Mushrooming Limassol towers ‘unsustainable’

LIMASSOL Municipality’s plans to develop public land in the heart of the town has reignited criticism of the authorities over the number of high-rises being built along the coast.

Critics argue that plans to build another tall building in an area which has seen its fair share of ‘towers’, will only add to the many unsustainable urban constructions blighting the town.

The municipality plans to have a hotel built on the plot worth €75 million, currently used as a parking lot. The hotel is to be built by a private investor through a Build–operate–transfer (BOT) agreement which will see the property being handed back to the municipality in 2038.

Deloitte was assigned to prepare a financial feasibility study on which the terms of the procurement will be decided.

The property is located in one of Limassol’s most expensive areas, the Enaerios area attracts locals as it has dozens of restaurants, shops and cafes. It is located opposite one of the town’s landmarks, the popular Limassol pier.

The Municipality’s proposal includes the creation of a luxury hotel, a conference centre, parking, offices, apartments and the creation of a square with a park.

According to the study prepared, developers will be able to build on an area covering 39,400 sq.m.

Limassol Mayor Nicos Nicolaides, in comments made to journalists, said residents of Limassol will have the last word as the final decisions will be taken during public consultations to be held once the strategic investor is identified.

“Our goal is to properly develop this very important landmark so that the municipality can upgrade the infrastructure for its citizens and also use it commercially so that it can strengthen its economic potential to offer more to its citizens,” said Nicolaides.

However, locals and experts consider that the municipal development will only add unnecessary strain on the area and its infrastructure, inflating the threat to sustainability.

Experts are concerned over the sustainability of the current development, taking into account that more such projects are in the pipeline. The total number of applications to build tall buildings, pending approval from the Urban Planning Department amount to 30, while the current number of high-rises in Limassol is 40.

Cities and their skylines evolve and change through time with tall buildings making their mark on urban life. While they may serve as catalysts for regeneration and stimulate further investment, due to their size and prominence, such buildings may also harm the qualities that people value about a place, especially when they are designed with a lack of appreciation or understanding of their environment.

President of the Cyprus Technical Chamber, Stelios Achniotis, said the decisive element for which of the scenarios is to prevail is the existence, or absence, of a coherent and considered strategy for building tall.

Unfortunately, he said this is not the case for Limassol.

“In Cyprus we build first and then we design the strategy, trying, in reality, to control – if possible – the consequences and assess the damages caused by the lack of planning in the first place!”

Acknowledging that to some extent the market is to decide what kind of developments will be realised, he stressed that the state’s responsibility should be to provide the strategic directions and principles in order to strengthen economic development in a sustainable, responsible way.

“We have to be clear on something: the presidential incentives for economic development or any other similar initiatives, without a simultaneous specific development strategy, equals no guidelines at all,” he said.

Achniotis said that the absence of such a plan will eventually lead to allowing “the private interests-driven market to decide for us, those characteristics – even on public land – without consideration of their impact on sustainable growth, urban fabric or everyday life of citizens in Cyprus”.

Achniotis commenting on the Enaerios development, he stressed that public land is a valuable resource and asset for all citizens. “The development of public land should also be based on an urban planning strategy and driven by a common vision for the city of Limassol.”

Achniotis questioned whether the town’s current infrastructure can withstand and support all the towers rising in the sky.

“We can’t possibly know without an assessment of impact, including cumulative impact with other proposed projects. Specific considerations would also include impact on the historic environment, visual impact including a cumulative impact on the skyline, integration into surrounding development and climatic effects such as overshadowing and wind effects.”

He added that issues concerning health and safety and fire hazards, construction sites and their impact on the neighbouring properties, future management and conservation of tall building, have yet to be tabled.

Assistant Professor in the Urban Planning Department of the Architecture Faculty at Frederick University, Vyronas Ioannou, echoed the same fears about developing an area without a guide-map.

“If the coastal line of the city, which is currently the most expensive area, is overloaded with tall buildings, then it is very possible that the area will lose its value,” he said.

Ioannou added that, as the high-rise apartments are being sold to investors, seeking to obtain a Cyprus passport, there is always the risk that these residencies maybe abandoned.

