Yiannis Misirlis: The influx of institutional investors has started to change the real estate landscape

Yiannis Misirlis, Chairman of the Cyprus Property Developers Association (CPDA) and Chairman of Imperio Group, outlines why institutional investors are eyeing the island, why ESG criteria are becoming crucial to the real estate sector, and what’s needed to ensure that Cyprus remains a competitive and future-ready property destination.

In a recent interview with GOLD magazine, Misirlis also talks about how the influx of institutional investors and funds into the real estate market has started to change the landscape in general, and, among other things, to what extent government policies are shaping development trends in the sector.

What is your outlook for the real estate market over the next 12-18 months? Which segments do you expect to experience significant growth?

The real estate sector continues its upward trajectory this year, despite the challenges, while the housing market is set to maintain its momentum as demand is expected to remain high. This assessment is also supported by the European Commission which, in its latest forecast, refers to a continued recovery of purchasing power for home ownership.

The figures of the Department of Lands and Surveys are particularly encouraging for the first quarter of 2025, with sales documents recording an annual increase of 15%. I also believe that a very important opportunity is emerging for Cyprus’ real estate sector as a result of US President Donald Trump’s tariffs, because, amid the uncertain environment created by this development, investors will turn to safer investment destinations that offer stable returns. I believe that in the coming years, increased demand for high-end residences, office space and apartments will continue.

Moreover, mix-used developments, such as houses/apartments with office space, are also gaining more and more ground.

The local real estate market has demonstrated considerable resilience but it is not without its problems. What are the biggest challenges the industry will face this year and beyond?

Geopolitical developments have had a major impact on our industry. However, I am confident that, with proper planning, Cyprus’ real estate sector will be able to deal with any challenges and will remain a key pillar of the economy. Another issue of particular concern is the low supply of housing units, which has led to increasing rental and property prices in most cities.

The measures announced by the Ministry of Interior, as part of the Government’s housing policy, are an encouraging step. However, the results of these measures will only become evident in the long-term. In addition, lengthy licensing procedures delay the development of new projects, something that deters large-scale investment. Steps have also been taken in this regard and we hope they will contribute to solving one of the key issues facing our industry.

Compared to other Mediterranean destinations, how competitive is Cyprus in attracting international clients and institutional investors? What are the country’s key advantages and where do you see vulnerabilities?

Cyprus offers a fairly favourable tax system and a stable political environment, which attracts foreign investment. At the same time, the Cyprus real estate sector has long served as a ‘safe haven’ in times of economic uncertainty and inflation, as it offers investments with a stable future value. It is no coincidence that the local real estate market is experiencing increased demand due to the continuous attraction of investors seeking stable returns and long-term security.

I would not say that there are vulnerabilities but there is room for improvement so that we can maintain our competitiveness – mainly related to adapting to investor trends and preferences. The future of the sector is green and we are glad to see buyers seeking greener buildings. Incentives should be given to industry professionals to create sustainable buildings, as well as to buyers.

The adoption of ESG (Environmental, Social and Governance) criteria is also of great importance for businesses, which should immediately implement these criteria to achieve measurable objectives in social, environmental and governance matters. ESG criteria also contribute to risk management, which enhances investor confidence and business profiles.

The island’s high-end property market is drawing increased attention from institutional investors, private equity funds and family offices. In your experience, how is the influx of institutional capital reshaping the real estate landscape?

The influx of institutional investors and funds into the real estate market has started to change the landscape in general. The market is becoming more competitive, offering opportunities to ‘players’ who can respond to new needs, while those who insist on more traditional models are facing more challenges. As a sector, we are called upon to respond to these needs by demonstrating that we can provide high-quality properties with sustainability certifications and innovative features.

It’s now a year since local government reforms were implemented. What has their impact been on the real estate industry and is there room for further improvement?

The transfer of development permit issuance to the District Local Government Organisations of is a great initiative, which needs to be successful. The decisions taken regarding the simplification of the licensing process for small and medium-sized developments is, without a doubt, a significant step forward. We hope that we will soon see an improvement in licensing for large-scale developments as well. However, more needs to be done to render the licensing environment competitive, such as digitally modernising all services and ensuring better coordination.

To what extent are government policies shaping development trends in the real estate sector?

Government policies are steps in the right direction and they certainly have a positive impact on the property market. Nevertheless, I believe that the right approach to every existing or arising issue requires a comprehensive strategy, with measures that address each issue individually.

This interview first appeared in the May edition of GOLD magazine. Click here to view it.