Over the last 5 years, Cyprus has displayed tremendous growth in terms of attracting international investments. Despite the adverse circumstance surrounding the global pandemic in 2020, the island still emerged with new and attractive investment incentives and reforms that welcome the new year of 2021 with full confidence and a positive outlook for the Cyprus property market.
In 2018, Cyprus successfully regained an investment-grade credit rating, which acted as a major boost for foreign investments from Russia, Asia, the US, and the Middle East. During the last two years, many large-scale real estate projects emerged on the island, attracting billions in foreign investment. Further supported by the favorable tax system, the island has successfully attracted various international companies to set up headquarters and enrich its ability to act as an international business hub. Combined with other attractive investment opportunities in banking, shipping, tourism, and energy Cyprus is set to enter 2021 with great ambition and prospective plans to continue expanding its infrastructure.
The Cyprus Energy Sector Growth
In 2011, a promising discovery of an estimated 4.5 trillion cubic feet of natural gas in the Cyprus exclusive economic zone, acting as the catalyst in the emergence of the new Cyprus energy sector. Since the discovery, various Oil & Gas majors, including Noble Energy, ENI, Kogas, ExxonMobil, Royal Dutch Shell, and Total, have secured their official exploration licenses. Further discoveries in other Blocks, such as ExxonMobil’s announcement of an additional estimated 5 to 8 tcf of natural gas in Block 10 in 2019, have substantiated Cyprus’s potential to become a solid player in the Energy industry.
In this context, gas exploration and production potentials present a vast range of investment opportunities for foreign investors and a promising growth outlook for the Cyprus economy. The key potential lies in the projected development of the island’s infrastructure, supporting gas exploration and production. In turn, this growth will further boost other sectors of the island’s economy, such as real estate.
The Cyprus Property Market
Cyprus has always been at the top of the list for foreign investors when it comes to real estate. During the last two years, the property market has grown so much that it has literally changed the island’s landscape, with numerous lucrative projects appearing across the islands’ key cities.
The new projects, completed and still in progress, cover luxury residential residences, wellness spas, retirement villages, hotels, luxury marinas, and many more. The high-end residential property segment in Cyprus has accounted for 20% of the total transacted amount in real estate in 2019, and a total of 66% of investments came from non-EU buyers.
Further supported by the increasing demand for housing in Cyprus’ key business hubs such as Limassol due to the increasing establishment of international companies and their employees on the island gave property developers another unparalleled growth incentive.
The Cyprus Tourism Sector
Tourism has always been one of the underlying sectors supporting the Cyrpus economy. During recent years a large amount of effort has been given to improve further and grow its potential to new heights. Various strategies have been implemented to alter and extend the island’s tourism season by offering new mixed-use developments such as luxury marinas, casinos, golf courses, and more.
The prime examples of such developments would be Melco’s Luxury Casino resort, which saw a staggering EUR 600 million investment and is set to be the biggest casino of its kind in the whole of Europe.
Another example following the Limassol Marina’s success is the EUR 300 million Ayia Napa Marina and the EUR 110 million Marina of Paralimni. It does not stop there as in August 2020; formal approval has been granted to construct a Marina in Larnaca, set to attract construction and real estate development with a total value of 1.2 billion euros.
The hospitality industry was also not left behind, with Marriot setting foot into the island hotel business by opening the Ultra Luxury Parklane Resort in Limassol in 2019. The likes of Hyatt, Radisson, and Jim Chang Global set to follow traits with equally promising projects in the years to come.
The tremendous growth in terms of investments into the tourism sector acts as direct proof of interest and future growth of tourism-related real estate, yet another contributing factor to Cyprus’s promising outlook in the years to come.
The Cyprus Shipping Hub
For decades Cyprus has proven to be one of the most preferred locations for shipping companies to base their operations. The modern Limassol port and the favorable tax rates and terms of the Cyprus Flag, and the islands’ low corporate tax rate have attracted some of the most prominent shipping industry players such as V.Ships, Marlow Navigation, Columbia Shipping, and MSC, to name a few.
Over the last decade, there has been an increase of more than 60% in shipping companies registered in Cyprus. This has significantly increased the sector’s overall revenue by over 20%.
Combined with the gas exploration and production plans, the Cyprus shipping sector is only set to grow further and continue being a critical contributor to the island’s economy.
While 2020 has been a challenging year for all of us, and Cyprus has been truly tested, it has proven to be resilient to these challenges. We enter 2021 with a promising outlook for continued growth and prosperity of the island, and the above-stated examples are mere proof of this. Cyprus has always been, and for the foreseeable future, will remain a highly desirable location for foreign investment and property development.