How profitable is it to rent an office in Cyprus?

Как выгодно арендовать офис на Кипре?
5 September 2022 Irina Starinskaia

Thousands of new companies open every month in Cyprus. As a rule, in the first years they rent an office.

The need to have an area in Cyprus, where you can accommodate your employees, professional equipment and all sorts of things related to business, is dictated by the strict rules of the Department of Registrar of Companies and Official Receiver, and not an urgent need.

At the same time, starting from April 2021, the volume of high-quality commercial real estate in Cyprus has sharply decreased, and the price of a square is growing inexorably.

Nevertheless, the soft taxation system and minimal competition attract more and more businessmen from all over the world to the sunny island. So we act according to the business plan and look for the most profitable solution.

When it comes to finding an office for rent in Cyprus, one should take into account the climate and lifestyle of the Mediterranean resort towns.

People here mostly get around in small cars, Vespa-style scooters and bicycles. In Cyprus, there is no and is not expected to be a railway, there is no metro, and public transport, which is a fleet of buses that do not compare watches, is popular only among high school students.

At the same time, in summer, from 8-9 o'clock in the morning until about 6 o'clock in the evening, the thermometer is much higher than 30 degrees, and in winter tropical showers with hail sometimes rage. But there are pluses: there are practically no traffic jams on the roads of Cyprus, and business cities (Limassol, Larnaca, Nicosia) are located quite close to each other.

Thus, it will be profitable to rent real estate where your potential customers and employees can physically reach.

And only the second point will be the price of rent. You can find office space through an agency or on your own, according to local newspaper ads, on the street or on thematic websites. As a rule, renting an office is associated with high costs and it is important not to make a mistake here, so the first option, although not the most economical, is reliable.

How much does it cost to rent commercial property in Cyprus?

The longer you rent the premises, the lower the monthly fee.

The cost of renting an office in Cyprus depends on the profitability of the object (the ratio between invested funds and profit), distance from the sea or the city center, as well as the condition of the premises (area, repair, number of floors).

Despite the fact that the average rental price is 15-30 euros per square meter per month, the range of prices for commercial real estate in Cyprus is striking in its diversity. If you are sure that your office will function for at least 5-10 years, there is a chance to get a discount from the landlord. Commercial real estate on historically significant streets is expensive, leave it to the tourism companies. Business districts with developed infrastructure are much more comfortable for doing business.

On the one hand, Cyprus has spacious modern class A offices, where tenants of ΙΤ companies and investment funds are fighting for a place, the number of which is growing every day.

But at the same time, if you walk along the central streets of Limassol, Nicosia and Larnaca, you will see many empty premises of small and medium area up to 200 m2, which look abandoned and useless. It can be concluded that small businesses are used to saving as much as possible and even dodging. In general, there is still a choice in Cyprus, but every new employer dreams of creating an ideal working atmosphere for their team, hence the hype around expensive offices.

It is generally accepted that the economy of Cyprus rests on tourism. The government is doing its best to support the sphere of new technologies. Representatives of both directions choose large and modern buildings. The same buildings or next to them house endless cafes and restaurants, gyms, spas, flower shops, pharmacies and small shops. The success of the latter is directly related to the purchasing activity of the former and the ability to park comfortably in the hot summer.

It is worth taking a closer look at rental options in ready-made business complexes. Most of the time they are expensive. But if you work individually or the staff is not numerous, a small but functional room is quite suitable. So, a fully serviced office of 20 m2, located on the 3rd floor of an office building next to the Limassol court, in the business district of Agios Nikolaos, costs 700 euros per month or 35 euros per m2 (+ VAT). The offer includes administrative and secretarial support, office equipment, tea/coffee, 24/7 office access, alarms and more.

The average area of ​​a workplace per person is 4.5 m2. You also need to take into account the place for placing additional special equipment.

Renting an office in separate premises is also profitable, but usually they need to be finalized. For an exhibition center or a shop, a 2-storey spacious room of 360 m2 in the historical center of Larnaca is perfect for 2200 euros per month. Real estate experts strongly recommend clarifying the possibility of repair and redevelopment before signing the Lease Agreement. In the real estate database of agencies, sometimes there are ready-made options for a specific destination (for example, a hospital, restaurant or spa center).

When choosing an office, it should be taken into account that young people prefer to work in bright open-space rooms, while older employees are more comfortable in a separate office. But no one will refuse the view of the sea and the pool on the roof.

The original option for the relocation of a medium-sized company is a hotel in the heart of Larnaca with 40 rooms. The building includes a conference room, office space, meeting rooms, kitchen, dining room, gym and even a private swimming pool. This option will cost 50 thousand euros per month. In some cases, it is indeed cheaper for a company to rent an entire hotel than to rent an office and an apartment for each employee.

