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
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