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By Antonis Loizou F.R.I.C.S. – Antonis Loizou & Associates Ltd – Real Estate Valuers & Estate Agents
Paphos is one of the main tourist centres in Cyprus with an operational season almost 12 months and with its existing beds increasing next year alone by a further 2,000 beds.
The centre of the tourist/visitor area is Kato Paphos and especially the coastal Poseidon avenue. There is not a single visitor who will not walk along this road with the top attraction mainly between the Castle and the so called Municipal Baths. This attraction for the visitors is under constant improvement by the municipality and the government, as well as by the industry. The area has all going for it, including and in addition to the castle, the mosaics, ancient city and theatre, ample parking and now with the beach improvement under way with the completion of the breakwaters up to the C.T.O. cafe, will add to its attraction (the completion of the new Kanika Hotels and the long awaited Edem project).
Commercial/shop rentals are on the up reaching nowadays over EUR 50/sq.m. on the top end and much lower around EUR 20-30/sq.m. for the not-so central seaside area. Poseidon avenue being commercially developed sometime ago, is plagued by mainly mixed quality buildings in disrepair – especially on vertical floors and the unacceptable placement of display signs of all sorts of nature and quality. So we have on the one hand a “secured” commerciality and on another dilapidated buildings and objectionable appearance. It appears that most of these aged buildings belong to various owners, who cannot come to an agreement to renovate them, whereas an effort on two projects on our part to get them renovated have failed both due to attitudes and (to a lesser extent mind you) lack of funding. It is a financially crazy situation since apartments along/near Poseidon avenue can reach an income (2 bed) of around EUR 5.000-9.000 p.a. in short lets.
Another high street to note is the Tomb of the Kings-Coral Bay road with the main/central commercial area extending approximately 1 km from the Mall. Some run-down buildings along this road are now under renovation showing the trends of development, whereas the location of the Cyprus casino will play an important role in its location commerciality (I understand that it will be in a space where the Debenhams shop was, but nothing is certain). There is a major improvement in the old town commercial area after its renovation, but in order for this area to become commercially viable, it has a long way to go. We have submitted a rough detailed proposal of our views to the municipality and we await for its response (it is worth paying a visit and realise that blank walls can be decorated with tasteful graffiti and flowers).
I recently had an interesting encounter with a Greek firm that operates eight shops in tourist locations in the Greek islands. They earmarked a Poseidon (central) shop with a rental of EUR 4,000 p.m. The firm stated that their top shop at Mykonos was let for a similar rental and as such by comparison, the Poseidon shop was very expensive. We replied that Mykonos operates 2-3months (max.) per year, be it with more affluent visitors, but then Paphos has the same number of tourists (in addition to the hotels) and operates 12 months and with thousand of new beds added per year.
We have not convinced them (they know better) but if we are to compare the Limassol Marina and old harbor restaurants and shops, which are now let at EUR 50/sq.m. the Poseidon avenue central is competitive. So that we have a more clear information, the Paralimni hotels road (top commercial road of the region) are now showing rentals of around EUR 50/sq.m. and for the second grade commercial area (Pernera) at around EUR 20/sq.m. – but then this region has a most seasonal (7 months) period and aimed at a lower income group of visitors and the area is affected by the all inclusive tourists which have limited extra budget to spend.
Tourism has a direct impact on rental levels and as tourist numbers progress, so will the commercial unit rentals. Care is required however since high rents may not make a business economically viable (although similar units on same locations show large differences in rental levels, emanating from the operator’s ability to manage, quality of service and personality of the staff). This is shown on the bookings of restaurants in particular, where one restaurant has a waiting booking list of 3-10 days and the one next door is practically empty. This new situation will cause the survival of the best and those who fall behind the new upgrading requirements will close their operation at the end.
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