The casino and the prop­erty mar­ket

Financial Mirror (Cyprus) - - FRONT PAGE -

We have fi­nally reached the end. Of the orig­i­nal 12 who showed in­ter­est for the Cyprus casino, we short­listed three and now there is only one. The rea­son is well known and is based on the heroic “NO” our MPs de­clared to ex­clude the lease of state land for the project, thus di­rect­ing such an in­vest­ment di­rectly to the pri­vate sec­tor rather than the state sec­tor. Ob­vi­ously, the few re­main­ing landown­ers asked for ex­ces­sively high sell­ing prices and in one case the land value ex­ceeded the ex­pected de­vel­op­ment project cost of EUR 500 mil­lion. I would like to re­it­er­ate that our MPs, through their mon­strous mis­takes that will af­fect the Cyprus econ­omy, have some crim­i­nal re­spon­si­bil­ity.

We have ar­rived at Zakaki, also known as Fa­souri, a purely agri­cul­tural re­gion of west­ern Li­mas­sol. A de­pressed area in a green en­vi­ron­ment suf­fer­ing from mos­qui­toes, but with sev­eral ad­van­tages: • The land is ex­ten­sive and the value quite at­trac­tive. • It is near Li­mas­sol with de­vel­oped ser­vices and good roads within close prox­im­ity to the Li­mas­sol-Paphos high­way.

• Ii is ‘next’ to many things: the MyMall shop­ping cen­tre (with plans for ex­pan­sion), the Water Park (Lani­tis) and next to the planned golf course. Also, the pop­u­lar Ladies Mile beach is just ten min­utes away by car.

• These projects next to the casino to­gether with the Li­mas­sol seafront and the Ma­rina, the fish­ing har­bor and other projects that will be built (I’ve heard of a fam­ily busi­ness in Fa­souri that wants to start a train for chil­dren, a win­ery and wine tast­ing) add to the whole scenery, and the ex­is­tence of Li­mas­sol Port just ten min­utes away, makes it a des­ti­na­tion for cruise ships to visit. You might ask your­self, is a casino re­sort suit­able for fam­i­lies? I do not know if it helps the whole con­cept.

The vil­lages that will ben­e­fit di­rectly from this de­vel­op­ment in the broad­est sense are Zakaki, Tra­choni, Kolossi, Akrotiri and even the most re­mote ar­eas out­side Li­mas­sol, such as the golf cour­ses in nearby Paphos.

The casino re­sort will not be just a “gam­bling club” but a unique project in Europe with Las Vegas type spec­i­fi­ca­tions, with restau­rants, en­ter­tain­ment venues, con­ven­tion cen­tre for 2,000 peo­ple, in­clud­ing a 5-star ho­tel (500 rooms) and many oth­ers. It is worth con­sid­er­ing the new smok­ing pro­hi­bi­tion law where sim­i­lar in­vestors in Spain with­drew their in­ter­est in sim­i­lar casino project be­cause smok­ing was for­bid­den.

We there­fore ex­pect that with the an­nounce­ment of the start of work and com­ple­tion, lo­cal real es­tate prices will prob­a­bly rise to dou­ble the lev­els to­day for both home plots, as well as for large pieces with the new relaxations that al­low all kinds of de­vel­op­ment, fol­low­ing the con­straints within SBA that have been lifted.

In pre-cri­sis “golden” years of growth, the in­creased in­ter­est would have al­ready oc­curred, but in an­other time. I ex­pect that in the next year (af­ter de­tailed plans have been con­cluded) to see an in­crease in de­mand for real es­tate of around 20% and with the start of work of the project an in­crease of 30%.

I ex­pect the pres­ence of about 2,000 work­ers in the area will also in­crease the de­mand for apart­ments for rent, plus apart­ments for casino guests in groups, and maybe a fur­ther 100 units for car hire agen­cies, taxi, take away, restau­rants and more. Si­mul­ta­ne­ously there will be around 500 golf villas for higher bud­gets. Prob­a­bly there will be de­mand for ser­vices that re­late di­rectly or not to the casino (in Las Vegas there are of­fices for wed­dings, but also of­fices for divorces and other strange mat­ters).

It is known that the big­gest gam­blers in the world are the Chi­nese, fol­lowed by the Is­raelis, the Greeks, Rus­sians, etc. We have good re­la­tions with all these na­tion­al­i­ties, while the new China mar­ket with the ex­pected di­rect flights by Cobalt may also help.

Cer­tainly not to be over-op­ti­mistic but we should be con­cerned be­cause there are is­sues which cause some skep­ti­cism, such as the search for fi­nanc­ing by the win­ning bid­der, ob­sta­cles in Cypriot bu­reau­cracy, as well as the re­ac­tions by lo­cals and casi­nos in the greater re­gion, while we should also con­sider the in­fil­tra­tion by crim­i­nal gangs, or even the govern­ment get­ting stricter, as was the case with the bet­ting chain OPAP that has lost sev­eral priv­i­leges.

As for the tem­po­rary casino plan to be lo­cated at Monte Ca­puto, this is prob­a­bly the best so­lu­tion for Li­mas­sol, while casino ser­vices in Ni­cosia (per­haps at the Kykkos prop­erty) is also a pos­i­tive de­vel­op­ment, pro­vided that it is linked to a ho­tel in the cap­i­tal, be­yond the “satel­lite” li­cense for ta­bles and gam­ing ma­chines.

Dur­ing a re­cent visit to the Casino in Malta, I no­ticed at least 1,000 peo­ple, mostly tourists, who were play­ing on the fruit ma­chine and a fur­ther 100-150 in the main gam­bling area. “We are not only in­ter­ested in the play­ers, but also the greater ben­e­fit to Malta,” the man­ager of the casino told me.

Good news, then, for the re­gion and the greater area of Li­mas­sol that should be con­grat­u­lated for yet an­other achieve­ment.

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