Real estate news

REInvest Real Estate: Why you should trust a reliable Real Estate Agent

True or false: By using real estate agents to buy your next property, you benefit by gaining access to their expertise, contacts and advice.This is true as long as you first carefully select the right professional, and here at REInvest Real Estate, we feel proud to be the keen experts you are looking for that important decision, at zero extra cost.With more than 40 years of experience, we aim to match your needs, skilfully negotiate the right deal for you, and save you much more than hassle and stress. With REInvest Real Estate, you can gain access to various exclusive listings quickly and discover at the same time off-market property listings and hidden features that don’t show as well on the internet.The REInvest Real Estate team consists of more than 30 full-time professionals, who will work with you to spot hidden costs and potential problems, and to minimise exposure to legal property risks. You can truly rely on our extensive market knowledge and valuable tax guidance and assistance all the way through the complexities of the purchase process, while handling smoothly for you that endless paperwork.REInvest provides you with all the needed services as a trusted holistic Real Estate Office for buying, selling, leasing, and offers as well Property Management and Project Management services with a comprehensive after-sales service. What is also true, is that we can shorten the selling cycle of your property by using the extensive international network, which consists of retail and corporate buyers, investors, funds, real estate professionals, and institutions.You can now trust REInvest as a real estate agent who will guide you effectively with its know-how in the field through your new explorations in life by supporting all your needs and requirements.List your property with REInvest. Contact us at 7778 7771 or +357 22 477 600.Registration Number 1044 | Licence Number 523/E

March 9th 2022

City Plaza: Nicosia’s legendary building for sale

One of the most well-known commercial buildings in Nicosia, is exclusively for sale with Reinvest Real Estate. Located on Makarios avenue, the most central and commercial area of the capital, the City Plaza can be used as a shopping centre with cafeterias and restaurants or as a business office building. Alternatively, it can be used as a combination of shops and offices. With the revamp of the former high-street shopping centre, the City Plaza can now offer very high yields as an appealing investment opportunity.City Plaza is a 4-floor commercial building in excellent condition with a total of 74 shops and a covered area of 4,669m². The top floor is a united lot without any partitions offering freedom of space and individual utilization with an approximate covered area of 1,232m². The rest 3 floors of the building, comprise 19 shops each, with an internal area for each level ranging from 778m² to 943m², which can be also unified as per the top floor to create a bigger office space with the area of 1, 232m².The subterranean basement can accommodate approximately 75 vehicles as well as storage facilities. The parking lot has access to the main lifts that connect it to the whole building.City Plaza is part of the ''Nicosia Local Plan'' and according to the incentives offered, the building coefficient could increase from the current 250% to 425%, as outlined in the “Nicosia Centre Area Plan 2016” and the “Incentive Plan 2016-2019 (for parking spaces for public use)”.For more information, please click the below link:

