Major commercial and development projects that have recently been completed or are underway add to the confidence that is gradually returning to the banking sector, with the property sector also expected to recover in 2015, albeit slowly.
Apart from the Limni golf resort being developed by the Shacolas Group near Polis Chrysochous and the 650-berth Limassol Marina that is steaming ahead to its completion phase, new projects have already started to appear on the skyline of almost all towns, the most important being the 16-storey Oval office in Limassol, a €60 mln project undertaken by Cybarco.
Despite a delay in kick-starting the seafront and marina project, Larnaca is anticipating a major capital injection in the form of an €80 mln luxury hotel complex to be built along the Phinikoudes coastal front, according to Danos International Property Consultants and Valuers.
The project has been approved by the town council and is set to be financed by Russian investors. The agreement also stipulates that a substantial amount of money will go towards the renovation of the Phinikoudes coastal front. Construction is expected to begin towards the end of 2015 and Larnaca Municipality will receive €5 mln from the sale of an adjacent plot, with this money expected to be used to fund a new open market.
Landmark buildings have also gone up and are starting to show their final face.
In the capital, Wargaming, one of the three strategic shareholders of Hellenic Bank, has bought the "President" building from Rotos Developers for €20 mln. The building is located on Demosthenis Severi Avenue, stands 75 meters tall and will be covered by large disk-shaped photo-voltaic panels.
PwC has reached a deal with Cyfield to rent a modern building further up the street near the Presidential Palace.
An office building developed by Cyfield on Limassol Avenue, was recently sold for €3.7 mln to a Belgian Fund, which has also invested €7.4 mln in another nearby building, while the Embassy of Kuwait bought the ‘City Link’ on Armenias Avenue which it had been renting, for €5.1 mln.
Investments have also taken place in the hotel sector, with some properties now closed for refurbishment during winter and planning to open in the summer or even in 2016.
Russian buyers have already invested in three leading hotels. The Alexander the Great in Paphos was sold by Kanika Hotels to the Russian investment company Ruby Coast Properties Ltd. and will continue to be operated by Kanika through a long-term lease agreement.
Kanika International Business Centre, a luxury office development in Limassol, was sold to Russian real estate investors, Bystrema Holdings.
Significant shares of the 5-star hotels Amathus and Le Meridien Spa & Resort in Limassol have also been acquired by Russian investors. Specifically, 75% of the Amathus Hotel was sold for €71 mln and 50% of Le Meridien for €90 mln (including debt), while the construction Company Chapo had reportedly sold a commercial plot 2,500sq.m. in Limassol for €4.8 mln to Lebanese investors.
Other deals involve Leptos, Shacolas, Athienitis and Tofarco. Also, organisations like CNP, USB, IBL, Trust Insurance, PwC, EY and CTO have either relocated their offices or are planning to do so in the near future. Retailers such as Pizza Hut, Divas Melin, Euronet and Electroniki are expanding.
Source: Danos Cyprus Market Report for the second half of 2014 – www.danos.com.cy
