The Cypriot economy – and in particular the real estate sector – is experiencing a period of substantive growth, following the early 2000s financial crisis. In fact, Cyprus now enjoys one of the highest growth rates in the EU at around four percent per year. Macroeconomic forecasts show a sustained growth of more than three percent in the coming years. Unemployment has been reduced to 8.6 percent and is expected to drop even further. From January to June this year, property sales in Cyprus rose by 24 percent to 4,470 — from 3,610 in the first half of 2017.
“Investors are looking for a country that has prospects and has just come out of a crisis. So Cyprus clearly has prospects, and clearly has turned around the economy, so this is the right time,” said Director of the Leptos Group, Pantelis Leptos. The Leptos Group is one of the biggest land and building development groups in Cyprus and Greece, comprising more than 30 companies and employing more than 1,300 people.
Established in 1960, the group has expanded to international markets, from Russia and the Middle East, to Africa and Asia. It is involved in healthcare, education, tourism, and – maybe most importantly – real estate.
“We have developed the biggest real estate project in Cyprus” explained Leptos. “It is called Kamares. It is a villa project up on the hills. A very difficult project, it was in the middle of nowhere 40 years ago, and now it has 1,100 villas built.”
The Leptos Group is in the midst of another huge project called Neapolis. Located in the Paphos region. It covers an area of more than 1.1 million square metres, and will be a new smart eco-city between Paphos and Geroskipou.
“Neapolis is ambitious and is a true reflection of Cyprus. (…) it is the first time a city is going to be developed, designed from scratch, to have certain principles about energy performance, bioclimatic buildings and so on,” said Leptos, excited about this mega-project, which will include a new hospital, private university, innovation centre, shopping mall, business and commercial centre, residences, and park areas.
The idea of a multi-pronged business opportunity is nothing new for the Leptos Group. Leptos’ father, Michael Leptos, started the group 58 years ago, when Cyprus was still an undeveloped gem. The elder Leptos noticed that his town, Kyrenia, had much of the same scenery as some of the towns in France and Italy that were attracting a lot of tourists and foreign investors. “So he started doing a lot of things between tourism and real estate and a lot of things in between, and that proved to be the right formula,” said Leptos.
The family left Kyrenia in 1974 due to the Turkish invasion, and restarted the same business in the southwest town of Paphos. The family eventually became one of the biggest private landowners in the north and the south. “There was a lot of vision when he was buying the land,” Leptos said of his father, “people thought he was crazy”. Leptos explained that the wider population did not foresee that the land his father had acquired would increase steadily in value, once the necessary infrastructure had been put in to place. “People could not recognize, in the early days, the possibilities of tourism, real estate, health care, education” added Leptos.
Now – as leader of one of the largest land developers in Cyprus and Greece, chairman of the Cyprus Land and Building Developers Association, and board member of the Cyprus Investment Promotion Agency – the younger Leptos is maintaining his father’s diverse focus and positive vision for Cyprus. “Cyprus has a predetermined future,” he stated. “We will become a service centre of the region. As a service centre, you need tourism, you need infrastructure, you need real estate, you need health care, you need education, you need legal [services], banking, company facilities. This is for me not a question of ‘if’; it is a question of ‘when’ and ‘by whom.’” The Leptos Group looks like it’s answering the ‘by whom’ question.
The recent natural gas discoveries off Cyprus’s shore in the Mediterranean provide additional support to Leptos’s vision – and will likely provide a boon to the group’s business. The gas discoveries are expected to create real estate needs, as history has shown in other countries like Norway and Scotland. There will be demand for storage facilities, infrastructure, offices, and housing, “so there will be a big knock on effect in all the activities that our group is involved,” explained Leptos.
Already, due to the gas discoveries, international investors, including the U.S.’s Noble Energy, ExxonMobil and Italy’s ENI, have upped investment in Cyprus. The oil and gas sector is believed to become a key driver of economic growth in the coming years, while real estate remains one of Cyprus’s main drivers of economic growth and a key contributor of foreign direct investment.
Around 51 percent of property transactions in Cyprus are made by foreigners, and an increasing number of investment funds are making investments in Cypriot real estate.
“My forecast is that Cyprus will have a long period of very solid growth,” said Leptos, adding, “Leptos Group will be (at) the forefront of this development because it is one of the drivers (that) has helped to create this growth.”