Increasing demand for Grade a office premises
Nicosia, being the capital and financial centre of Cyprus, is home to the public sector and most of the large businesses operating on the island. Traditionally, office space in Cyprus is found in the old common type multi-storey buildings which are mainly located in the heart of the cities. However, in recent years a trend for decentralisation began to occur. During 2017, the office market in Cyprus remained stable. In 2018, Grade A offices will be sought-after that are found in decentralised areas.
Government incentives are stimulating investment
The investment activity for 2017 is correlated to the incentives given by the government which seems to have attracted both foreign and local investors. The opportunity to obtain a passport has attracted many foreign buyers all over Cyprus (especially in Limassol and Paphos). In addition, tax incentives led to an increase in sales in the second half of 2017. The Cyprus real estate market has historically been divided into two submarkets. On the one hand the major urban centres of Nicosia, Limassol and Larnaca primarily driven by local demand and on the other hand, the seaside resort areas of Paphos and Famagusta mostly driven by foreign demand. Traditionally, the Cyprus property market is dominated by the residential sector, with the island’s geography and historical reasons partly dictating the dynamics of the various submarkets. However, the trend of development companies in recent years is the construction of office facilities intended mainly for the multinational companies attracted by the island. Grade A offices appealed to foreign investors and the prime yield reached 5.5% in 2017. In 2018 the economy’s performance is expected to continue accelerating and support the investment market.