George Chrysochos: Interest from institutional capital is transforming the character of the real estate market

George Chrysochos, Executive Director of Cyfield Group, is upbeat about the future of the Cyprus property market but he stresses the urgent need for local and national authorities to deal with the longstanding challenges of eliminating bureaucracy, modernising infrastructure and implementing more transparent governance.

In a recent interview with GOLD magazine, he also talks about, among other things, how competitive Cyprus is in attracting international clients and institutional investors compared to other Mediterranean countries.

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 market in Cyprus is expected to remain resilient and continue growing steadily over the next two years. We anticipate a period of relative stability in property prices, driven by the increased availability of new residential units currently under construction. This will not affect demand, which remains strong, especially in key urban areas like Nicosia, Limassol and Larnaca.

In the residential sector, interest from both local and international buyers is likely to remain high, supported by a favourable financing environment and the growing appeal of Cyprus as a relocation destination. The commercial real estate market is also showing positive momentum, particularly in high-spec office spaces and mixed-use buildings that serve the growing population of professionals relocating to Cyprus.

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?

There are three persistent challenges that developers in Cyprus must address in the coming years. First is the shortage of skilled labour across several sectors, especially in construction. Without immediate measures – such as streamlining the employment of third-country nationals or integrating international students into the workforce – project timelines will continue to be affected.

Second is bureaucracy. Despite improvements, the procedures for obtaining building and planning permits remain slow and often unpredictable. A faster, digitalised licensing system would go a long way in improving project delivery times and investment certainty.

Third, while inflation has stabilised, construction costs remain high. Developers are required to maintain quality while keeping projects economically viable, which means working with greater efficiency and smarter planning. At Cyfield, our vertically integrated structure helps mitigate this but it remains a pressing issue industry-wide.

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 is a highly competitive destination. It offers a stable business environment, a favourable tax regime, EU membership and a high quality of life. Its strategic location at the crossroads of three continents is another major advantage, especially for companies seeking access to European, Middle Eastern and North African markets. That said, our vulnerabilities lie primarily in bureaucratic delays and the pace of public sector reform. While the private sector has shown significant agility and innovation, the administrative framework still needs modernisation to support large-scale investment. Faster permit processing, a more efficient legal system and upgraded infrastructure are critical for maintaining our competitive edge.

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?

We’ve seen a clear increase in interest from institutional capital, particularly in high-rise projects, premium residential buildings and commercial hubs in urban centres. This trend is gradually transforming the character of the market: bringing in higher standards, demanding better governance and accelerating the professionalisation of the industry. Institutional investors are also helping diversify the market. Projects that meet their criteria for sustainability, long-term return and transparency are gaining ground. This shift raises the bar for all stakeholders and opens up new possibilities for larger and more complex developments in Cyprus.

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 reform of local government, with the establishment of the District Local Government Organisations, is a long overdue step in the right direction. By consolidating administrative functions, it aims to improve efficiency, accountability and service delivery. However, the transition period has presented a lot of challenges, particularly around licensing and coordination among authorities.

To build on the reform’s foundations, I would suggest more clearly defined responsibilities and the accelerated digitalisation of all services provided. The real estate and construction sectors rely heavily on an efficient public administration. A predictable and streamlined permit process, in particular, would greatly enhance investor confidence.

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

Government policies continue to play a crucial role in shaping the market. Headquartering, residency programmes and tax incentives for foreign investors and companies have historically attracted international interest.

At the same time, the focus is now shifting towards long-term value creation through sustainable development and infrastructure improvements. The introduction of fast-track permits for strategic projects has helped but there’s still room to expand and simplify these frameworks. Green building incentives are becoming more important as developers move towards environmentally responsible construction. However, for these to have a real impact, they must be substantial, well-structured and effectively implemented. The build-to-rent sector, which applies primarily to organisations with a massive workforce from abroad, such as IT or Forex companies, is a game changer in attracting foreign talent by providing lower-cost accommodation and solving the housing availability issue. This incoming talent will further boost both the real estate sector and the economy.

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