Cybarco CEO Michalis Hadjipanayiotou: Optimistic about real estate, concerned about price increases

Michalis Hadjipanayiotou, CEO of Cybarco Development, expects the real estate sector to have a positive year in 2025, given the growing interest from international companies to get established in Cyprus but also from non-Cypriot tax residents (non-dom).

According to Hadjipanayiotou, Cyprus has continued to attract a significant number of foreign investors, which creates increased demand for quality real estate, especially in prime areas.

In an interview with InBusinessNews as part of the "IN Business Forecasting 2025" series, Hadjipanayiotou also expresses concern about the limited availability of real estate on the market, as the lack of inventory is expected to lead to a further increase in prices, unless the speed of issuing planning and building permits improves.

As for the trends expected to shape the real estate sector, the CEO of Cybarco Development refers to the growing preference of clients for projects that offer services and shared facilities, noting, however, that the biggest challenge facing the sector is the high cost of construction and the lack of specialised personnel.

Hadjipanayiotou also discusses Cybarco’s multitude of current and upcoming projects, which include continuing work to complete the third and final building of Trilogy Limassol Seafront, getting to work on the new project in Nicosia, Park Residences, as well as the boutique projects in Limassol, Naftikos Residences, Aktea Residences 4 and Seaview Heights.

How do you think the Cypriot economy will perform in the new year? How optimistic are you about its prospects?

Remaining optimistic, I believe that even though challenges exist, the Cypriot economy has all the resources to continue its upward trajectory.

For 2025, the prospects are promising and the Cypriot economy is expected to move on a positive trajectory, despite the geopolitical challenges that continue to affect the wider region.

The International Monetary Fund predicts a GDP growth rate of 3.1% (an improvement over the previous estimate of 2.9%), a forecast that places Cyprus among the fastest growing economies in the Eurozone.

Meanwhile, the Ministry of Finance is even more optimistic, estimating growth of 3.7% for 2025, based on strong performance in sectors such as real estate, tourism, professional services, as well as investments in sectors such as technology and energy. Inflation is expected to decline to 2.0% in 2025, while unemployment is forecast to decline further to 5.1%.

To further strengthen the growth outlook, it is crucial to move forward with the necessary structural reforms as soon as possible and to make efforts to maintain fiscal stability.

The effort to combat the high cost of living remains crucial to ensuring social cohesion. Further measures are needed to strengthen the purchasing power of households and support small and medium-sized enterprises.

The integration of renewable energy sources, as well as the shift towards green infrastructure, can reduce energy costs and create new opportunities. Thus, combined with the continuation of an investment-friendly policy, there is the potential to maintain the well-being of citizens, while strengthening the overall resilience of the economy.

The biggest risks for the Cypriot economy

What do you see as the biggest threats to our country's economy? What should be considered in order to ensure its growth trajectory?

I believe that the greatest risks to the Cypriot economy come mainly from the increase in public spending and continued inflation.

The continuous increase in public spending, especially in periods of economic growth, raises serious concerns, as it limits the ability to build up reserves that are necessary to deal with future crises. It is important to have fiscal discipline.

GDP growth should not be accompanied by a corresponding increase in spending, but should be directed towards long-term economic stability. At the same time, inflation remains high, which affects the purchasing power of citizens and increases the operating costs of businesses.

The government and the private sector must work together to address this problem, by promoting measures that will reduce the cost of living and improve the competitiveness of the economy.

To ensure our country's growth path, a strategy is required that combines fiscal prudence, inflation stabilisation, and targeted investments in sectors with high added value.

Only with these approaches will the Cypriot economy be able to maintain its positive trajectory and effectively address future risks.

This is what will make Cyprus even more attractive for foreign investments

What should Cyprus do to become an even more attractive destination for foreign investments? And how important, in your opinion, are they for its economy?

Cyprus can become an even more attractive destination for foreign investment with targeted actions that enhance competitiveness and improve the business environment.

Reducing bureaucracy and further digitising processes is crucial. Investors are looking for an environment where processes are transparent, fast and easy, and Cyprus has room for improvement in this area.

Furthermore, although the creation and operation of the Provincial Self-Government Organisations constitutes a radical change in the map of Local Government, it is necessary to make significant upgrades and optimisations in order for this institution to be considered successful.

The smooth functioning of this institution is essential to ensure fast and efficient procedures, which will facilitate investments and strengthen investor confidence.

Problems or delays related to licensing by local authorities need to be addressed immediately. For example, it now takes more than a year to issue planning permits. This must be resolved immediately by speeding up the procedures.

Foreign investments are extremely important for the Cypriot economy, as they create new jobs, enhance market liquidity and contribute to the introduction of technology and innovation.

Attracting investment can also support the diversification of the economy and shield it from future challenges. With a strategic focus on sectors such as green energy, technology and quality tourism, combined with a reduction in bureaucracy, Cyprus can consolidate its position as a leading investment destination.

Further price increases if limited availability continues

Regarding your company's sector of activity, how do you estimate it will develop in 2025? Are there any issues that concern you?

I believe that the real estate sector will move positively in 2025, given the growing interest from international companies (mainly ICT) establishing themselves in Cyprus and from non-Cypriot tax residents (non-dom).

Cyprus continues to attract a significant number of foreign investors, which creates increased demand for quality properties, especially in prime areas. However, I cannot hide my concern about the limited availability of properties on the market.