There are not many skyscrapers in Cyprus, so a high-rise office is an indicator of success. In Nicosia, such options are cheaper than in Limassol. A whole floor in the highest office tower, located on the main business avenue of the capital, will cost 6,700 euros per month. Panoramic windows overlook magnificent mountains and red roofs of old mansions. From here, close to both the city center and the main highway.

A floor in an elite seafront tower in Limassol costs 35,000 euros per month. The quality of the offices will amaze even the most demanding clients. On the territory of the facility there is a fitness center, spa, many cafes, as well as branded stores. Undoubtedly, your employees will love their workspace and the now popular remote work will no longer tempt them.

In which city is it more profitable to rent commercial real estate?

In recent years, many investors have been particularly interested in Larnaca, a city on the south coast that is, in fact, the island's main air port. Conveniently located between Limassol and the capital Nicosia, the once quiet town today surprises with its leaps and bounds of development. Many start-ups and financial companies open in Larnaca every year. Meanwhile, rental prices in Larnaca are much lower than in Limassol.

In turn, renting in Limassol, the largest port of the island, will be beneficial for investors who want to develop a clearing or forwarding company: very modest taxes in the shipping sector allow you to get a decent profit.

The resort towns of Paphos, Protaras, Ayia Napa, Paralimni also have many premises for various purposes. But in winter, life in them resembles a sleepy kingdom and seems boring to many, despite the splendor of nature and the endless sun.

When is the best time to rent an office in Cyprus?

When renting an office, it is important to be ready to receive your clients at the right time. The commercial real estate market stands a little apart from residential and tourist real estate, so it is not very prone to fluctuations associated with seasonality. This takes into account the possibility of making a transaction, taking into account weekends and holidays in Cyprus. For example, on the eve of Christmas and Easter, many areas of business in Cyprus are sluggish.

What should an office tenant pay attention to?

There is no single golden set of rules for a successful tenant, but the lease procedure will be greatly simplified if the following recommendations are followed.

  1. A lease transaction for commercial premises is necessarily supported by a detailed Lease Agreement, which must be certified in accordance with all the rules of Cyprus law.
  2. The landlord must have a document confirming the right to lease the object (Property Management Agreement, if it is a sublease, or a Certificate of Ownership).
  3. Be sure to specify what and how much you will pay in addition to rent (utilities, maintenance of the lounge area, security, parking, unexpected repairs or redevelopment).
  4. To understand how comfortable it will be to work with the landlord, pay attention to the speed of his response to requests. Most likely, the style will not change in the future. You are required to provide all the necessary documents that you request before signing the Lease Agreement. Although in Cyprus it is not customary to rush, this is not the case.
  5. We have already said above that locations are the most important component when it comes to business benefits. Do not be too lazy to come and explore the area and its population on your own. Marketing research is one thing, but looking into the eyes of a prospective customer is another.
  6. When there are fewer and fewer rental options in the city you are interested in, it is worth taking a closer look at nearby cities. This is the situation in Limassol today, when the number of proposals does not cover demand.

The main evidence that rent is profitable is a thriving business

We have been renting a two-story building opposite a large supermarket near the city center for more than five years,” says the owner of a nail service studio in Larnaca. The girls leave the store and see our cozy beauty studio in front of them. This is how the first meeting happens. Further, it all depends on the skill of the employees. Shopping malls, large stores and women's beauty are all very closely related.
Our company has existed in Cyprus for over twenty years. But only in 2022 we decided to buy the premises in which we work. Before that, we were satisfied with the lease, - said an employee of an investment company in Limassol.
I've been renting the store for ten years now. Since then, the price has not changed. Of course, it is profitable, - says the owner of a vintage store in Paphos.

So, the business premises should be as suitable as possible for your type of activity, working hours and located in a convenient place. In order for rented real estate to bring maximum profit, and you do not waste time studying legal subtleties, it is better to turn to professionals who are well acquainted with the specifics of the market. Specialists will provide information on the best locations of the business area of ​​interest in the shortest possible time, even at a distance of thousands of kilometers. In addition, it is important to ask questions in time and clarify all unclear points, and it is worth moving into the office and starting repairs only after signing a clear Lease Agreement.

Interesting office options for sale

Interested in buying property in Cyprus? Welcome to DOM! Here you will find options for houses and apartments in Limassol, Paphos, Larnaca and Famagusta, as well as get the help of experienced professionals.

Read also:

  1. Varosha: the city where time stopped
  2. What can and cannot be saved on when renovating an old house or apartment in Cyprus?
  3. GESY General Health Care System in Cyprus
  4. TOP 5 areas of Limassol for real estate investment in 2022
  5. Is it profitable to buy land in Cyprus and build a house on your own?
  6. The story of Plus Properties in Cyprus
  7. Where to buy property in Cyprus so that you can easily sell it later
Source: DOM
Photos: DOM, Pixabay
29 November 2022 3:11
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