The sudden arrival of the pandemic has brought about radical changes in real estate in Cyprus, accelerating both developments and trends in the sector.
Speaking about the Cypriot and Greek economies at the sixth London Business Summit of the Economist, held last month at the London Stock Exchange, director of Imperio and deputy president of the Cyprus Land and Building Developers Association Yiannis Misirlis stressed that the pandemic has acted as an accelerator in the real estate sector in Cyprus. It has contributed substantially to the adoption of significant international trends that would otherwise have taken several years to be introduced in the Cypriot real estate market, as real estate constitutes one of the less innovative areas of business.
Analysing the new information in the sector, Misirlis referred to the new trends that Cypriot property development companies should focus on in the coming years.
A key factor for the future sustainability and profitability of companies operating in the real estate sector is the integration of environmental elements in their future projects, as the construction of ‘green’ buildings has been gaining more and more ground in the last few years.
Buildings with a high carbon footprint have now increased operational and maintenance costs as well as high insurance costs, and in the future they will also face financing problems, as investors, tenants and banking institutions increasingly turn to sustainable construction.
At the same time, the creation of office spaces – especially sustainable ones – is a field with many possibilities for activity in Cyprus. Even though working from home has reduced the demand for office space abroad, in Cyprus the picture is completely different.
“Precisely because the weather in Cyprus is extremely nice and the cities are not densely populated, there is great interest from companies that wish to transfer their headquarters to Cyprus or open regional offices,” said Imperio’s director.
The field of student housing appears to be a similar case. According to Misirlis, it offers great opportunities for real estate developers, especially in Nicosia and Limassol, where large university institutions are located.
He predicts that with the end of the pandemic and the return of students to halls, there will be a shortage of student accommodation.
The consequences of war
Referring to the war in Ukraine, Misirlis said it would have an impact on the real estate sector, both at the European level and in Cyprus.
“Cyprus real estate managed to reduce its dependence on the Russian market due to the pandemic. What is particularly worrying is not the impact of the war on finding buyers, but the impact of the war on the world economy, such as inflationary pressures and the rise of interest rates and prices on oil and raw materials,” he pointed out, adding that the real challenge is to keep construction costs at controlled levels.
In conclusion, Misirlis stressed that property developers, investors and all those that are active in real estate should show flexibility and adapt to the new situation.
“Those who ignore the dictates of time will face great risks and reduced profits, while projects that do not keep up with current trends will be considered obsolete and will hardly be chosen by buyers and tenants,” he concluded.
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