Troo­dos ‘res­i­dences’ up for sale – a good sign

Financial Mirror (Cyprus) - - FRONT PAGE -

It is with great sat­is­fac­tion that I heard of the govern­ment’s an­nounce­ment for the grad­ual dis­posal of the state-owned res­i­dences and other fa­cil­i­ties at Troo­dos.

Study­ing, at first glance, the an­nounce­ments it seems that the in­ter­est for dis­posal, ei­ther by sale or long-term lease, should be fo­cused on the govern­ment houses and to a far lesser ex­tent on the pic­nic and camp sites that, ad­mit­tedly, serve the gen­eral pub­lic. And this be­cause it is clear that in­vestor in­ter­est will only come for the houses rather than the oth­ers. Here are some points to con­sider: • Th­ese houses were built more than 70 years ago, and have main­tained the tra­di­tional char­ac­ter of the orig­i­nal Troo­dos com­mu­nity (stone-built walls, arches, etc.), mainly with roofs of cor­ru­gated iron.

• Th­ese houses are lo­cated within wooded sur­round­ings, scat­tered and over­look­ing a mag­nif­i­cent view and beau­ti­ful en­vi­ron­ment.

• They are all very compact in size and their prop­erty takes up no more than half of a small ??foot­ball pitch.

• With ris­ing tem­per­a­tures, the de­mand for sum­mer hol­i­day homes in Pla­tres has par­tially shifted to the Pro­dro­mos area (where there is grow­ing de­mand) and of course we ex­pect to see a big­ger de­mand for hol­i­day homes in Troo­dos - even if they are made avail­able un­der long-term leases of 4080 years.

• Many of th­ese houses, that were ex­clu­sively of­fered only to civil ser­vants, are presently in poor con­di­tion, al­beit with­out ma­jor struc­tural prob­lems in most of them, but the wood­work and the ceil­ings raise sev­eral doubts. At the same time, both the in­ter­nal lay­out is lim­ited to the con­cepts of past decades, while the lack of mod­ern fa­cil­i­ties, such as cen­tral heat­ing, is con­sid­ered costly. Ba­si­cally, most of them need com­plete ren­o­va­tion and upgrade.

• There is a real de­mand for th­ese houses mainly from Cypri­ots (Nicosia res­i­dents are ex­pected to ac­count for 50% of de­mand, fol­lowed by 30% from Lar­naca and Li­mas­sol with the least 20%, due to other moun­tain re­sorts in their prox­im­ity).

• I do not ex­pect de­mand from for­eign in­vestors, al­though it is not im­pos­si­ble for per­ma­nent res­i­dents, such as Rus­sians, Bri­tish ex­pats, etc. also to bid for them.

• For those who think that the strate­gic in­vestor will pro­vide them on the cheap should think again. As per ini­tial cal­cu­la­tions and with­out proper sur­veys, the re­pair / ren­o­va­tion / upgrade cost will ex­ceed EUR 2,000 per square me­ter, while the price is not ex­pected to be less than EUR 4,0005,000/sq.m. de­pend­ing on qual­ity, lo­ca­tion and prop­erty size.

• De­pend­ing on how the of­fers will be ten­dered and if the in­vestor will in­clude other prop­er­ties as a pack­age of­fer, the ones that will earn the big­gest profit will un­doubt­edly be the houses. There­fore, th­ese res­i­dences will carry the bur­den of sub­si­dis­ing the re­pair cost of the re­main­ing ac­tiv­i­ties that will prob­a­bly be at a loss. What will an in­vestor earn from a sum­mer camp or pic­nic site which is of­fered for very lim­ited time and de­mand for which is rather from low-in­come groups who are also much more sen­si­tive to price fluc­tu­a­tions. For this rea­son I would like to high­light the Ad­ven­ture Park, an in­vest­ment by a Rus­sian busi­ness­man in Pla­tres, which al­though greatly com­mend­able and de­spite all the worth­while ef­forts of pro­vid­ing a fan­tas­tic ad­ven­ture for 5 to 15 year old chil­dren, I do not be­lieve that it has had the suc­cess it de­serves.

• The grounds for suc­cess of the in­di­vid­ual units and thus the ef­fort to at­tract and de­velop the Troo­dos area is purely based on per­sonal ini­tia­tives, and not as a re­sult of a gen­eral pol­icy. So, we can com­pare Omo­dos with Pla­tres. The restau­rants and other es­tab­lish­ments in Pla­tres op­er­ate mainly on week­ends, while in Omo­dos you need reser­va­tions with at least a week’s no­tice in or­der to be able to dine at one of the restau­rants, any day of the week, with vis­i­tors fre­quently there mainly from towns and those who have hol­i­day homes near or on the way to Omo­dos.

• The suc­cess or fail­ure of such a ven­ture in Troo­dos is based on a high risk and cost, and will at­tract only those who will en­joy na­ture (and jus­ti­fi­ably) should ul­ti­mately be based on their own ca­pa­bil­i­ties and those of the mar­ket for there to be any suc­cess.

• Be­sides the sell­ing price and re­lated taxes, etc., prospec­tive buy­ers should take into ac­count the very high cost of main­tain­ing them. For a house of 100 sq.m. I do not ex­pect the main­te­nance cost to be less than EUR 1,500 and this pro­vided that there are no se­ri­ous im­ped­i­ments, such as bro­ken pipes from frost, etc.

• The more reg­u­lar oc­cu­pa­tion of th­ese units may re­sult in a need for a bi­o­log­i­cal waste treat­ment sta­tion, as most aquifers end up in the potable wa­ter of nearby sources and sea­sonal streams. If this is a re­quire­ment, then per­haps the whole con­cept will no longer be sus­tain­able for the in­vestor.

Un­for­tu­nately, the at­trac­tive­ness of the Troo­dos has di­min­ished due to the gen­eral rise in tem­per­a­tures, a re­duc­tion of the snow sea­son, bet­ter and shorter roads to the towns and, of course, the pres­ence of air con­di­tion­ing. Times have passed when fam­i­lies used to load up the beds on their cars or on buses for long stays of sev­eral months in the coun­try­side or the moun­tains, while the changes in at­ti­tudes and so­cial de­vel­op­ment do not help ei­ther, whereby now par­ents fol­low their chil­dren to the beaches.

I will be look­ing for­ward to the de­tails of the govern­ment ten­der plan in or­der to com­ment any fur­ther.

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