February 17th 2022

Real Estate Funds – The Asset Management Lifecycle

Real Estate Funds represent over 10% of all Funds registered in Cyprus, as per the latest statistics provided by Cyprus Securities and Exchange Commission. Indirect investment in Real Estate (hereafter referred to as ‘RE’) through Funds is popular, as it allows investors to access large projects and provides investors with a level of professional management to which they may not have access, should they attempt to replicate the strategy themselves.Management of a Fund’s RE assets occurs on multiple levels and requires a multi-disciplinary team of professionals. In addition to the financial professionals at Fund level, the involvement of real estate professionals such as civil engineers or lease experts is required at Fund, Asset and Tenant levels.To highlight the various professionals involved in the management of a RE Fund, we provide a case study. This case study will focus on a “Turnaround Fund” which will acquire a residential block, with the view of converting it into office space, leasing the units and subsequently exiting the strategy via sale at the end of the Fund’s life.The investment process begins with the Fund Manager who is responsible for setting the investment strategy of the Fund and ensuring that strategy is implemented, to deliver target returns within the relevant risk and time parameters outlined in the Fund’s Prospectus. The investment strategy is set by the Fund Manager’s Investment Committee and is implemented by the Portfolio Managers and overseen by Risk Managers, who will collectively perform what will be referred to in the context of this article as ‘Fund Management.’The term ‘Asset Management’ will be used to describe the efforts made to maximise a property’s value and returns, and are performed by RE professionals at Fund, Asset and Tennant levels. RE Asset Managers are responsible for various tasks including assistance in the due diligence stage (acquisition and disposal), and oversight of assets during the Fund’s lifecycle. RE Asset Managers and the professionals who support them, may be employed by the Fund Manager or its affiliates (collectively the ‘in-house team’) or outsourced to third parties. RE Asset Managers will take instructions from, and report to, the Fund Manager’s Portfolio Management Function on a regular basis.Once suitable candidate assets have been identified by the Fund Manager, the RE Asset Manager will perform the necessary due diligence. It is important that the RE Asset Manager is involved early on, to identify any property related shortfalls or risks that might come about, such as inherent (e.g., structural issues) or extraneous (e.g., tenants under rent control legislation).Upon completion of initial due diligence stage, the Fund Manager and RE Asset Managers will discuss property specifics to ensure that characteristics are reflected in the forecast performance. As the Fund in our example has a turnaround strategy (i.e., the conversion of residential to offices), key metrics would be the Estimated Rental Value (ERV) to be generated by the conversion, and the Captial Expenditure (‘CAPEX’) required for the conversion to offices of the required calibre as per Fund objectives.Once the property has been deemed as suitable by the Fund Manager and acquisition is complete, the RE Asset Manager will ensure that the execution of the property conversion in line with the architectural plans, CAPEX and timeframes agreed, to ensure returns are maximised.Amongst the RE Asset Manager’s first direct actions will be the appointment of a Property Manager, who may be part of the in-house team or a third party, to undertake the day to day functioning of the asset. The Property Manager must be involved from the start of the project, ahead of any construction works to ensure procedures are put in place and agreed internally before any actions are taken by leasing agents to attract prospective tenants.Furthermore, the Property Manager will identify any pre-existing problems (e.g., undocumented consumption of utilities due to absence of utility meters) and act to resolve them well in advance. The Property Manager may also weigh in on the construction works in terms of phasing and developing handover protocols to enable partial occupancy where applicable (i.e., if a multi storey conversion from residential to a commercial building).The RE Asset Manager will also appoint and oversee the involvement of a Project Manager, who again may be part of the in-house team or a third party, to deliver the refurbished works on time and inform the RE Asset Manager of any potential delays which may impact the investment returns, requiring adjustments to the leasing strategy.The Fund Manager will actively monitor developments once the building works have been agreed and commenced on site through reports prepared by the RE Asset Manager, concentrating on attracting leasing agents to market the property and securing tenancy contracts. Property Managers will again be involved, dealing with queries from prospective tenants.Amongst the key objectives given by the Fund Manager to the RE Asset Manager is the maximisation of rent and return of properties owned by the Fund. Therefore, negotiating contracts with estate agents, and implementing a strategy to both attract and retain tenants is crucial. To do so, the RE Asset Manager needs to assess external factors in the wider real estate market to assess competition and trends in the office space sector, and determine the approach in terms of tenancy length, renewal periods and other relevant commercial terms. These are then reported to, and discussed with the Fund Manager, who will in turn factor in micro/macro-economic factors before taking any necessary decisions. The results of insights provided may also be incorporated into the periodic reporting to investors.Upon completion of building works, Property Managers will shift focus to the needs of committed tenants by assisting them to move into the building, following up on communal areas, implementing preventive maintenance and any ad-hoc requests. In doing so, the Property Manager maintains close rapport with the RE Asset Manager, as the latter will be responsible for communicating the operating expenses (OPEX) for this workstream to the Fund Manager. Such provisions are important, especially where unforeseen expenses might come about as in an extreme weather event, in providing justification should additional funds be required.The ongoing responsibilities of a Fund Manager will be then diverted to mitigating liabilities and risk, where applicable, and ensuring availability of necessary liquidity to cover both expected or unexpected expenses or Fund level liquidity requirements such as redemptions, distributions, or expenses.Real Estate Funds require a great deal of work on the development and subsequent management of properties, however the benefits of having an integrated team across the various workstreams cannot be underestimated. Asset, Property and Project Managers provide the Fund Manager with the necessary expertise on demand to ensure all relevant factors are presented for consideration.An integrated team allows for quick responses where conditions dictate, be that on account of external factors such as market factors or asset related ones. An end-to-end real estate solution improves the likelihood of return maximisation by the Fund Manager and of course investors, through smoother communication channels, established relationships, common internal procedures and reporting, and reduced expenses.By Alkis Hajittofis FCA, CFA, Executive Director, Resolute Investment ManagementMelios Price, Supervisor of Property Management, REInvestPanos Hadjichristofis, Director, Resolute Asset Management

