energy. The report notes that the financial sector will suffer, and the cost of construction is already rising, as are the prices of building materials.
In particular, with regard to Cyprus, where several Ukrainian and Russian companies work and are based, it is emphasized that they have already mobilized their forces to transfer their employees to the island. This fact creates more pressure on the property market, especially in Limassol and Paphos where more property is being sought. This trend is expected to continue in both the short and medium term.
Outstanding Investment
However, despite any challenges and changes caused by the pandemic and the war in Ukraine, the Cyprus real estate market has proven to be particularly resilient, as multi-million investment and development in this sector has not disappeared.
Characteristically, the report identifies and cites some of them, such as the development of a joint venture by Kition Ocean Holdings in relation to the construction of the wharf and port of Larnaca. The project, which will cost in excess of 1 billion euros, includes a new marina, port and mixed-use development.
As further stated in the report, Paralimni and Paphos are planning to build marinas of a similar type on a smaller scale. The first marina in Ayia Napa was completed this summer. As the report highlights, these types of developments add value and create investment opportunities for nearby areas.
Another registered investment concerns Limassol, where Israeli investor Gilad Shabtai recently purchased 130,000 sqm of land. near the casino “City of Dreams Mediterranean”. His plans include high-end residential, commercial and entertainment complexes.
In addition, the acquisition by foreign investors of land plots in the coastal areas to the west of the city, such as in the Tsiflikoudia area, and the acquisition by the Israeli companies Dorsel (BAZ) Ltd and Ari Real-Estate (Arena) are also highlighted. the purpose of expanding and modernizing the shopping center.