“This is what happened in cities like London and Vancouver, where impermanent demand led to rapid development with skyscrapers occupying the skies. At the end of the day, these towers were abandoned, and the area devalued.”

Lack of vision

He also finds that the development in the coastal area of the city is opportunistic and without any regulation.

“There is no vision, the proper infrastructure is not being laid down and these buildings join the current infrastructure networks which are very doubtful if they can withstand such development,” explained Ioannou.

Ioannou said the lack of vision is made clear when one takes a look at the city’s infrastructure, such as the sewage system.

“We are currently in the dark over whether the sewage system will be able to handle sewage from these towers”.

He added that if it is proven in the future that the system cannot handle the waste from these towers, then serious investment, which will burden taxpayers, will have to be made to correct matters.

Ioannou said that the Limassol bay environment is taking a beating from underground seawater being pumped from the foundations of the towers.

“As there is no plan as to what will happen with this water, it being led back to the sea.”

The town planning expert said that as a holistic environmental study has not been carried out, we have no idea to what extent the Limassol Bay is to be affected. He added that if authorities had a vision, this water could have been treated and used to water plants and trees on municipal land.

Environmentalists and local action groups are angry at the lack of a common vision for the development of the town that could see the Limassol Bay turn into a swamp over the next decade.

According to figures submitted to the House by the Minister of Agriculture, Costas Kadis, two of the developments currently underway have secured permission to unload 5,000 cubic meters of water daily in the sea.

Kadis was answering a question posed by Cyprus Greens MP Charalambos Theopemptou regarding possible pollution caused by the Limassol towers.

A group of winter swimmers have had the waters tested by professionals who have found that there is an unusual rise in algae.

Erma Stylianides, representative of the organised Winter Swimmers of Limassol, said: “We are currently on autopilot, with no plan whatsoever. We just care for the easy money and do not think of the collective impact these buildings will have on the environment.

“We are not against development, far from it. But we would like to see the city being developed with a plan drawn after an overall environmental study is carried out,” added Stylianides.

Despite efforts made by the Financial Mirror, the Limassol Municipality, and the Mayor Nicos Nicolaides did not make themselves available for comment.

Paralimni marina construction underway

THE PROJECT for the construction of the Paralimni marina has commenced according to an announcement by the Department of Fisheries and Marine Research.

The department wishes to inform the public that there will be some disruption for vessels at the Paralimni fishing shelter as works begin. Specifically, from Friday October 19, 2018 until Saturday afternoon, October 20, 2018, access for vessels will be forbidden as drilling works are undertaken at the entrance of the fishing shelter. The drilling will take place in the framework of the construction of the Paralimni marina.

The Department of Fisheries and Marine Research regrets any inconvenience caused by the restriction which will be in place for safety reasons.

Contracts for the much delayed Paralimni Marina were signed in January 2018 by the Energy Minister Giorgos Lakkotrypis, investor PMV Maritime Holdings and the Paralimni Municipality.

The project, estimated to cost around €110 million, is anticipated to contribute to the upgrading of the tourism infrastructure of the Famagusta district and to the promotion of nautical tourism in Cyprus in general.

The Paralimni marina will be constructed in the area of ??the Agios Nikolaos fishing shelter in Paralimni, on state land and marine area and will have a capacity of approximately 300 boats. Under the agreement, PMV Maritime Holdings Ltd will manage the marina for 125 years.

The project will include administration buildings, residential and commercial developments. Based on the design, there will be 195 residential units – mostly luxury apartments – and 27 commercial spaces (restaurants, cafes, bars).

The plans detail construction of 14,250 metres for residential buildings and 2500 metres will be for commercial buildings.

The Paralimni Marina is a partnership between PMV Maritime Holdings Ltd and J & P (Joannou & Paraskevaides) Marina Projects Ltd, who manage marinas in Britain as well as Nicolaides & Kountouris Metal Company Ltd. Architect of the project is the British company Harper Downie.

The Paralimni Marina will be considered as an official point of entry into the Republic, therefore it will have facilities for port police, customs and medical services.

The marina is expected to be fully operational by mid-2021.