January 21st 2022

Important Factors for Property Appreciation

Real Estate properties are an asset class that could potentially (while real estate does tend to appreciate, there are no guarantees) provide, to individuals, a high return of investment.One way of securing a good return is by using the property to collect rent as a landlord. The other primary way that landlords earn money is through appreciation. If your property appreciates in value (we will be looking at how, further on), you may be able to sell at a profit or equally important, to borrow against the equity to make your next investment.In real estate, property appreciation refers to the change of value of a property over time. There are several factors affecting the margin and time frame of property appreciation, the most important of which are discussed below.Property Improvements through property’s features, amenities, and upgrades influence its value. By features we refer to characteristics or fittings that set the property apart and by amenities facilities to provide comfort and convenience to occupiers.For Commercial Real Estate (CRE) this would refer to a few conveniences such as the energy efficiency of the building, the presence of conference facilities, reliable and fast internet connection facilities to enable remoting working across different jurisdictions. Access and ease of parking for clients as well as security and concierge services are often deciding factors in sourcing an office space and as such provides an owner a competitive advantage. Auxiliary facilities to the main function say for an office would be an outdoor/break out space as well as the provision of a cafeteria for the staff. Furthermore, the design of an architecture and the interior of the property can also play their part in price appreciation.In residential properties the improvements would have a range across all the property rooms, such as the example of the dining room where the relationship to other rooms (Dining/family and Dining/living combination) could prove to be deciding factors in renting such a property. Other notable features would be outdoor features such as, swimming pool, barbeque area, garden, an outdoor kitchen etc. Renovating a home’s kitchen could potentially add to its value upon completion. Completing a basement construction, adding a guest bathroom, or upgrading heating/cooling infrastructure for private residences are all valid value-adding improvements.Asset Location, location, location. If the neighbourhood surrounding your property is growing, say in residential area where a high street is being created, adding new local businesses, and opening up more jobs while also offering facilities for homeowners, local house prices tend to increase. If the community is struggling, i.e. crime rates are on the rise, businesses are closing or relocating to other more affluent districts, it usually results in depreciation of the specific property.Infrastructure development and new road transport networks improving connectivity are also a significant factor. As these are often changes taking place across longer periods, monitoring of how the location inherent value is modified is always crucial. Potential homebuyers cite local schools, job opportunities in close vicinity, shops and entertainment choices as the most important factors.Market conditions play an important role in property appreciation as well as the wider area of real estate market dynamic. As a rule of thumb, if properties of a similar size and condition to your own, are in high demand in your area, value will go up. On the other hand, if availability of similar homes rises in the market, value will go down.Lending rates and current interest rates and future trends play a crucial part for real estate appreciation. By providing low borrowing cost to investors and buyers, such as current local government initiatives, will encourage more potential buyers to enter the market. Consequently, generating more demand will create property appreciation. On the other hand, higher rates will reduce the pool of buyers, stifle demand and result in property depreciation.The overall economy (including macro indicators such as employment, population growth etc.) has an effect to a more global scale. When the economy performance is weak and consumers are under pressure, real estate tends to be less in demand. Oppositely, when the economy is strong and employment is up, you often see appreciation rates rising. What is being witnessed locally at the moment is an investment in real estate as a way of maintaining the purchasing power of capital by depositors who have not had good returns from depository products combined with increased inflationary pressure. The inflation hedging capability of real estate stems from the positive relationship between gross domestic product (GDP) growth and demand for real estate.Why choose REInvest as your Consultant?Advice how to showcase the property strong pointsAssist in assessing what are key improvements that could be value addUndertake improvements related to Energy Performance and issue of the adequate Energy CertificateProvide insights through its reports (on website) of the outlook of the marketExecution of remediation works in accordance with terms and conditions of the planning and building permitsGeorge EnglezosGeneral ManagerREInvest AGY Ltd

January 5th 2022

Why hire a Project Manager?

By Spyroulla Odysseos, Supervisor Project Management REINVESTManaging a project without the relevant knowledge and expertise can be a stressful and time-consuming task. This, most of the times, leads to overspending, out of time deliverables, unprofessional work, and litigations. Hiring a qualified project manager moves theresponsibility, stress, and complexity of a project to an expert that can minimise the delays in construction and the cost overrun... Please click below to read the full article.Why hire a Project Manager.pdf

August 30th 2021

A picturesque private retreat villa in Moniatis mountainous village of Limassol, Cyprus

Please click below to read the relevant article.Luxury_Villa_Moniatis_Village.pdf

July 6th 2021

Data driven review of Cyprus' residential market transaction dynamics in 2020, and the inevitable impact of Covid-19.

