How does 2020 end for real estate and what are the market prospects for 2021?
Undoubtedly, 2020 was a difficult year for the entire planet. We experienced unprecedented situations. Our daily life was turned upside down as social distancing suddenly entered our lives. At the same time, 2020 has shown us how strong and resilient we are as humans. Despite the difficulties, we found the strength, with solidarity, empathy and creativity, to respond to the challenges. We’ve lost individual freedoms in order to keep others safe. We’ve cared about each other. Yet, the footprint of the pandemic in the global economy continues to be catalytic. And, of course, real estate could not be an exception. In 2020, there was a decline in real estate transactions which, however, is considered completely normal due to unprecedented situations, as those who are willing to invest in real estate are adopting a wait-and-see approach until everyday life goes back to normal. The mood for investments was evident during the period when, albeit temporarily, normalcy returned with only a few cases per day. I am referring to the summer months, during which the domestic demand for real estate increased, as a result of the measures provided by the government within the current year for the first-time home buyers. As things turned out, it is expected that 2020 will end with a negative sign compared to previous years. However, it is worth noting that even amid the current adverse conditions, the real estate market in Cyprus has proven its resilience when the situation in the world’s largest real estate markets, such as London and New York, is particularly unfavourable. The construction and real estate industry will continue to be a stable pillar of the Cypriot economic growth, with a substantial contribution to GDP and job creation.
How has the abolition of the Cyprus Investment Programme affected the real estate market, especially the luxury property market?
The termination or suspension of any investment programme certainly affects the market, but I do not think that the luxury property market will be particularly affected. It is true that whenever there is a change in the market, the phenomenon of drawing hasty conclusions, levelling and doom-mongering prevails. However, the real estate market existed long before the Cyprus Investment Programme and will continue to exist thereafter. At the moment, there may be 5-6 large projects under construction (in Limassol), but the number of apartments available is not very large due to pre-sales. Perhaps those left available might need more time to be sold than originally thought by fellow industry professionals. The market segment for which there are most concerns worldwide at the moment is the office market. As people’s habits change due to Covid, and as the global recession deepens, every company is reviewing its needs, as they may now need less space than in the pre-Covid-19 era. This means that they are either thinking of reducing their office spaces, because part of the employees will continue to work from home, or wish to renegotiate the rental amount of the existing space. In any case, the side effects of Covid-19 seem to affect the returns on the office market. This may have a negative impact on investors (that are mainly institutional or pension funds). The biggest fear is that a number of investors, who traditionally invest in the office market, may move away from this specific market due to low returns and the continuous uncertainty. In addition, the cost-cutting plans of many companies are still in the early stages and will take some time to finalize, until the effects reach the final investors. As employees are preparing to return to their workplaces next year, long-term issues may need to be addressed more urgently as health, safety and human interaction concerns become more prevalent. We are most likely moving towards a new world where people will have the right balance between working from home and working from the office. This could mean that we need less office space or some other form of workspace.
What are Imperio’s goals for the new year and what projects are expected to be implemented and launched? How is the completion of the multi-storey Icon moving?
At Imperio, we have scheduled the completion of Icon, which will adorn Limassol for the next decades, with a delivery date to its owners in July 2021. At the same period, the Icon restaurant, which is located on the 10th floor with unobstructed views of Limassol and the sea, will open to the public. The Icon is currently in the final stages of construction, while the 21st and last floor have recently been completed. Giving priority to public health and implementing the safety measures and instructions of the Ministry of Health, work is progressing rapidly. Although the pandemic has posed several obstacles in the project’s schedule, with the intensive and methodical work undertaken lately and the faithful implementation of the health protocols, we have managed to return the completion of the construction to the original schedule. In addition, two other impressive projects – the Barbican Heights on the hills of Panthea and the Imperio House which will house the new offices of our Group – are expected to be delivered in the summer of 2021. Imperio House will be the most energy efficient building in Cyprus, using modern photovoltaic technologies and other environmentally friendly systems, producing more energy than it consumes. Construction work has already begun in the innovative Sunset Gardens project, most part of which will be completed by 2021.
Interest in the new project Sunset Gardens, near the City of Dreams Mediterranean, has been intense since day one. What percentage of apartments has been sold so far and how will the implementation of the project proceed?
Interest in the Sunset Gardens remains lively and intense, with 60 residences having already been sold since the start of the project sales on September 23, 2020. What is worth mentioning regarding Sunset Gardens is that it mainly attracts the interest of local buyers and investors. The very low prices of the apartments (starting from €185,000+VAT), in combination with the numerous amenities offered by the project – restaurant, supermarket, business centre, swimming pools, gym, tennis and basketball courts, etc. – offer a complete way of living in a residential development that was missing from Limassol. Sunset Gardens is close to the largest casino in Europe, the City of Dreams Mediterranean, and the area in general is the most upcoming area in the city. The implementation of Sunset Gardens began at the end of October and the construction of the project is proceeding at a fast and steady pace, always having public health as a priority and faithfully following the health protocols.
To sum up, success in the world of real estate requires patience, insight and the ability to understand where the market is going, but also to understand its cycles. You need to have a strong stomach and thirst to overcome difficult situations, because there will always be ones. This industry requires hard work, and its results are visible in the long run.