How investors and land developers view the Build to Rent scheme

Amid a shortage of affordable housing and rising property and rental prices in Cyprus, Build to Rent (BTR) schemes are providing options for long-term rental contracts and professional management by owners or property managers.

These schemes involve homes built specifically for rent rather than sale and are residences which attract tenants due to their modern and community-friendly design and the high quality services they offer.

The BTR option helps address the housing problem and is an attractive option for investors looking for long-term returns.

Industry professionals recently discussed this new approach to real estate development, reaching interesting conclusions.

The discussion took place on stage at the 18th Land Development, Design and Construction Conference and Exhibition presented by Altia and held at the Hilton Nicosia Hotel on 27 March.

The panel consisted of Yiangos Zenonos, Community & Public Affairs Manager at Exness, Nicolas Karoullas, Member of the Board of Directors of the Cyprus Land & Building Developers Association (LBDA) and CEO of Karma Developers, Lefteris Constantinou, Member of the Board of Directors of LBDA and General Manager of bbf:, Andy Hadjiadamou, Member of the Board of Directors of LBDA and CEO of Domo Properties, Markos Christodoulou, Vice Chairman of LBDA and Partner / Sales Director of Quality Group.

Karoullas, after mentioning that the scheme has been operating in Europe since the 1980s and has since been an important part of the market in some of its countries, stated that it is divided into two pillars.

One concerns investors and the other concerns state policy. To develop a residential complex based on the scheme, a long-term plan is needed, he commented.

Karoullas also described the free Famagusta district as a tourist destination par excellence but with a significant staffing problem.

"Considering the increase in the operating costs of businesses, staff housing raises the cost even more and with this scheme, with some restructuring, maybe the situation will improve," he suggested.

On his part, Constantinou said that it would be a good idea to see if there have been applications and regularly monitor who was submitting them, so that the scheme could be adjusted according to demand. "It needs to be improved," he commented.

Constantinou suggested it be revised to include more pieces of land. The reduction of the VAT rate is an important measure, he noted, but an incentive would also be giving a premium to someone who wants to rent for more years.

Zenonos pointed out that the issue does not only concern social groups with low incomes, but also middle-class families who are finding it difficult to cope with high rental costs.

"As investors, we have analysed the scheme, and there is room for improvement in terms of parking spaces, etc. We have run various projects and we see an improvement in returns, but the improvement is not satisfactory", he said, adding that VAT is an issue that requires improvement, as far as the reduced rate for the first residence is concerned.

Hadjiadamou noted that the new generation of tenants want to live in a place where they can work. He talked about the need to create such a product collectively and how this will help correct prices.

In Cyprus, a holistic approach is needed, one that will take into account all parameters, he said, and added that it is necessary to introduce programmes that will make the product attractive to large projects, whether through land outside the city and abandoned buildings, etc.

He also talked about the creation of micro living spaces.

Christodoulou particularly focused on the lack of adequate parking spaces, which creates a problem during the permit process.

He also commented on the issue of foreign investors for whom renting is not attractive enough at the moment, warning that when they have greater profits (return of investment) abroad they will certainly prefer other countries.

However, he added, "We are on the right track," adding that the position may be differentiated in some places.

The moderator of the panel was Yiannis Misirlis, Chairman of LBDA and Founding Director of the Imperio Group.

(Source: InBusinessNews)

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