By Maria Evangelou, Senior Analyst of REInvest’s affiliated companyPlease click below to read the relevant article.Residential_Market_2020_REInvest.pdf

April 9th 2021

The importance and benefits of hiring a Property Manager

By Melios Price, Supervisor Property Management REINVESTManaging properties, whether for an institutional investor or for an individual with a single asset, requires time, effort, and knowledge. Failure to dedicate the required resources can lead to potential loss of revenue, property damage, and unnecessary time delays, turning a potentially profitable asset into a bad investment.The fundamental role of a Property Manager is to provide an end-to-end solution for their clients, ensuring that all day-to-day operations are carried out in a professional and timely manner. Clients ranging from individual owners, building tenants, Developers, lawyers, receivers, and institutional investors will see tangible benefits in hiring a Property Manager. Such benefits include:Property Health & Safety. A Property Manager can carry out inspections to ensure the property is in good working condition and any potential problems are resolved promptly.Management of 3rd party associates. Property Management companies have established relationships with contractors, tradesmen, maintenance workers, etc. which will ensure the client is receiving a competitive price with good quality. Additionally, oversight of any works carried out by associates and facilities management companies can be carried out.Document remediation and storage. A Property Manager will ensure that up-to-date asset-related documents are collected, stored and available for marketing or other purposes.Market Knowledge and suitable tenants. Through established relationships and associates, a client can be brought in contact with licensed agents in order to ensure suitable tenants are selected based on the requirements of the client and to market assets at the right price resulting in maximum income whilst maintaining a low vacancy rate.Management of tenants. A Property Manager will act on behalf of the client ensuring that all aspects of the owner-tenant relationship are managed. Emergency works, routine inspections, and tenant requests will be dealt with.Collection of rents and payments. Ensure rents are collected on time, and outgoing payments (utilities, taxes, communal expenses, etc.) are handled promptly.Reporting and portfolio oversight. Through intelligent business solutions a Property Manager will be able to provide the client with a concise and targeted overview of their portfolio ensuring their requirements and targets are satisfied.Owner representation in Committees. Represent and act in the client’s best interests during building committee formations, annual general meetings, or any other time required.At REINVEST, we aim to provide our clients with the best services possible in Property Management, Project Management, and Rentals/Sales. If you require any further information or clarifications, please feel free to contact us by telephone: 7778 7771 or by email:

