Foreign companies prefer Green Offices when they decide to relocate to Cyprus or open representative offices on the island. They have high requirements for the buildings in which they intend to work and to which they intend to relocate their staff. Local companies are also increasingly choosing to move from old buildings to new or renovated ones. This, in turn, reduces the volume of supply and contributes to rising prices for commercial property.
This is the conclusion reached by experts in the Cyprus property market.
In particular, according to local estate agents, office rents on the island have reached an all-time high in 2024, exceeding pre-recession levels. On average, rents in this segment rose by 8.5% last year. At the same time, Limassol, where a large number of foreign companies are concentrated, has traditionally led the way. Incidentally, office rents in this Cypriot city rose by 18% last year. If we look more closely, the cost of renting 1 m2 of office space in Limassol today is between 25 and 50 euros, in Nicosia - between 15 and 30 euros, in Larnaca - between 15 and 20 euros, in Paphos - between 10 and 15 euros, in the free areas of Famagusta - between 10 and 15 euros. Experts are confident that the demand for office space in Cyprus, especially in the luxury segment, will remain high until at least the end of 2024.
Interestingly, in addition to renting, investors are actively investing their money in the purchase of modern business centres to resell or lease offices to other companies.
Deals are being concluded at both the construction and planning stages. The greatest demand is for offices in the elite segment of the property market, which is not very common in Cyprus. This is because such projects are usually realised in very prestigious areas. Investors in the local property market require Cypriot developers to ensure that the buildings to be constructed have all the necessary environmental and energy certificates, and that the development of new projects takes into account ESG (environmental, social and corporate governance) standards.
The Cypriot property market has become fully aware of the need to construct new buildings or modernise existing ones based on the criteria of stable power supply, reduced pollution and sustainable development, as the existing office stock is significantly outdated and does not meet the needs of today's users," the experts explain.
Many companies have started to consider long-term environmental, social and governance risks in their business planning. When buying or renting offices, companies consider not only the cost of buying or renting, but also the cost of maintenance, electricity and water. Green certificates help to reduce these costs.
Not a surprising trend. More and more foreign companies are moving to the island and, unfortunately, Cyprus is not ready for them at the moment. Foreigners are used to a higher level of comfort in office space, which few projects can offer. As a result, the demand for office space, including the luxury class, is growing," said Maxim Arte, broker at DOM's Limassol office.