Qatar to pour millions in Cyprus property
April 26, 2010 - Cyprus
Hope has emerged for the beleaguered property market in Cyprus with a huge injection of cash from the Middle East for a multi million dollar luxury development.
Qatar and Cyprus have signed an agreement to build a $150 million luxury hotel, office and residential complex in the commercial center of Nicosia, the island's capital.
Qatar's Emir Sheik Hamad bin Khalifa Al-Thani and Cyprus President Dimitris Christofias said the deal will create a joint venture in which the two countries will hold an equal stake in the 55,000 square meter complex that will also include retail shopping and residential quarters.
Construction crews are expected to break ground for the first phase of the complex, a five star hotel, by the end of the year, said Mohmmed Bin Ali Al Hedfa, Chief Executive Officer of Qatari Diar, Qatar's real estate investment company.
He said it will be completed within 30 months once construction begins but did not disclose the overall cost of the complex. He added that oil-rich Qatar decided to invest in Cyprus because the island was left relatively unscathed from the global economic crisis.
Cyprus Finance Minister Charilaos Stavrakis said the government will contribute the land on which the complex will be built. The land's value will be calculated by an international real estate appraiser.
The deal, the biggest direct investment ever, is a much needed boost for the Mediterranean island's real estate market. Although the latest figures show that property sales are edging upwards, foreign buyers are still staying away from Cyprus which was once one of the most popular destinations for overseas investors.
Sales climbed 37% in March compared with the same month in 2009, according to the figures from the Department of Lands and Surveys. And during the first three months of the year they were up 31%. But prices are still subdued.
The real estate industry in Cyprus is hoping that the long awaited changes to planning and title deed legislation will help restore investor confidence in the market.
The Council of Ministers last week approved six bills concerning reforms to the legal framework governing building permits and the issue of title deeds. An estimated 130,000 properties in Cyprus are currently without title deeds.
Meanwhile some property developers are developing new marketing strategies in the hope of attracting a more up-market overseas buyers. Luxury developments are to be aimed at wealthier buyers in the Middle East rather than bargain hunters from the UK and Ireland.
Developer Aristo confirmed it is launching a luxury range of properties likely to be marketed through agents in Saudi Arabia, Kuwait and Qatar. Its other properties are aimed at middle to low end buyers from the UK, Scandinavia and central Europe.
This article has been republished from Property Wire.
hotel, property investment, luxury hotel, Luxury development, Aristo