February 19th 2021

Scam against Estate Agents

The situation regarding estate agents is not healthy and it is a cause of constant differences between the vendors of real estate and that of the estate agents.Most of the wrongs were corrected in the past by the Estate Agents Law, but there are still evident problems in the relationship of the two parties, which need corrections.As not all estate agents are angels, similarly not all vendors are angels either and we have a personal knowledge on this. There are scams on either party and this article, will address some of the problems that the estate agents are subject to.Unlike in most of other countries, for someone to exercise the job of an estate agent, he must be so registered with the Registrar of the Estate Agents (Governmental Body) who in turn requires that any registered agent must have a basic knowledge of the market and basic educational requirements and to be submitted to a written test prior to registration. Registered agents must keep a proper office, have a professional indemnity insurance, and follow the rules/regulations of the Registrar.Having said that, there are all sorts of people (professional or not) embarking on the estate agency operation, ranging from taxi drivers and bar attendants, to advocates, accountants and others, who by one way or another manage to by-pass the law, claiming that any receipts that they get for a sale, is not an agency commission, but disguised under “promotional fee”, introduction fee etc. Then we have the tax authorities who will not accept such payments, to non-registered agents as being tax deductible with the vendor being in the middle (with the vendor not being able to discount such payments from his sales income).Regarding now the sales commission, the average charge is 3%-5% based on the sales price, if the agent “introduces” a willing and able buyer to a vendor (the word “introducing” is in itself one which is open to various interpretations). As you can appreciate the commission/money is a lot, especially for the upper scale of the market. You must bear in mind that the law stipulates only a 3% commission (if no written agreement), but the parties (agent/vendor) can agree to any commission, provided that is so done in writing (tax authorities will not accept more than 3% if no such agreement). For those who claim a commission under the disguise of promotion, the tax authorities will require details on what promotion has been undertaken at the expense of the claimant, whereas the “introduction fee” which is worldwide acceptable, is also questioned by the Cyprus tax authorities.In more “organized” countries, vendors/agents have an exclusivity agreement for an x period of time (usually 6 months), but, in general locals, including foreign investors/funds who operate in Cyprus, do not accept this, hence we have agents promoting a property at their own expense, but being in a small country where everybody knows everybody, other agents/interested buyers by-pass the agent and express their interest to the vendors directly in an effort to get a reduced price. So, at the end, the non-exclusive agents restrict their promotion, other provide basic information on their website, whereas others just do not bother.Trying to avoid the agent’s commission is quite common and this includes even the large multi (national) investment funds, who, if one does not follow strict procedures of their own, they refuse their obligation e.g. by not filling a certain form (they may be right but at the end of day, what is fair?).Especially during these difficult times of sales, buying directly (buyers/vendors) is to the benefit of both (doing without the commission payment by the vendor and they get a reduced price).In this scam, against the agents, we provide for your consideration the following recent examples. The agent promoted a property and a Chinese client through his advocate expressed interest. A lot of to and from followed through emails with the vendor being duly aware with copies etc. The buyer approached the vendor directly and through his advocate and both claimed that the agent had nothing to do with the deal and with the vendor saying that the agent did not have the buyer signing a certain declaration. End result is that other than the agent, the vendor and buyer are happy for saving the 5% commission reduction. Is this correct mind you? The matter now will follow the legal route with the agent placing a memo on the sale. God knows who will lose at the end.In another example in Paphos, the vendor and buyer tried to by-pass the agent who having found out he placed a restrictive order for transfer (memo), so the whole thing is stagnant. The buyer paid the amount, the vendor cannot transfer and of course the agent was not paid (standstill for the last 8 years – so all lose). A messy situation.On another occasion a Russian buyer demanded that the agent should not be present during the negotiations with the owner. The buyer sued the agent for wrong doings and his witness said that everything was in order by the agent and finally he told his witness that he was trying to get a discount through no commission payment. He even sued the agent for €70.000 in damages notwithstanding that the sale was for €140.000. End result the buyer lost his case in court; a memo was duly placed on the property and everybody is at a standstill.Part of other problems is caused by the agents themselves, trying to “steal” properties registered as such by other agents by trying to by-pass their colleague. There are numerous examples of bad behavior between agents, so the scam is not restricted between vendor and buyers, but also between agents.In ending and unless there is an otherwise agreement, it is the vendor who has the responsibility to pay the commission. So be aware vendors, that any “monkey” business on your side it is most likely that you will pay at the end. Bear in mind that only registered estate agents are entitled to a commission, so any demand by third parties have no right to claim neither their payment is tax deductible).

