For­eign in­vestors breathe new life into Ni­cosia with new ho­tels

Is­raeli con­sor­tium mov­ing in to build ho­tel as cap­i­tal looks to re­brand as an events hub

Financial Mirror (Cyprus) - - PROPERTY - By Kyr­i­a­cos Kil­iaris

Ar­guably Ni­cosia was the big­gest ca­su­alty of the fi­nan­cial cri­sis as money drained from the cap­i­tal, now there is re­newed in­ter­est by for­eign in­vestors in build­ing new ho­tels to make it a hub for in­ter­na­tional con­fer­ences and events.

The heart of Ni­cosia is to play host to a new bou­tique ho­tel that will rightly take its place next to the cap­i­tal’s two big ho­tels, the Hil­ton and the Hil­ton Park.

The build­ing that hosted Laiki Bank’s for­mer head of­fices and head­quar­ters for Grind­lays on Makar­ios Av­enue in Ni­cosia has been ac­quired by an Is­raeli con­sor­tium aim­ing to trans­form the prop­erty into a ho­tel which will add value to the cap­i­tal as a tourist at­trac­tion.

Is­raeli com­pany Fat­tal Ho­tel Man­age­ment bought the for­mer 5,600 sqm Laiki build­ing in the cen­tre of town after it was put on the mar­ket for EUR 9 mln.

It will be Fat­tal’s fourth ho­tel in Cyprus after it bought the Leonardo Plaza Cypria Maris, the Sen­tido Cypria Bay and Leonardo Laura Beach & Splash Re­sort in Paphos from the Libra group.

Zacharias Ioan­nides, Di­rec­tor Gen­eral of the Cyprus Ho­tel As­so­ci­a­tion (CHA) con­firmed to the Fi­nan­cial Mir­ror that the Is­raeli con­sor­tium’s plans are go­ing ahead, com­ment­ing that this is just one of the few projects in­volv­ing new ho­tel units.

Con­firm­ing in­ter­est from var­i­ous in­vestors for small bou­tique ho­tels, he said that in­ter­na­tional brands are also look­ing to branch out to Cyprus and its cap­i­tal. Ioan­nides said that the Is­raeli con­sor­tium is look­ing to draw in a big brand name for the man­age­ment of the ho­tel.

“As CHA we wel­come these de­vel­op­ments and are ex­cited over the prospects gen­er­ated with the ar­rival of big ho­tel brands,” said Ioan­nides.

“We are sure that this will add value and in­crease Cyprus’ and the cap­i­tal’s rep­u­ta­tion, not only as a tourist des­ti­na­tion but also as a des­ti­na­tion for in­ter­na­tional con­fer­ences and events,” he added.

He be­lieves that big brands branch­ing out to Cyprus will play a role in the in­crease of tourists ar­riv­ing on the is­land over the com­ing years.

Ioan­nides found it en­cour­ag­ing that, in­ter­na­tional ho­tel chains are in­ter­ested not only in man­ag­ing ex­ist­ing ho­tels but are also look­ing to take on new ho­tel units.

“After the con­struc­tion of the Radisson Blu in Lar­naca, and the Sof­i­tel in Li­mas­sol, we are soon to wit­ness the con­struc­tion of new ho­tels in Ni­cosia”.

The de­vel­op­ment with the ex-Laiki build­ing comes shortly after news of the Greek com­pany Eth­niki Bank-sub­sidiary Pangea NBG is to ac­quire MIG’s ma­jor­ity share of Hil­ton Ho­tel in Ni­cosia which is up for grabs.

Pangea, ac­cord­ing to press re­ports, is the pre­ferred in­vestor to ac­quire 96.82% of the com­pany which cur­rently owns the pres­ti­gious Hil­ton Ho­tel.

Deal in early 2019

If there are no last-minute changes, the deal is ex­pected to be signed in the next few days and the trans­ac­tion will be com­pleted in the first months of 2019.

Pan­gaea will ac­quire 96.82% of the Cyprus Tourism De­vel­op­ment Com­pany con­trolled by MIG (75.08%) and Louis Plc (21.74%). The re­main­ing 3.18% is con­trolled by third­party in­vestors.

The ac­qui­si­tion of the Hil­ton will fur­ther the ex­pan­sion of Pan­gaea’s pres­ence in the Cypriot ho­tel mar­ket as the com­pany had also ac­quired the for­mer Hol­i­day Inn in the old town of Ni­cosia.

