09
09.2024
In recent years, Larnaca, traditionally known as a tourist destination, has rapidly emerged as a key attraction for investment projects in Cyprus. Thanks to the city’s unique advantages and the efforts of local authorities, Larnaca is beginning to outpace cities like Limassol, Nicosia, and Paphos, offering new opportunities for foreign investors.
In this article, we will explore why investing in Larnaca is becoming an increasingly profitable decision and the benefits awaiting those considering investment projects in Cyprus.
Factor 1: Larnaca’s Infrastructure Development
One of the main drivers of investment in Larnaca is the city’s active infrastructure development. The local administration has launched around 15 new projects aimed at improving the city’s transport network, making key commercial and tourist areas more accessible. These plans include dedicated bus lanes, bike paths, and the construction of modern educational and medical facilities.
Larnaca’s mayor, Andreas Vyras, has also announced the creation of new green spaces and parks in the city center, which will not only enhance residents’ quality of life but also attract new investments to the area.
In addition, the mayor mentioned plans for a new cultural center along the Larnaca-Dhekelia road and the redevelopment of the Mackenzie area. Other initiatives under consideration include the construction of a photovoltaic park, the renovation of urban cultural spaces, and the establishment of the Larnaca Folk Museum.
Together with upgrades to the water supply systems and the expansion of public spaces, these developments make Larnaca a prime destination for long-term investment projects in Cyprus.
Factor 2: Affordable Property and Land Prices
One of the key advantages for investors in Larnaca is the availability of affordable housing and land at competitive prices. Unlike Limassol and Paphos, Larnaca offers more opportunities for developing new projects with lower initial costs.
To better understand the differences in property prices, let’s compare the cost of 1-bedroom apartments in three popular areas for living, leisure, and business in Cyprus:
- Limassol, Neapolis Area: A 1-bedroom apartment here costs €790,000 for a 75 m² space (€10,533/m²). Neapolis is one of Limassol’s most prestigious areas, attracting both locals and foreign investors. Located near the sea, it boasts modern residential complexes, commercial centers, restaurants, and cafes. The high price is due to the limited availability of land for development.
- Paphos, Kato Paphos Area: A 1-bedroom apartment is priced at €365,000 for a 61 m² space (€5,984/m²). Kato Paphos is a coastal area that combines cultural attractions, modern hotels, and tourist complexes.
- Larnaca, Mackenzie Area: Here, a 1-bedroom apartment costs only €215,000 for a 63 m² space (€3,413/m²). Mackenzie is one of Larnaca’s fastest-growing coastal districts, known for its sandy beaches and well-developed infrastructure. It’s ideal for those seeking affordable beachfront property without compromising on quality.
When comparing the prices and size of 1-bedroom apartments in coastal areas of Cyprus, Larnaca stands out as the most affordable option for investors. You can purchase a larger apartment at a significantly lower price than in other major cities of Cyprus, making Larnaca an ideal destination for those seeking a balanced combination of price, quality, and future growth potential.
Moreover, Larnaca offers a wider range of available land options. Comparing land prices across Cyprus cities, Larnaca once again stands out for its affordability:
| City | Area | Land Size | Price |
| Limassol | Kapsalos | 607 m² | €650,000 |
| Paphos | Geroskipou | 587 m² | €200,000 |
| Larnaca | Aradippou | 626 m² | €135,000 |
As shown, Larnaca clearly offers the best value in terms of both price and land size compared to Limassol and Paphos. For €135,000, you can acquire a 626 m² plot, the largest and most affordable option. In Limassol, a smaller plot costs over four times as much. Even in Paphos, the cost of a smaller plot is higher than in Larnaca.
Factor 3: Influx of International Companies to Larnaca
Business in Larnaca is thriving, driven by the growing number of international companies choosing the city as their base of operations. This influx of new businesses is stimulating the development of the local business infrastructure, including new office buildings and commercial centers.
In recent years, Larnaca has attracted attention from sectors such as technology, financial services, and trade. A prime example is the opening of a regional office by the major IT company DataArt, headquartered in New York. Currently, DataArt employs over 6,000 professionals worldwide. According to the head of DataArt Cyprus, “It is crucial for a global software outsourcing company to have a presence in Cyprus, a country strategically located at the crossroads of three continents: Europe, Asia, and Africa.”
Factor 4: Investment Returns in Larnaca
Another advantage of Larnaca is its high investment returns.
With property prices in Larnaca on average at least 50% lower than in Limassol and 30-40% lower than in Paphos, investors can significantly reduce initial costs and increase potential returns. For example, the average rental yield in Larnaca is 7-10%, compared to 5-7% in Limassol.
Investors can take advantage of low property prices and rising demand, particularly for residential and commercial properties. This opens opportunities for higher rental income, especially in tourist areas, making Larnaca an attractive option for those seeking steady rental returns.
Larnaca offers strong capital growth potential and stable profits, making it an ideal location for long-term investments, particularly in the dynamic real estate market of Cyprus.
Factor 5: Tourism as a Driving Force of Economic Growth
The city is also actively developing its tourism industry, drawing the attention of investors in this sector. In the first six months of 2024, Larnaca welcomed over 700,000 tourists, a 15% increase compared to the same period in 2023. This growth in tourism is driving the expansion of the hospitality industry and the development of new tourist attractions, offering additional investment opportunities in Larnaca.
Unlike Limassol, where the tourism sector is already saturated and requires significant investment to enter the market, Larnaca presents more opportunities for new projects. Nicosia, with its primarily business focus, lacks the same tourism potential as Larnaca.
Investors targeting tourism see Larnaca as a promising market with considerable development potential.
Larnaca – Investment Opportunities
Larnaca is rapidly transforming into one of the most attractive regions for investors in Cyprus.
The development of infrastructure, affordable real estate and land, the influx of international companies, the growth of the tourism sector, and high investment returns make this city an ideal location for various business ventures.
Contact our experts at Feod Group to learn more about why investing in Larnaca is a smart choice and how you can take advantage of these opportunities for long-term growth and profit.
Feod Group offers a comprehensive range of services, including:
- Assistance with company formation, trusts, and funds in Cyprus
- Investment consultancy and help in acquiring businesses
- Tax planning and optimization services
- Development of personalized investment strategies in Cyprus
- Legal assistance with obtaining immigration statuses in Cyprus
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FAQ
Larnaca attracts investors due to its active infrastructure development, affordable real estate and land prices, and the influx of international companies. The city offers long-term investment prospects with high returns.
The average rental yield for residential property in Larnaca is 7-10%.
Larnaca appeals to investors with its more affordable property prices than in other major cities in Cyprus, such as Limassol and Paphos. For example, a one-bedroom apartment in the popular coastal area of Mackenzie can be purchased for €215,000, while a similar property in Limassol’s Neapolis area would cost €790,000, and around €365,000 in Kato Paphos. This makes Larnaca a more cost-effective option for investors looking to minimize initial investment while maximizing returns.
Investors in Larnaca show interest in both residential and commercial properties. High demand for apartments in coastal areas ensures stable rental income, while commercial properties, particularly office spaces and retail units, are increasingly sought after due to the influx of international companies.
With the active development of infrastructure and the arrival of international companies, property prices in Larnaca are expected to rise, creating excellent capital growth opportunities for investors.
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