July 17th 2020

Alone in the Wilderness? – Building Industry

It seems that we are alone in the wilderness of the mess that the building industry is at and by projection the Cyprus Real Estate market.We write in this lovely paper, but as well as others (in total 4 newspapers per week for the last 40 years) on the wrong situation that the building industry is at times and we hope that some people (especially politicians) listen to us (not necessarily we claim the infallibility of the Pope, but we place our views in writing in hope to create some sort of a discussion to get things better).What is most annoying for us, is that the various associations of e.g. architects etc are not bothered neither the association of developers and even worse that of the so called Advisor to the state on technical matters (ETEK) who keep all silent and surface only if their members own interests are negatively affected.From our recent articles (last 3 months) and bearing in mind the virus effects, we have put forward our own ideas on “corrective” measures on the situation, commenting on just about everybody who does not care, including the political parties (all the worst) and sent direct letters to the various Ministers in charge. We give credit to these Governmental actions and mainly to the two Deputy Ministers, as well as the Minister of Public Works and that of the Minister of Health and we criticize others, to the extent that we suggested that a couple of Ministers should be fired for not being up to it for their job. Our articles, being not politically oriented and having in mind only the well- being of the building industry (real estate), so we are not one sided, but we dare express our personal views based on our practical knowable on the subject with our 40 years of front line experience on the matter. We believe that we can offer our experience to the market, but it seems that small politics and personal interests do not help out (which is not always a voting attraction for those hungry to attract voters for them regardless to Cyprus, to this end the voters are exploiting this, since we are used to exchange favors to voters – who indeed checks this?).So here we are, and we provide for your reminder the following headings on matters that we have raised very recently:• The “scam” of working from home (and not in practice) by employees and with this excuse getting paid in the meantime by the Government much at the loss of the business concerns and our economy.• The decision of the Government to guarantee hoteliers for the reservation fees paid (which are in fact loans) is a most dangerous situation open for exploitation – details given.• The actions of Municipalities being involved in all sorts of illegal practices, but yet the Government has no “authority” to deal with it (see the Paralimni Mafia regarding the very recent kiosk which is turned into a grill bar, who did nothing about it, as well as other shocking reported on our past experience – a disaster).• The reduction of rents which covers just about everybody even those that have not suffered a cent (see civil servants, bank employees etc and other businesses who are closed in any case during this period).• The Natura classification which cost nothing to those suggesting causes a disaster to property owners affected by the classification. Save some exceptions, this is now a national sport covering 29% of the land area of free Cyprus.• The lack of housing for rent and especially those to students. Our ideas on corrective measures was not met by any including no care, including the University of Cyprus who seems to live in its “own world” for its students for their lack of accommodation.• The wrong proposal for affordable housing which we referred to it a year ago and it failed. Who is caring now?• Various business scams ranging from the sale of bottled water and others, but the one which shocked us most, was the replacement of an electric key with the dealer asking for €1.000 and we replaced it with €36 from a kiosk!!• The non-understandable suggestions to the Employers Association on various matters.• Our letter to the Minister of Finance and recently that of the Minister of the Interior which (the latter) messed up due to the wrong information suggested his subordinates. • The mountain resorts help which is nowhere to be found despite the announcements and the replacement of a local businessman with a teacher?• The inexcusable delays by the Planning Authority which has disappointed foreign investors especially (examples given) for the mountain resorts.• The passport issue for which we have suggested penalties of €500.000/case to the wrong doings (God help us with the furious reaction by some developers, but we have had also negative comments from some legal firms).Since our Government over the recent years, does not have the majority in the House of Parliament, any Bill that is proposed at the end, it becomes a compromise, with each political party bidding who will be most likeable to its voters (forget our country we add).For those of us who are at a “mature” age, you may remember the TV series of Kojak (a Greek actor who excelled in the series Kojak), who used the phrase “who loves you baby”?We loan his phrase and ask, “who loves Cyprus”? Surely not the politicians and some of the numerous commissioners with all their hefty salaries and perks (see also the gifts/ watches given by the Arab countries and others and to the never ending visits by our House members to the extent that the Australian Government complaint that it cannot host such a large number of delegates!!).In ending, our favourite slogan is that of W. Churchill who said that “Democracy is not the best system, but it is the best until we find something better”. Presumably, Mr. Churchill did not have in mind the Cyprus Republic!!

