Charalambous: Domenica Group and the real estate, tourism and energy sectors in 2024

With the Domenica Group operating in three sectors of the economy - tourism, energy and real estate -, the group's Chairman, Christakis Charalambous, shares his evaluation on the course of these three vital business pillars, as well as of the economy in general.

In an interview with InBusinessNews, in the context of "IN Business Forecasting 2024," Charalambous expresses his assessment that despite the geopolitical developments in our region, the tourism sector will do better than last year.

According to him, the energy sector, although in the initial stages, also seems set to become one of the main pillars of our economy in the coming years, while in terms of the real estate sector, he emphasises that it has repeatedly proven in recent years that it is built on solid foundations and is an ideal investment solution during times of uncertainty.

Regarding Domenica, the group chairman points out that the company is welcoming 2024 with more than 20 development projects under construction, at the same time, he emphasizes that 2024 is also a milestone year for the Group's green arm, Domenica Solar, which specialises in Renewable Energy Sources.

“In terms of tourism, 2023 was one of the best years. Our group, owning more than 1000 tourist beds, will continue to offer a competitive and quality tourist product," he points out.

How do you see the economic environment shaping up in 2024, in light of inflationary pressures, high interest rates and unpredictable ever-changing geopolitical developments?

Indeed, 2024 brings with it many challenges for the global economy, due to the geopolitical developments in the Middle East and Ukraine, the continued increase in the cost of goods and especially energy, the increase in interest rates and continued inflationary pressures.

I believe that the Cypriot economy will experience similar challenges, especially if one considers its dependence on these economic and political developments.

Despite this, initial estimates for the country's economy remain optimistic, with international and local agencies predicting a GDP growth of 2.7%, and a further reduction in inflation.

At the same time, the real estate sector, one of the sectors in which we operate as Domenica Group, is sending out positive signals, with the most recent being the Central Bank report estimating that demand will remain at high levels.

2023 closed with a 16% increase in the number of sales documents, with about half of sales coming from foreign buyers.

I believe that in addition to the high standard of living offered by our country, sales in the foreign market increased due to the long-term efforts of the state and the private sector to promote Cyprus as an ideal destination for headquarters and investment funds.

What do you consider to be the biggest and most difficult challenges that the Cypriot economy will have to face?

I think the two main challenges will be increased costs and high interest rates.

On the one hand, the cost of living is increasing as a consequence of geopolitical developments, inflation, the increase in the prices of raw materials and the energy isolation of our island.

On the other hand, high interest rates bring about a decrease in business activity and mortgage loans, limiting demand from local property buyers.

The real estate sector is built on solid foundations

What do you think will be the course of the sector in which you operate in 2024?

Our Group operates in three sectors of the economy. In tourism, energy and real estate.

For tourism, despite the geopolitical developments in our region, we estimate that it will do better than last year, which was an excellent year.

The energy sector, although in its early stages, looks set to be one of the main pillars of our economy in the coming years.

The real estate sector in Cyprus has repeatedly proven in recent years that it is built on solid foundations and is an ideal investment solution in times of uncertainty.

We have learned from the mistakes of the past and this has allowed us to cope with the challenges created in a short period of time by both the Covid-19 pandemic and the changing geopolitical landscape.

I therefore estimate that despite the difficulties we have already analysed, 2024 will be positive. Of course, it is important not to be complacent and to continue to offer well-designed and innovative housing solutions to local and foreign buyers.

Geopolitical instability in the region could increase, at least in the near future, demand from foreign buyers. Cyprus is considered a safe alternative for investment or relocation for both businesses and families.

We hope that the stabilisation of inflation observed will be followed by a reduction of interest rates, helping both domestic demand and development projects in general to recover.

At the same time, there is optimism for further fundraising from the Recovery and Resilience Fund in 2024, which will significantly strengthen the sector and the country's economy.

What are the biggest industry trends and changes you anticipate in 2024?

