Cyprus prospects and bureaucratic obstacles
Mixed developments, based on studies that have been prepared internationally, are the sector that attracts the most investment interest in recent years, opening up a wide field of prospects. These are developments, which combine units for residential or hotel use together with other uses, such as shopping and business centers, restaurants, rehabilitation and wellness centers, sports facilities, marinas, clinics, which facilitate everyday life, as they eliminate distances.
In mixed developments, each part of the development reinforces the others. Thus, in a development that includes a hotel, hospitality can be combined with a unique experience of shopping, wellness, performing arts, etc. Studies abroad have shown that mixed use of a hotel and shopping center increases by 30-40% the revenue per available room compared to a simple hotel.
What applies in Cyprus
Cyprus, despite the declarations and government efforts, seems to have many steps to take in this area. Investors with significant and costly investments in their assets, of strategic, indeed, importance for the country, have publicly referred to “insurmountable, time-consuming and destructive” bureaucratic procedures, a state machine culture that makes it very difficult to complete large developments, as well as in a lack of stability in the regulatory framework and business environment. The President of the Republic, through his recent statements, appears determined to win the bet of attracting foreign investment, even characterizing foreign investors as the “best ambassadors of the country abroad”, however, in order for this to be possible, radical cuts, legislative regulations and above all changes in the culture of the state machine, both at the political and technocratic levels.
Experts in the investment sector point out the need to form a global and integrated national strategy, with the main characteristics being flexibility, adaptability to conditions and demands and the ability to effectively solve problems, as the existing horizontal and inflexible enforcement of laws, regulations and measures acts as a hindrance to attracting investment.
An indicative example of the lack of integrated strategies and planning observed in Cyprus is that of the campaign to attract foreign company Headquarters and digital nomads, where, as characteristically pointed out by ETEK, although it is generally beneficial for the Cypriot economy, it has nevertheless worked aggravating regarding the housing problem. If there was a comprehensive strategy, measures and policies could have been implemented in time to prevent such a development. In this direction, mixed developments could also contribute, mainly outside urban centers, which serve this purpose entirely.
In particular, with regard to mixed developments, the existing legislative and regulatory framework mainly emphasizes mixed tourist developments, i.e. the synergies of hotels and residential units. However, a more expanded form of mixed developments, which would include e.g. beyond the hotel and shopping centers, clinic, offices, etc., it could contribute much more at the level of local society. Such a thing, however, always comes up against some provision, some legislation. A typical example of anachronistic legislation is that of the Law on Private Hospitals, which does not allow the inclusion of a private hospital in a mixed development.
The issue was recently raised by the Association of Major Developments, which in its meeting with the Deputy Minister of Tourism conveyed his proposal for the “Integrated Tourist Complex”, which “will contribute to the creation of innovative organized tourist complexes, of high quality”.
Substantial modernization of both the regulatory framework, as well as the wider culture and processes, can contribute significantly to attracting investors for mixed-use developments, which in turn will have a significant impact on a number of key areas and particularly in areas that suffer from seasonal work, such as the free area of Famagusta, which would have multiple benefits from the creation of a business zone with mixed residential, office and commercial developments. At the same time, the attraction of mixed developments can contribute significantly to the further development of specialized categories of tourism, such as medical tourism, education and the attraction of research and technology companies, etc.
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