The lack of inventory is expected to lead to further price increases unless the speed of issuing planning and building permits improves. Currently, for projects exceeding 20 units, the permit issuance process can take around a year, creating delays that affect the flow of new projects.

It is critical to make improvements to the licensing system to facilitate growth and meet increasing demand. Despite the challenges, I remain optimistic, as Cyprus’ attractiveness as an investment destination and the steady demand for high-quality real estate are expected to support the market and our operations in 2025.

High construction costs and lack of personnel

What are the biggest trends/changes you expect to occur in your sector and what are the most significant challenges?

The biggest trends expected to shape our sector concern the growing preference of clients for projects that offer services and shared facilities.

The emphasis is no longer placed so much on the size of apartments or mansions, but on the functionality and quality of life that real estate can offer.

Our buyers are looking for projects that incorporate modern infrastructure, such as gyms, recreational areas and management services that serve their needs. However, the biggest challenge facing our sector is the high cost of construction and the lack of qualified personnel.

Finding workers in the sector has become particularly difficult, which affects the speed of project completion and in some cases, quality. At the same time, the cost of materials and services remains at very high levels, creating pressures on prices and profit margins.

To address these challenges, it is important to invest in new technologies and manufacturing methods that improve efficiency, while at the same time policies that promote the attraction and training of personnel in the sector must be strengthened.

With strategic adjustments, we can continue to meet customer demands and maintain the competitiveness of our sector.

The trend of acquisitions and mergers

A strong trend that seems to be taking hold in Cypriot business is that of acquisitions and mergers. Will we see it strongly in your sector as well?

The trend of acquisitions and mergers observed in Cypriot business will hardly extend to our sector, as the majority of businesses in the real estate sector are family-owned.

Traditionally, family businesses prefer to keep control and management within the family, which reduces the appetite for mergers or acquisitions.

Although there may be isolated cases of collaborations or strategic alliances for major projects, the general dynamics of the sector remain oriented towards maintaining independence and inheritance, a characteristic of most companies in the industry.

Cybarco's projects in 2025

What can we expect in terms of your organisation's plans and development strategy in 2025? What moves do you intend to make in this direction?

In our project Trilogy Limassol Seafront the first owners have already moved into their apartments, while the offices under the impressive architectural overhang of the West Tower are now operating normally.

This project is another success story of Cybarco and the Lanitis Group in the field of real estate sales, with only 10 apartments available in the two front emblematic towers and 8 in the North Residences, the new must-see destination is coming to life, with the opening of the 6,850 sq. m. public square.

In addition, we continue uninterrupted work on the completion of the third and final building, which is part of the second phase of the development and includes private spaces with a total area of ​​6,700 sq. m. featuring gardens, a playground, swimming pools and a pool bar.

The team of experienced professionals at Cybarco affiliate BeCyprus, which has been created to manage rentals, properties and common areas, as well as to offer personalised lifestyle services to our clients, will be even busier in the new year.

Following the great success of our Attikis Residences project in Nicosia, we have secured land in a prime area for our new project in the capital, Park Residences, which will commence construction in early 2025. It is located in one of the best spots in the city, right next to the lush green park of Agios Dimitrios on the Acropolis, offering a unique opportunity for luxurious and comfortable accommodation in such a central location.

The project will consist of 12 two and three bedroom apartments of impressive, contemporary design and with prices starting from €300,000.

The client profile that this project attracts includes professionals, young families and individuals who appreciate luxury and comfort. Owners will enjoy the close proximity to the city centre, easy access to services, shops and public and private schools for their children, as well as the tranquillity, beauty and facilities of the park with which it is adjacent.

Park Residences ideally combines urban life with nature, making it an excellent choice for those seeking the best. I believe that acquiring an apartment in this project will upgrade one's quality of life, while in the long run it will multiply its value.

In Limassol, work will begin on our boutique projects Naftikos Residences just 100 meters from the Limassol Nautical Club and Aktea Residences 4, also very close to the sea, as well as Seaview Heights, a gated masterplanned project located in a panoramic location in Germasogeia with views of the city and the sea. We have also secured land in prime areas of both cities for the development of other projects, which we hope will also start within the year.

Finally, in our recently awarded International Property Awards project Akamas Bay Villas in the most idyllic area of ​​Cyprus near the Akamas Peninsula, only two ready-to-move-in seaside villas are available for sale.

Given the increased interest in real estate in the area, which is mainly due to the upgrades underway in the area, we are building another four villas.

The upgrades concern projects such as the expansion of Latchi Marina, the construction of two five-star hotels, the Paphos-Polis road, and others. It is worth mentioning the fact that in the summer of 2024, after the establishment of our company BeCyprus, some villas in the project were made available for rent.

The performance exceeded all expectations, and as a result, other villa owners expressed interest in having the company manage the rental of their own properties as well.

In closing, at the heart of everything we do will always be our love for Cyprus and our passion for improving people's lives through our pioneering projects. We will continue to prioritize the creation and development of projects and services that offer added value to our clients and that contribute to the improvement of the cities in which we operate.

Thus, with a vision of transforming the urban environment in a way that upgrades the quality of life and by promoting innovation, our goal is to remain a pioneer in our industry, creating projects that offer "more than just a property" and that enhance the image of Cyprus as an ideal place to live, work and invest.