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By Antonis Loizou F.R.I.C.S. – Antonis Loizou & Associates Ltd – Real Estate & Project Managers
Among the many large-scale projects we are anticipating, such marinas, golf courses, casino and 30-floor beachfront high-rises, foreign buyers are once again showing the way to alternative investments. In a way, this is what happened with the Israeli investors who put up the first high-rise of its kind, the Olympic Tower in Limassol, that that opened the eyes of both state officials and local developers alike, as regards a new age in land planning.
Recently, however, my office has received a lot of interest for investments in farmland, arising mainly from Israel, as well as South Africa and investors from as far away as New Zealand.
The island’s accession to the European Union and the generous subsidies offered to the agricultural sector make investments in farming even more attractive, as is also the case of the protection of local crops and food produce as unique to Cyprus.
Apart from the halloumi, which was the beginning, we have now seen more traditional local products, such as the Yeroskipou loukoumi and Paphos sausages, the kolokasi from Sotira, etc. At the same time, other rare products, that are causing a stir in the health food sectors should also not be ignored, such as carobs, prickly pears, aloe and much more that are in abundance because of our climate.
One investor from South Africa asked us to lease 1 mln sq.m. in order to start mass production of olive trees, while another from Israel showed interest in harvesting prickly pears (papoustosyka) in large volumes.
Recently, though, there has been growing interest from Greece for the development of aloe vera, a plant that requires little water and flourishes in Cyprus, following on similar investments in Crete.
However, one should also note the lack of sufficient vineyards where production of certain types of wine-making grapes is limited due to an absence of vast estates.
To all this, we should add the University of Cyprus that recently embarked on a sustainability project and planted 50,000 carob trees, while the students and academia have also dabbed in the production of the local spirit zivania, produced from different fruit, as well as the development of aromatic herbs, such as lavender, which has attracted some investors to specific areas, as is the case around Platres.
It us worthwhile, then, to explore investments in the farming sector and with some help from the Ministry of Agriculture, the potential results and yields may be considered.
Of course, we are living in an age of climate change and water scarcity, but for many of the plants and produce that I mentioned irrigation does not have to be in abundance. At the same time, there is the potential use of recycled water from the biological treatment plants, most of the output of which pours back to the sea and is wasted.
The problem that needs to be resolved is the size of the farmlands. Many are small units that force the farmer/investor to spread out his output on various units while finding adjacent land to lease on a short or long term, could be just as difficult.
The prices of farming land are presently at their lowest level, while this level remaining steady is sure in the medium-term range.
The government’s limitation on the building coefficient for houses on agricultural land has kept these property prices depressed at low levels, which you might say is good for the farming industry.
At the same time, there are vast tracts of land (Mesaoria plain, Morphou area, Potamia near Larnaca) that are unutilised as they do not have access to water, despite their proximity to water treatment plants.
The Ministry of Agriculture must initiate some sort of investment plan and incentives for newcomers into the sector, perhaps in combination with reforestation plans, so that other areas can become viable as well.
What the potential investor from Crete was impressed about was that God gave Cyprus a lot of fertile soil, while on their island all they have are rocks. The investors from Israel explored the south eastern areas of Paphos for prickly pears, while those for aloe were keen on the Moni area.
On another occasion, a Russian investor also considered that apart from the cost of production, the investment should also consider the matter of packaging of the fresh produce in order to make it appealing in the international markets, and that regardless of the naming, you can sell vodka outside of Russia, whisky outside of Scotland perfumes outside of France. So, the future is local traditional products, but after that starts the difficult journey of placing them in the international markets.
On a final note, consider that in the case of leasing (investing) in arable land, in the case that a drought is declared for one year, then the rental agreement is extended to the next year, regardless of the expiry of the agreement.
