By Sara Mohamed and Farah Montasser
The Cypriot real estate market is currently one of the hottest markets for investors in Europe and around the world, also garnering attention from Egyptians and citizens of the MENA region. Invest-Gate speaks with Cyprus-based real estate developers to explore the Cypriot real estate market with its current status and trends.
Aristo Developers’ Representative for the Middle East and Arab Countries Issam Nasser describes investing in the Cypriot real estate market as a “booming trend” among Middle Eastern and Arab citizens.
According to Nasser, Aristo Developers, a leading Cypriot property developer, has witnessed approximately 30% of its sales embraced by Middle Eastern investors, throughout 2016-2017, for a number of reasons that surpass the conventional reasons.
By virtue of the proximity of the island to the MENA borders, it takes an average flying time of two hours from any of the Middle Eastern and Arab countries – and nearly one hour from Egypt – to Cyprus, deeming the location as a convenient option for investment, Nasser elaborates.
On the other hand, Elena Kais, regional sales manager at Cyprus-based Giovani Group, tells Invest-Gate that those who do invest in the Cypriot real estate market mainly have two targets; either acquiring a citizenship or a permanent residency that paves the road for an easy access to Europe.
Launched in 2016 by the Cypriot government to rebuild its economy in the wake of the 2012–2013 financial crisis, the Cypriot Citizenship by Investment Program has seen some 3,300 passports issued to foreign investors and their family members, Cyprus News Agency revealed in February 2018.
This implies that foreign real estate investments reached over EUR 6 bn since the program’s inauguration, the agency adds.
Giovani Group highlights several qualities that are increasingly enticing investors like the fact that the island has one of the most attractive tax systems in the world, with a corporate tax rate of 12.5%. Additionally, Cyprus also offers foreign investors low start-up and operational costs.
Moreover, Cyprus’ location has been pivotal for global trade, being a junction to Europe, Asia, and Africa. It is also deemed as the safest country in Europe with the lowest crime rate in the region.
Meanwhile, it is currently the only European country which by law offers a pure citizenship and a second passport within a few months.
Apart from granting citizenship to investors in Cyprus, according to Kais, “the returns of investment depends on the conditions of the property. For instance, one can rent his/her property and gain an income out of it. Another aspect that is considered very important is the location of the property; triggering a yield of 3.5 to 6%.”
Investors can also benefit from capital return, which means that after three to four years of the property’s completion, one can gain an evaluation of the property’s value and benefit from any appreciation in its value, she adds.
However, this does not mean that all Egyptians want to get on board with such an investment trend. According to Kais, Egyptians usually prefer to invest their money in their homeland.
But Nasser confirms that Egyptians take up almost half of the total sales of Aristo Developers’ Middle East division, underlining that Egypt’s sales did not get affected by the pound’s floatation and that it rather remained stationary since investors still eye the same investment targets.
In the same vein, Aristo Developers has held an event with RE/MAX Property Group in Cairo on 21 February 2018, aiming to establish an exemplary business cooperation with Cyprus and the Egyptian real estate market.
“Cyprus has become increasingly popular for Egyptian investors seeking to establish ties within the European Union through its attractive immigration schemes,” according to a Facebook post by Aristo Developers commenting on the event.
Besides, Nasser reveals to Invest-Gate that Aristo Developers will be holding another event in Cairo from June 7 till June 13 where they will showcase their vast property selection to potential investors from foreign countries.
As part of the event, the developer will be able to promote Cyprus as an attractive destination for foreign investment, emphasizing the island’s economic potential and the attractive incentives offered by the government of Cyprus to Egyptian and foreign investors, he adds.
As to conditions for permanent residency in Cyprus, Kais tells Invest-Gate that one can acquire permanent residency in Cyprus through two ways, the fast track and the slow track.
“The fast track grants an individual the permanent residency within two months, but it is worth investing in any property in Cyprus costing around EUR 300,000. In this case, the individual plus his family – including the spouses, children who are 25 years old or under, parents, and parents-in-law – are granted the permanent residency in Cyprus,” Kais elaborates.
“On the other hand, the slow track involves investing in any property in Cyprus that ranges from EUR 70,000 to EUR 90,000 and it takes up to one year to officially become a permanent resident of the country. However, this scheme grants permanent residency to an individual’s children only 18 years old or under,” she adds.
On the bright side, both types of investors do not need to know the language, reside in Cyprus, or even visit the country except once every two years.
“I personally believe that Cyprus, a few years ahead, will reach further superior levels, particularly because it is considered the safest country in Europe. Cyprus also recorded the largest annual decrease in unemployment with 8.5% drop for the current year,” Kais underlines.
The regional manager reveals that Giovani Group has offered 13 different projects for foreign investors in the 2018 Cityscape Exhibition, along with special offers to fully furnish any of the properties purchased or reserved, but only to participants who were seriously keen to travel and invest in a property in Cyprus.
Giovani Group has residential units with prices ranging from a single unit for EUR 90,000 to a first-line villa on the beach for EUR 1 mn, Kais states.
“Just a few months into 2018, we had already successfully delivered high-end developments in Protaras and Ayia Napa. Within these areas we have also forged new partnerships and attracted prestigious investors to secure new developments planned for these districts,” Giovani Group’s website reads.
Furthermore, Aristo Developers has also participated in the 2018 Cityscape Exhibition, and offered various residential projects to foreign investors with prices ranging from EUR 100,000 to EUR 3 mn, depending on the property’s type.