Cyprus’s tourism industry continues to develop actively. In the near future, construction of a new 5-star hotel is planned in the coastal area of Kato Paphos, which will strengthen the region’s hospitality map and increase the investment appeal of the island’s western coastline. The project became possible thanks to a long-term agreement concluded with the region’s largest winery cooperative organization SODAP and the company Kanika, which is already being called one of the most successful examples of effective use of undeveloped land assets.
This concerns a large land plot with an area of 41,160 m2, located in a prestigious coastal zone known as SODAP Beach. This area remained unused for many years, despite its high tourism potential and strategic location near existing high-class hotels.
Long-term lease terms and financial effect
According to the terms of the agreement signed on 21 January 2026, the plot is transferred on a long-term lease for 66 years. For the landowner, this means stable and predictable income for decades ahead, and for the region—the emergence of a new landmark tourism infrastructure facility.
The financial model of the deal provides that during the first 15 years the annual rent will be €800,000, with annual indexation of 2.5%. Starting from year 16 and until the end of the contract term, the amount increases to €1.6 million per year, also growing by 2.5% annually. In addition, the agreement provides a one-time bonus of €500,000. According to experts, this contract structure significantly strengthens the financial position of the plot owner and creates long-term income sustainability.
At the end of the lease term, a fully functioning 5-star hotel will remain on the site and will pass into the ownership of the landowner, which makes the deal particularly attractive in the long term.
5-star hotel and investment volume
Under the agreement, the investor committed to build a modern 5-star hotel complex with at least 285 rooms. The hotel is expected to meet current international quality standards and target the premium tourist segment, which continues to develop actively in Cyprus.
The total investment volume in the project is estimated at approximately €53 million, making it one of the most significant new hotel projects in Paphos in recent years. Experts note that such investments not only create new jobs, but also enhance the region’s competitiveness amid growing demand for quality beach holidays in the Mediterranean.
Competition, investment, and new players in Cyprus’s market
The development of hotel infrastructure in Paphos is taking place against the backdrop of broader changes in Cyprus’s tourism sector. In recent years, the island has been increasingly attracting international investors, including major foreign funds, which view Cypriot resorts as a promising destination for long-term investment.
The entry of such players into the market is changing the balance of power in the hospitality industry and helps raise quality standards. It is expected that new investments will not be limited to single assets and in the coming years will lead to additional projects focused on luxury and lifestyle tourism.
The project’s significance for Paphos and Cyprus
The appearence of a new 5-star hotel in Kato Paphos will be an important step for the further development of the region as one of Cyprus’s key tourist centers. The project strengthens the coastal zone, complementing the already existing hotel infrastructure, and contributes to the diversification of the island’s tourism product.
Against the backdrop of steadily growing interest in Cyprus as a year-round destination for recreation and investment, such projects play a strategic role, shaping the modern image of resorts and strengthening the country’s position on the international tourism map.