I believe that the emphasis placed in recent years on creating more environmentally friendly projects will continue. I notice with great satisfaction that buyers now prefer "green developments" and more energy efficient buildings, which adopt ESG criteria.

All Domenica Group projects are energy efficient "A", using the most modern practices for recycling water and materials, using solar energy and reducing carbon emissions.

At the same time, due to the increased supply, I believe that land development companies will turn more to creating projects that offer services and amenities, thus distinguishing them from the competition. Such projects improve the quality of life of the tenants and significantly increase the future value of the properties. A striking example of this is our Elements Project in the heart of Paphos.

The problems…

What are the most important problems that are currently plaguing your sector and the solution of which you consider to be a priority in the new year?

One of the major problems facing the real estate sector is the delay observed in the licensing of development projects. This has the effect of reducing supply, which contributes to the housing problem that is being observed, while it also delays future investments.

It is therefore imperative to simplify the existing time-consuming procedures. The truth is that the Interior Ministry has been proving in recent months that it is willing to listen to the proposals of industry professionals, which gives us a measure of cautious optimism.

At the same time, the construction sector is plagued by a significant lack of human resources. This makes the redesign of the procedures required for the employment of workers from third countries an absolute necessity.

Also, the spike in construction costs over the past three years, which is continuing due to inflationary pressures, has brought increased risk and uncertainty to both investors and land development professionals.

The Domenica Group in 2024

What are your organisation's plans and strategy for 2024? Should we expect new developments and your further consolidation in the market?

Domenica Group welcomes 2024 with more than 20 development projects under construction.

We have recently completed the delivery of “Universal Residences”, a residential development of 50 apartments in the Universal area in Paphos and Domenica Sea View Villas in Chloraka, a development of 71 independent residences, will be delivered soon.

At the same time, work continues on the construction of Elements, our gran project in the center of Paphos, consisting of 96 apartments in 4 buildings.

It is an innovative project for Paphos, nestled in the beautiful Park of Colours, which offers a multitude of services to residents, such as an indoor heated swimming pool, fully equipped gym, concierge, conference rooms, multi-work space and recreation rooms.

The first two buildings of the project are under construction, while we plan to start construction work on the third building in February.

High demand for the project is forcing us to accelerate the marketing of the second phase of the project, i.e. 60 additional apartments in three new buildings, bringing the total of the project to 156 residential units.

In the two years 2024-25, more than 35 new development projects are planned, with a capacity of more than 650 residential units.

At the same time, 2024 is also a milestone year for the Group's green arm, Domenica Solar, which specialises in Renewable Energy Sources.

The company has in its portfolio 21 Photovoltaic Parks with a capacity of 95Mw and a value of more than €110,000,000, which in 2024 are on track for implementation, offering investment opportunities in the energy sector as well.

In terms of tourism, 2023 was one of the best years. Our Group, owning more than 1000 tourist beds, will continue to offer a competitive and quality tourist product.

Technological progress

What role does technology, such as artificial intelligence, play and what changes is it expected to bring about in your field?

Undoubtedly, technology affects all aspects of daily life and the real estate industry could not be an exception.

On the one hand, it is a very important sales tool. As Domenica Group, for example, in 2019 we proceeded to create a television studio at our headquarters to conduct webinars, podcasts and a series of online training programmes in Cyprus and abroad.

Also methods of promoting the properties such as virtual tours or other interactive means of presentation, allow potential customers to change the interior layout and the choice of materials for their future properties.

On the other hand, the use of modern methods such as Building Information Modeling (BIM) or other project management systems during the design and construction of a project increase efficiency and reduce construction time and costs.

Nevertheless, I believe that the construction sector in Cyprus still has a lot of room for improvement as far as the penetration of new technological means is concerned.

Certainly, the training programs now offered are a first step. But I believe the key is for professionals in the field to realise and accept the practical benefits they can bring.

(Source: InBusinessNews)