Pan­gaea has signed an agree­ment with Wyn­d­ham Ho­tels and Re­sorts for the man­age­ment of the once ad­mired ho­tel.

Also con­firm­ing in­vestor in­ter­est in Ni­cosia, Panos Danos, CEO of Danos / BNPRE Group said that a num­ber of in­vest­ment funds are on the look­out to in­vest in ho­tels in Cyprus and its cap­i­tal.

He said that they are in­ter­ested in ho­tels in Ni­cosia and are try­ing to come to agree­ments with name brands for the man­age­ment of these ho­tels.

“The Hil­ton drew the attention of five bid­ders, a clear in­di­ca­tion that Ni­cosia is draw­ing the attention of in­ter­na­tional in­vestors,” said Danos.

He said that in­vestor in­ter­est is a re­sult of an in­crease in tourists at­tracted to the is­land and its cap­i­tal, but also Ni­cosia’ po­ten­tial to evolve into a cen­tre for in­ter­na­tional con­fer­ences and events.

Danos added that ma­jor play­ers in ho­tel in­dus­try are eye­ing Cyprus and cap­i­tal.

“We know that the In­tercon­ti­nen­tal / Le­dra Mar­riott chain is eval­u­at­ing op­por­tu­ni­ties to in­vest in the is­land. The chain also is eye­ing the cap­i­tal,” he said.

How­ever, there are ob­sta­cles hin­der­ing this in­ter­est, noted Danos. the


“These in­vestors are nei­ther in the busi­ness of run­ning ho­tels nor are they de­vel­op­ers. So, they are look­ing for ei­ther ho­tels which are al­ready up and run­ning or for de­vel­op­ers to build new ho­tels and then take over,” said Danos.

As he ex­plained, in­vestors are put off by lengthy de­lays for projects to pass through the red tape of the Cypriot au­thor­i­ties.

Fair share of high-rises

Ge­orge Mouskides, Cyprus Prop­erty Own­ers As­so­ci­a­tion pres­i­dents (KSIA), said that while in­vestors are show­ing an in­ter­est in the cap­i­tal’s ho­tels, he also ex­pects Ni­cosia’s sky­line to see its fair share of high­rises.

He said Ni­cosia has started for­eign in­vestors in­ter­ested Cit­i­zen­ship-for-In­vest­ment scheme.

“Al­though the ma­jor­ity of in­vestors in­ter­ested in the scheme pre­fer to buy a sin­gle prop­erty worth the price set for par­tic­i­pat­ing in the scheme, there are those who would like to see their in­vest­ment of­fer re­turns,” said Mouskides.

“Ni­cosia prop­er­ties of­fer value for money, as they are cur­rently go­ing at one-third of sim­i­lar prop­er­ties in Li­mas­sol, with prospects of gain­ing value rather than de­valu­ing,” he added.

The prop­erty ex­pert noted that tow­ers be­ing built at the mo­ment, such as the 360 on Makar­ios Av­enue, will prove as to what ex­tent for­eign in­vestors, par­tic­i­pat­ing in the cit­i­zen­ship scheme, will make good of op­por­tu­ni­ties pre­sented in the cap­i­tal.

Phileleft­heros daily re­ported that in­vestors have plans to go ahead with erect­ing a ho­tel next to the old Amer­i­can em­bassy, not far from Hil­ton Cyprus, while a num­ber of high-rises are in the pipe­line.

It is un­der­stood that the in­ter­est shown, es­pe­cially for the con­struc­tion of new ho­tels, is not un­re­lated to the ex­ten­sion of the town plan­ning in­cen­tives ap­proved by the Coun­cil of Min­is­ters.

Ac­cord­ing to Phileleft­heros, rep­re­sen­ta­tives of in­vestors were in con­tact with govern­ment of­fi­cials, keen to find out if any changes have oc­curred as far as the in­cen­tive plans are con­cerned.

The Min­istry of the In­te­rior, which pro­moted the ex­ten­sion of the in­cen­tive plan, noted in a memo to the cab­i­net that to date, in­vestors have ex­hib­ited great in­ter­est, as the num­ber of ap­pli­ca­tions for the ex­ploita­tion of both tourist and res­i­den­tial land has reached 1,000. to at­tract

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