Investments in commercial real estate in Cyprus: offices, hotel rooms, medical centers

Anastasia Taran
Head of Corporate Services
Reading time 10 minutes
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25 04.2023

Investing in commercial real estate in Cyprus is one of the most profitable avenues. The tourism sector has always been popular in Cyprus, and in recent years, the island has become a major international business hub in the European Union. In 2022 alone, the total transaction volume in Cyprus’ real estate reached a record high of 5.8 billion euros.

What is commercial real estate?

Commercial real estate comprises diverse properties not intended for residential purposes, designed to meet various business needs and generate income. This category includes offices, shops, warehouses, hotels, shopping centers, and more. The choice of commercial property location plays a crucial role as it can increase foot traffic and attract new customers, leading to revenue growth and business success.

Commercial real estate can generate income through several methods:

  • Leasing: This is a classic way to earn income from commercial real estate. Owners can lease their properties to entrepreneurs who use them for various business purposes. After deducting expenses for property management and maintenance, the owner receives net rental income.
  • Own Business: Owners of commercial real estate can also use the properties for their own businesses. This could be a restaurant, a shop, a medical center, and more. In this case, all the income goes directly to the owner, but it comes with significant responsibilities and costs for managing and maintaining the property.
  • Reselling: Investors can purchase commercial real estate, renovate and improve it, and then resell it at a higher price. This approach requires skills and knowledge in the real estate market but can be profitable.
  • Management by Brokerage Companies: Some business owners or investors entrust the management of their commercial real estate to professional brokerage companies. These companies take on responsibilities such as finding tenants, maintaining the property, and maximizing income for the owners.

It’s important to understand that commercial real estate offers numerous investment and business opportunities but requires skilled management and planning. The decision to purchase and invest in commercial real estate should be based on careful market analysis, goals, and the resources of the investor or entrepreneur.

Purchase of offices in Cyprus

Many companies, including global giants, are actively “moving” their offices and relocating employees to Cyprus due to the advantages of the tax system, high-quality infrastructure, affordable ways to obtain a residence permit and the high standard of living, medicine and education for children.

However, with the influx of foreign companies, there has been a shortage of new modern office centers in Cyprus.

Foreign companies are looking for office space and are ready to rent or buy entire office centers in Cyprus.

In this regard, a large number of new commercial projects from local developers are initiated in the Cyprus real estate market, which are sold out in a matter of days, as:

– buying office space at the initial stage of construction will help you save 30-40% of the final price

– when buying an office at the initial stages, you can make changes to the architectural plan, in accordance with your criteria and goals.

Benefits of buying offices in Cyprus

Now is the perfect time for investors to turn their attention to the growing demand for offices and business centers and invest in a profitable and promising direction.

Buying commercial property in Cyprus is an opportunity to profitably invest in real estate that will not become cheaper and that will bring you passive income.

⇒ Large influx of companies
About 1000 new companies are registered in Cyprus every year. As of the end of 2022, over 220,000 companies were registered in Cyprus.
This data confirms that Cyprus is in demand as a business jurisdiction, and that the need for office space will increase from year to year.

⇒ High demand
In just 6 months of the second half of 2022, new contracts for the lease of office space with a total area of 25,000 sq. m.

⇒ Steady price growth
Demand for office space is growing, but available land is limited. Accordingly, the prices for commercial real estate in Cyprus do not fall, which allows the investor to receive an impressive profit from the subsequent resale and rental (yield rates of about 10% per annum).
In 2022, an increase in prices for office space was recorded in Cyprus. Moreover, prices increased both in the sale and in the lease of office space.

• Cost of offices for sale (EUR per 1 sq. meter)
Limassol — from 4500- 6500
Nicosia – from 3500-4500
Larnaca – from 2000-3500
Paphos – from 1500-2000

• Offices for rent (euro per 1 sq. m per month)
Limassol — from 30 – 40
Nicosia – from 20 – 25
Larnaca — from 15 – 20
Paphos – from 15 – 25

Buying hotel rooms and hotel apartments in Cyprus

Buying hotels or hotel rooms is also one of the most secure investment opportunities, thanks to the opportunity to access properties that are ideally suited for both full-fledged independent living and rental.

The tourist flow to Cyprus is constantly growing and the island has the advantage of a longer tourist season than in most other European countries, which allows the investor to count on passive income all year round.

In 2022, the total tourist flow to Cyprus exceeded the mark of 3 million tourist arrivals. And only in January 2023, 90,549 tourists visited Cyprus, which is 106.1% more compared to the same month in 2022.

Benefits of buying hotel rooms

Upon purchase, hotel rooms and apartments become the property of the buyer (not leasing or long-term rent).

Opportunity to receive a stable income in the amount of 5-7% per year when renting a room.

Own property management and rental service providing a full range of services: from marketing rental properties to renovations, interior design, maintenance of pools and gardens.

Round-the-clock protection and patrolling of the territory is carried out. It is possible to temporarily close the apartments and leave, they will be guarded.

Investments in hotel rooms also offer a buyback option after a certain number of years. This means investors can sell their hotel room back to the developer for a better price.

Buying coworking spaces in Cyprus

Cyprus is becoming an increasingly attractive destination for investment in coworking spaces.

Investing in coworking spaces presents significant prospects, especially as the fintech and innovation sector in Cyprus is booming. In 2022 alone, more than 450 startups were registered, attracting approximately 3.7 billion euros in investment.