© Copyright – Cyprus Tourism News

Moderate property price rises continue

Moderate Cyprus property price rises continueDURING the second quarter of 2018 the Central Bank of Cyprus (CBC) reports that the residential property price index rose by 0.3% over the second quarter of 2018, with the price index for houses and apartments rising by 0.2% and 0.7% respectively.

Referring to the price increases as ‘moderate’ except in certain areas, the CBC notes that the index has now recorded increases for eight consecutive quarters.

Changes in the residential price index

The Residential Price Index (homes and apartments) has been rising since the third quarter of 2016, recording a quarterly increase of 0.3% in the second quarter of 2018, with houses recording a quarterly increase of 0.2% and apartments 0.7%.

Increases were recorded in all districts, with the exception of Paphos, where there was a marginal decrease of 0.2%.

On an annual basis the Residential Property Index rose 1.7% in the second quarter of 2018. With the exception of Paphos, where the index remained stable, all districts reported rises. Famagusta recorded the highest rise in house prices (4.6%) with Limassol recording the highest rise in apartment prices (6.1%).

Commenting on the significant increase in Limassol apartment prices, the CBC said that it seems to be due to the increased demand in the mainly coastal areas, where prices are growing fast but have not, for the time being, affected other parts of the district. Limassol is also the most populated district.

With the Cyprus University of Technology in Limassol city centre, the demand for accommodation through Airbnb, the construction of the marina and the casino at Zakaki, the demand for property is high and pushes up prices compared to the rest of the district – and the rest of Cyprus.

Furthermore, the increase in Limassol is also reflected in the demand for homes by non-EU citizens wishing to take advantage of the Government’s ‘Citizenship by Investment’ scheme.

Concluding statement

The CBC concludes that property prices in Cyprus are increasing. However, non-performing loans (NPLs) remain a challenge to the real estate sector and it urges the credit institutions to make the most of the tools at their disposal to resolve the biggest problem plaguing the Cypriot economy.

Further reading

CBC Residential Property Price Index Q2 2018 (Greek)

Cyprus property prices rising

Cyprus property prices rising says RICSTHE THIRTY-FOURTH publication of the RICS Cyprus Property Price Index reports that the average price of residential apartments and houses across the island rose over the first quarter of 2018.

Price increases have been assisted by improvements in the Cyprus economy and confidence in the banking system which, despite the high levels of non-performing loans (NPLs), has improved the availability of finance contributing to increased sales.

Quarterly property price changes

Compared with the fourth quarter of 2017, prices of residential houses and apartments rose by 1.3% and 2.9% respectively. Nicosia recorded the largest quarterly increase in apartment prices (up 4.7%), while Famagusta reported the largest rise in house prices (up 3.6%).

Residential property prices in Paphos remained stable, while Limassol recorded a slight decline of 0.8% in the price of houses.

Prices of holiday homes also rose over the quarter by 3.4% for apartments and 1.1% for houses. The highest increase for both holiday houses and apartments was recorded in Famagusta where they rose by 1.8% and 3.2% respectively.

Annual price changes

Compared to the first quarter of 2017, prices of houses and apartments rose by 4.2% and 7.8% respectively.

Meanwhile prices for offices, retail and warehouses over the year rose by 10.7%, 3.7% and 3.5% respectively.

Rental values

On a quarterly basis rents increased by 6.5% for apartments, 5.1% for houses, 0.6% for retail, 4.4% for offices and 0.4% for warehouses.

On an annual basis, rents increased by 18.1% for apartments, 10.9% for houses, 4.8% for retail, 18.1% for offices and for warehouses 2.2%.

Gross rental yields

At the end of the first quarter of 2018, average gross rental yields stood at 4.4% for apartments, 2.2% for houses, 5.5% for retail, 4.3% for warehouses, and 5.2% for offices.

The proportionately higher quarterly rental increases compared to quarterly price increases have marginally improved yields for apartments and offices.

The gross rental yield is a useful yardstick as to whether property is over-valued, under-valued or priced correctly. Here is a set of rules of thumb for the housing market from the Global Property Guide:

15% – 20% Very undervalued

10% – 12% Undervalued

8% – Borderline undervalued

6% – 7% Fairly priced

5% – Borderline overvalued

3% – 4% Overvalued

2% – 2.5% Very overvalued

Further reading

RICS Cyprus Property Price Index Q1 2018.