July 1st 2020

Labor Unions & Jimmy Hoffa

You may wonder dear readers, who is Jimmy Hoffa. This man was the Chairman of the Truckers Union in the USA, who was accused and jailed for a period for bribery, Mafia links etc. This was the result of an investigation that was carried out by the then Government of J.F. Kennedy with the chief investigator being Bob Kennedy.During the investigation Hoffa called a national strike which almost brought the USA economy to its knees.One of the many problems that the Cyprus Government has, is the behavior of some unions who behave in a rather similar, blackmailing manner, so that at the end the free economy of the country cannot function. With reference to Civil Servants, it is noticeable their inefficiency, indifference and the never-ending demands which cause damage against the Cyprus economy (all of us).We will report certain recent examples that we have experienced, but there are hundreds of others.• Town Planning – We have been asked by a foreign investor who wished to acquire a large building plot in Nicosia to investigate the development parameters of a planning zone that the plot fell in, that of the local commercial center (TEK). We wrote to the Planning Office submitting our own enquiries on the subject and after 2 months of no answer, despite our reminders and having then applied to the Planning Director (he called us promptly) we have arranged an interview with the District Planning Department. We had a meeting, but the local Planning Office reported to us that it needs to refer the matter to H.Q. for advice. After 40 days of waiting and our reminders, we got a call from the District Planning Office, asking us that we should submit a written request (again) for preliminary planning views. So, after waiting 4 months and bearing in mind that preliminary planning views can take anything 2-3 months or so, we came back to square one. We informed our foreign investor accordingly who gave up waiting and abandoned the project.• We now come to the unfortunate foreign investor who proposed to develop in Troodos an Adventure Park. Although his application was approved initially, he waited for 2 years to be informed what the lease rental would have been. No reply, with the Lands Office excuse that It had too much work and could not cope. End result the project was abandoned much at the loss of the mountain resorts.• The long awaited Verengaria Hotel sale at Prodromos village, got stuck again at the Civil Service bureaucracy and the long patience of the foreign (Chinese) investor pulled out from the sale notwithstanding the fact that he had paid a down payment (see the announcement of the local representative of the investor Mr. A. Pieris). So, his offer was withdrawn and cancelled much at the loss, again, of the mountain resorts.These and tens of other cases are examples of results having untouchable unions whose members cannot be fired from their job.We now come back to examine the differences that we have experienced when work usually carried out by the Civil Service, now is undertaken by private practice such as:• Airports – You may remember the almost daily strikes that the airports suffered with the most memorable one being by the luggage porters complaining that the luggage were very heavy for them to unload from the planes. A strike followed which gained them added income and suddenly the weight was not an issue (they became somehow lighter). No strikes since the privatization of the airports.• Ports – A similar situation and since privatization of the ports, be it that there are problems at this initial stage of privatization, these are solved within a short period of time.• Court Bailiffs – Court Bailiffs were taking their time to deliver the documents to the various litigants which had resulted in backhanding. Now that this service has been privatized, the delivery happens within a very short period and no cash under the table.• Land Surveys – An exclusive work by Civil Servants/Lands Office is at the top of our list in corruption and which took months for execution. Now that this survey work is done by private surveyors, the time and cost is much reduced (minimal) and it is all the best.• Building Permits – A never ending problem, be it that the Government although it tried to pass on the work to private architects, the latter are not up to it preferring to play it safe (lack of knowledge being one of the reasons).• A good percentage of local Authorities manage their business as it is their own ownership (a result of the Ottoman Empire). The local Mayors and other “chiefs” have as their priority to find “jobs for the boys” (their own voters) and they show little care about the well-being of the areas administration. So, in one case the local Mayor allowed one of the “local boys” to build a kiosk for selling newspapers and juices, within the protection zone (strictly prohibited) which became a grill bar. The District Officer protested and despite his warnings to the local Municipality, he received no reply. Now the C.T.O.- Ministry is taking some sort of action, but we are also told that it doubts its effectiveness.• The previous Minister of Education “dared” to correct the operation of our education system and the unions called a strike and demonstrated with approximately 10.000 educationalists. The Government pulled back and the Minister was “demoted”!!Etc. etc.So here we are, we are not so much governed by the elected Government, but by the unions and the other “mob” that we have become accustomed. We remember during such happenings in the U.K., Mrs M. Thatcher demolished the coal miners’ unions and since then everything is peaceful. Lovely, but then do we have the guts such as Mrs Thatcher to do it in Cyprus?Another “mob” style behaviour is that if one union strikes, then other unions who have nothing to do with the strike, call their members to strike in “support”. So, we have a problem with the Civil Service and others (see recent announcement by the Chairman of the Civil Servants that “if the Government dares to reduce their salaries/benefits, they will shut down the economy).Although we do not suggest that the local unions are anything like Mr Hoffa’s wrong doings, it brings up another important matter that of the shutdown of public services, such as electricity, telecommunication, hospitals etc. There was a proposal for these essential services to be provided a certain procedure prior to a strike, but this was not followed.In ending (although we have many other examples) is it not odd dear readers that the country which is the most affluent and most capitalist state in the world (the U.S.A.), is the one which has introduced 8 working hours per day and other measures and no other so called socialist states dare to adopt?

June 19th 2020

A Paradise in Trouble?

