Troodos ‘residences’ up for sale – a good sign

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.