Andreas Panayiotou on establishing one of the UK’s biggest property companies and his view of Cyprus' real estate market

Born and raised in East London, Andreas Panayiotou always considered Cyprus his home. Taking the reins of a modest residential business from his father, he grew it into one of the UK’s largest private landlord empires - The Ability Group.

He later ventured into commercial real estate and hotels, all the while turning what others might see as setbacks – like dyslexia – into powerful advantages.

At 25, you took over your father’s small residential business and transformed it into one of the UK’s biggest property companies, The Ability Group. What was the biggest challenge in establishing yourself as a property developer?

In the beginning, the biggest challenge was getting banks to give me finance and winning their trust for the developments I was building. The second challenge was building the right team of contractors, architects and letting agencies – all in-house – and getting them to believe in my vision for the developments.

You’ve somewhat unusually credited your dyslexia for shaping your approach to business. What advantages did it give you that others might have seen as setbacks? Beyond that, what other traits have been key to your success?

I look at dyslexia as a positive in many aspects and never a negative. It gives you a photographic memory: as you don’t read words, you photograph them! This helps you focus perhaps more than other people. Also, in my early years I was an amateur boxer, which taught me discipline and a positive attitude that has always enabled me to find answers rather than give up.

With inflation and rising interest rates shaking up Britain’s property market, how have you managed to position The Ability Group to stay ahead?

It’s true that inflation and interest rates have shaken up Britain’s property market but you should not wait for these problems to happen. If you’re close enough to your business and your focus is there, you should be able to foresee rising interest rates and inflation, so you position your business on low leverage, which means low loan-to-value (LTV) when assets in the market that are highly leveraged cannot cover their interest payments. This has been a problem for the industry and will take one or two years to correct itself. But to be clear, we will never see base rates at 0% as they were for a number of years. I believe base rates will stabilise at around 3%-3.5% plus the banks’ margin of 2.25%. Therefore, all-in borrowing rates will be in the region of 6% and real estate yields should be in the region of 7%-8%, whereas, whereas before the interest rate increases, yields were around 3%-5%. It shows how much value has been lost in the real estate market to date.

Building on this, what do you see as the biggest disruptor for the real estate and hospitality sectors? Technology, regulation, shifting demand or something else?

We’ve already seen two massive disruptions to the real estate market in the UK. One was COVID-19 and, because of Brexit, unlike European governments that helped businesses with staff costs, loan payments, running costs, etc., the UK did not offer this assistance. So there was a huge cash draw on businesses to survive. Many companies didn’t! Once COVID-19 was over, we went into the high-interest-rate scenario, which again was a huge problem for businesses. Companies were waiting for interest rates to drop to a more realistic level. We have seen a 0% base rate for many years. Alas, these are never to return.

The Ability Group reportedly owned over £1 billion in residential property before expanding into hotels and commercial real estate. Creating such an empire surely comes at a price. What’s been the biggest personal cost for you?

In any business of this magnitude, which is trying to continue to expand, work takes up so much time and energy. It’s always been difficult to balance a family life with business but I have always been conscious of this and strived to achieve the right balance over the years, which is very important to me.

You were born and raised in London. Do you still feel a strong connection to Cyprus? Or to rephrase the question: what does Cyprus mean to you now?

Even though I was born and raised in the UK, I have always felt that Cyprus is my home. That’s where my parents were born and are now buried. My parents were immigrants from Cyprus and I was brought up in a Greek home in the UK. With such a background, you always feel that Cyprus is your home!

Cyprus’ real estate market has seen prices soar due to limited supply and rising construction costs. What do you see as the best solution to stabilise it?

This is always a good sign. Where there is limited supply, the solution is for the banking systems to provide more finance for people to build residential property and to look at planning regulations, getting planning consent agreed upon faster and more favourably toward the developer. This will increase supply, increase jobs and increase the number of foreigners coming to Cyprus to buy a property!

Finally, in 20 or 30 years’ time, what do you want people to say about Andreas Panayiotou? What legacy do you hope to leave behind?

My business interests have been a reflection of my personality throughout my career and I would hope that my legacy will have been to build for the future needs of communities with an underlying sense of fairness and equality.

This article was first published in the March issue of GOLD magazine. To view it click here