We were nearing full recovery in the real estate market with positive trends, only to face now the virus situation. This, in addition to human losses, is causing now side effects on business, especially to the tourist industry and by projection to real estate.As if this was not enough, we have added problems in the near horizon such as:• Passports – A recipe which done well for a few years, is now in trouble with the E.U., placing pressure to abolishing this Cyprus Investment Scheme. If this happens the repercussions will be considerable, especially with regard to the high rise blocks, which are directed towards this market source, with a consequential effect on some of them not been completed with a clear effect on the bank’s finance (NPLs), unemployment and the lucrative income that this has produced for accountants/advocates/agents and others.• Income Tax – A joint effort by France and Germany and in general the E.U. to adopt a uniform taxation system is another cause for concern for Cyprus, especially now that the two protagonists are connecting any financial assistance to countries that have an attractive tax system (such as Cyprus) to increase their tax. The Cyprus taxation system is one of the many reasons of Cyprus economy revival and whereas the Government of Cyprus is trying to introduce more and more incentives, it seems that this will not only be halted, but to turn around (you might remember how France and Germany changed the E.U. economy indicators in the past, to cover themselves for their indicators which were not in accord to the E.U. indicators).• Russian Pressure – As if these are not enough, we have now pressure coming from the Russian Government regarding our double taxation treaty, starting from Cyprus, but leaving out (at this point of time at least) countries such as Denmark, Luxemburg etc.• Small Politics – This is another inherent problem with the various political parties opposing the Government’s measures to assist business by differing these handouts, but not reducing them with as a result the delay in the economy restart.• M. Thatcher – We wish we had a strong politician such as Mrs. Thatcher, who managed to place under control the never-ending demands of unions in the U.K. We see the various Cyprus unions causing trouble in our economy asking for more and more (and less and less working hours). The recent High Court decisions on the Civil Servants demand for €800 mil. refund got us (all the rest of us) off the hook, but so much is their greed that they have applied to the European Court of Justice. You do remember a few years ago when the then Minister of Education “dared” to introduce some alterations to our system of education, with the unions promptly demonstrated with 10.000 people in the streets – at the end of the Government pulled back and we came back to secure one. During the writing of this article, we just happened to see the story of Jimmy Hoffa, the Chairman of the Truckers Association U.S.A. A beautiful example from the USA where the Government almost came to its knees by a union• Financiers/Banks – Despite their effects and although improving, they still face problems and with the recent Bail In of the year 2013 and the near one of the Co-Op not only the financiers are not earning anything, but in addition the shareholders are called from time to time to contribute more from their initial investment. As such a loan application is now being a calvary with time required for a loan issue (from the date of application) surpassing 2-3 months.So, justifiably, dear readers, we are worried about the whole situation, especially coming to know by examples, that small countries, such as Cyprus, is the prey of the larger countries (in the E.U.), especially at times of financial strife.All these (and other) matters have their repercussions on the real estate market. It is early days to specify what the effect is in terms of reduction in demand/property values, but as an indicative estimate and as present circumstances stand, a reduction of ±10% is reasonable. Depending on the duration of the virus and the other factors mentioned above, it will get worse. The recent reports (by the Lands Office) record that sales have dropped by 70%, so you do appreciate what the results will be during the year 2021 (expected commencement of recovery not earlier than 2022). The part of the market that is expected to be least affected is the residential market directed for locals and for the average prices, within towns/periphery. Housing is a social need, either for ownership or for rental, whereas the archaic dowry system is an assistance to young couples. So, we expect that this sector of the market will be the least affected, whereas if this situation continues, there will be an increasing sale of hotels and other tourist related properties, followed by shops/commercial uses (see also side effects by the Malls competition) and to industrial units (save the small ones for use as storage). Agricultural land will remain at the rock bottom still struggling not so much to sustain their value levels, but to create some sort of demand/realization of sale. Properties which are rented for income are expected to retain their present level, since with the low deposit rates on the savings and with the retirement/pensions that are collected by mainly the Civil Servants, money will be around, be it to a smaller extent, whereas the increasing unemployment will create a difficulty as a result of which will increase demand for rental accommodation. Rental (gross) returns are on average 3%-4% for residential units and 5% for commercial, whereas industrial returns do not show a steady/average return – but on average 5% (if a suitable tenant is found).Regarding rentals, what is important to note is not the level of rental income that a tenant pays, but the ability to abide in addition to the rent his other obligations, such as common expenses/repairs etc.So, now is the time/even better during next year, for those daring and adventurers and with money available to start searching for “opportunities” which appear on the various banks’ websites, administrators, investment funds etc., who have now more difficulty to dispose their assets than before and now, we expect, to be more inclined to accept offers than before.We must point out that the Government of Cyprus, is introducing all sorts of investment incentives regarding the real estate market, such as the abolition of the property tax, the reduction of transfer fees and now added tax deductions in the event of landlords concluding a deal on the passing rent reduction for a couple of months of at least 30%.Everyone loves his own country and it is not an exaggeration that we report that Cyprus is a Paradise despite its problems. The weather, widely spoken English, short distances, low crime rate, reasonable cost of living, education opportunities at all levels and the variety of the countryside are just a few of its attraction. On a recent visit to London, we took a taxi for our appointment. After 45’ minutes we stuck in a traffic jam, so we got out and we walked for ½ hour during the rain to reach our appointment on time. If in Paris you should not walk on your own, especially after hours since the crime is evident, whereas in Milan, our experience on pickpockets was shocking.In ending and during a visit of ours in a Bedouin camp in Jordan a few years ago, literally in the middle of nowhere, our host asked us “my friends is this not a paradise”?Yes, Cyprus is a paradise, but troubles are ahead.

June 18th 2020

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