This rise in popularity is due to several key factors that make Cyprus attractive to businesses and investors.

The Cyprus tax system provides significant tax advantages for entrepreneurs and companies. This includes low tax rates and a variety of tax incentives, making the island attractive to those looking to reduce their business tax liability.

The island’s quality infrastructure also plays an important role. Cyprus provides high-speed Internet, modern technological solutions and comfortable working conditions. This is especially important for coworking spaces, which need to be well-equipped and functional.

Another advantage for businesses and investors in Cyprus is the availability of residence permit programs for foreigners. This makes the island attractive not only to companies, but also to their employees, who can easily get a job and live on the island.

Investing in coworking spaces in Cyprus promises benefits for both investors and the island itself. This contributes to the development of local businesses, the creation of new jobs and the improvement of infrastructure, making investments in coworking spaces in Cyprus promising and attractive.

Benefits of investing in coworking spaces in Cyprus

Purchasing a coworking space in Cyprus can have several benefits depending on your specific needs and business strategy. Here are some of the possible benefits:

✓ Cyprus is in a strategic location between Europe, Africa and the Middle East. This can be attractive to entrepreneurs and companies that want access to different markets.

✓ If you are not ready to buy real estate, in Cyprus it is possible to rent workspaces in coworking spaces. Also property in Cyprus can be a good investment.

✓ More and more start-ups and innovative companies are emerging in Cyprus. Therefore, investing in co-working spaces in Cyprus can be particularly profitable as entrepreneurs and start-ups are actively developing in the region and there is great potential for creating successful business communities and partnerships.

Purchase of medical centers and clinics in Cyprus

Investing in medical clinics in Cyprus is a unique way to combine health care with commercial real estate. Cyprus, due to its natural beauty and high level of medical services, is becoming increasingly attractive for investment in the healthcare sector.

Cyprus is famous for its pleasant climate and resort facilities, making it a destination for tourists and permanent residents. This creates a constant flow of potential patients for medical institutions, which makes investments in clinics more promising.

The quality of medical services in Cyprus is world class and the island has a reputation for highly qualified specialists and modern equipment. This creates ideal conditions for the development of medical centers, attracting both patients and doctors from all over the world.

With the growing demand for medical services from both local residents and foreign clients, investment in medical clinics in Cyprus provides an opportunity to combine health care with investment potential, creating sustainable and profitable healthcare projects.

Benefits of investing in medical centers in Cyprus

✓ Health is always a priority, and medical clinics in Cyprus can count on stable demand from local residents, as well as foreign residents and tourists.

✓ Cyprus is actively developing its field of medical research, which can help attract investment and innovation in the medical field.

✓ Medical properties, such as clinics, often have a more stable income structure and can be a good part of an investor’s diversified portfolio.

Sale of commercial real estate in Cyprus

Selecting an advantageous location, knowing future trends and the market is the basis for a successful investment in Cyprus!

Our team has extensive experience in consulting on selecting the best commercial and residential projects in Cyprus according to your needs, budget and type of business!

We always cooperate only with proven and reliable developers who have a history in Cyprus, maintain the quality of construction, have all licenses and permits for each new object, they comply with the construction deadlines and the issuance of title deeds.

📌 In addition, we cover a number of important issues:

➡️ Origin of capital and its logistics
➡️ Consulting on selection and verification of real estate, both for personal use and for investment
➡️ Participation in negotiations with the seller about the price, discounts and payments
➡️ Immigration Services
➡️ Corporate and tax planning

Feod Group Services

When considering investment opportunities in Cyprus, especially in the real estate sector, it is important to understand that the legal aspect plays a crucial role in the successful implementation of projects. Here, legal services become an integral part of your path to successful investments.

Our lawyers in Cyprus provide you with comprehensive support and assessment of the legal transparency of the transaction. We conduct a thorough review of documents related to the acquisition of real estate to ensure that all processes comply with local laws and international regulations. This provides you with protection from possible legal problems in the future.

Our services are focused on providing clients with comprehensive legal protection:

Legal verification of real estate

Investment and financial consulting

Providing immigration services

Corporate and tax planning

Setting up companies

Thus, the services of lawyers for investing in Cyprus are not just recommended. They become an essential tool to protect your interests and ensure the successful development of your investment projects on this beautiful Mediterranean island.

Read also:

Commercial property in Cyprus - FAQ

What are the advantages of investing in commercial property in Cyprus?

Investing in commercial property in Cyprus offers a number of benefits, including a stable stream of rental income, potential for property appreciation and the possibility of a variety of investment strategies. Cyprus also provides tax incentives and tax optimization.

What types of commercial property are most popular among investors in Cyprus?

The most popular types of commercial real estate in Cyprus include offices, restaurants, hotels and hotel apartments, and warehouses. The choice depends on the investor’s investment goals and budget.

What factors should you consider when choosing commercial property for investment in Cyprus?

When choosing commercial property in Cyprus, it is important to take into account the location of the property, the forecast of demand in the area, the potential for rental income, the condition of the property and the legal aspects of the transaction. Consulting with experienced real estate agents and lawyers can also be very helpful.

Can an investor buy commercial property in Cyprus for a company?

Yes, an investor can draw up a contract for the sale of residential or commercial real estate for a company that is registered and operates in Cyprus.

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