632 new homes in July

632 new homes in Cyprus during JulyTHE TOTAL number of building permits authorised in Cyprus during July 2018 stood at 589 compared with the 492 authorised during July 2017; a rise of 19.7% and provided for the construction of 632 new homes according to official figures released by the Cyprus Statistical Service.

Compared to July 2017, the total value of all building permits rose by 25.3% to reach €243.4 million and their total area rose by 23.2% to reach 217.0 thousand square metres.

During July 2018, building permits were issued for:

  • Residential buildings – 396 permits
  • Community buildings – 1 permit
  • Non-residential buildings – 97 permits
  • Civil engineering projects – 29 permits
  • Division of plots of land – 56 permits
  • Road construction – 10 permits

Building permits for new homes

The 396 residential building permits approved in July provided for the construction of 632 new homes (dwellings). These comprised 365 single houses (compared with 259 in July 2017) and 267 multiple housing units such as apartments, semis, townhouses and other residential complexes (compared with 278 in July 2017); an overall rise of 17.7%.

Of those 632 new residential homes, 202 are scheduled for Limassol 173 for Nicosia, 100 for Famagusta, 85 for Paphos and 72 for Larnaca.

Building Permits Issued for the Construction of New Homes
(Number of Dwellings)

Month 2017
(Dwellings)
2018
(Dwellings)
Increase/
Decrease
%age
Change
January 381 476 95 24.9%
February 383 431 48 12.5%
March 412 467 55 13.3%
April 289 418 129 49.6%
May
424 541 117 26.6%
June
381 506 125 32.8%
July
537
632
95
17.7%
Totals 2,807 3,471 664 23.7%

During the first seven months of 2018, 3,699 building permits were issued compared to the 3,362 issued in the same period last year; an increase of 10.0%. The total value of these permits rose by 21.5% and the total area by 25.5%.

According to the Cyprus Statistical Service, building permits constitute a leading indicator of future activity in the construction sector.

Cyprus ‘Golden Visa’ scheme poses high risk

Cyprus 'Golden Visa' scheme poses high riskTHE OECD (Organisation for Economic Co-operation and Development) has published a ‘black list’ of 21 countries, which includes Cyprus, whose residency and/or citizenship by investment schemes potentially pose a high-risk to international efforts to combat tax evasion.

The OECD analysed over 100 Residence/Citizenship by investment schemes and identified a number of them that potentially pose a high-risk; i.e. those that give access to a low personal tax rate on income from foreign financial assets and do not require an individual to spend a significant amount of time in the jurisdiction offering the scheme.

Their analysis identified a number of schemes that potentially pose a high-risk. These are currently operated by Antigua and Barbuda, The Bahamas, Bahrain, Barbados, Colombia, Cyprus, Dominica, Grenada, Malaysia, Malta, Mauritius, Monaco, Montserrat, Panama, Qatar, Saint Kitts and Nevis, Saint Lucia, Seychelles, Turks and Caicos Islands, United Arab Emirates and Vanuatu.

Transparency International & Global Witness

Just last week Transparency International and Global Witness published an article Risky business: Europe’s golden visa programmes explaining how the EU had welcomed over 6,000 new citizens and nearly 100,000 new residents over the past decade and that Spain, Hungary, Latvia, Portugal and the UK have granted the highest number of golden visas to investors and their families, ahead of Greece, Cyprus and Malta.

In its accompanying report ‘European Gateway – Inside the Murky World of Golden Visas‘, Transparency International and Global Witness said it was “critical to harmonise the sale of residency and citizenship across the EU, and that high standards of transparency and due diligence are implemented across the board. Only a unified and coordinated approach will prevent risky individuals from ‘passport-shopping’ between jurisdictions and avert a race to the bottom in terms of standards.”

The report also called on the European Union to “Undertake infringement procedures against Member States offering golden visa schemes if they are deemed to undermine the principle of sincere cooperation and jeopardise EU values and objectives.”