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Ayia Thekla the Perfect Investment Destination!

The real estate market is always driven by supply and demand which determine property prices. Therefore, for a successful investment one should attempt to predict how supply and demand will change in the future in a specific area and for a specific type of property.

Besides some factors related to the economy in general, supply and demand is greatly affected by some localized factors which could result in the underperformance or the overperformance of a particular investment.

Future supply is, under normal circumstances, easily predictable. A town center cannot expand, therefore, the supply will always be low. Similarly, there will always be low supply of coastal properties. On the other hand, towns can expand towards the inland with no limitations, therefore, there will always be excess supply pressuring property prices downwards.

On the other hand, predicting future demand is more challenging. As a general rule, new infrastructure projects in an area have a positive impact on demand and, therefore, on property prices. This effect is further enhanced if such infrastructure projects will completely change the outlook of an area. For example, the facelift of a square in a town’s center will boost the prices of the surrounding properties. Recent examples are the construction of the Limassol Marina and the facelift of the traditional commercial streets of Nicosia, both of which had huge impacts on the local property markets.

 

The secret to a successful investment is to invest in an area with low supply that also has the potential to attract additional demand in the future.

 

 

The area of Ayia Thekla (please see the satellite image above) presents a perfect example of the above because it combines an extremely low supply of land and a number of significant infrastructure projects which will redefine the whole of the area. In particular:

 

Supply

Supply is limited by regulatory and geographical constraints because the area is enclosed by:

  • the sea in the south;
  • Ayia Napa in the east;
  • the British bases in the west where construction is not possible and
  • the Larnaca – Ayia Napa motorway in the north, behind which the land is agricultural.

In fact, the only land which is suitable for construction is a narrow strip of land along the coast which is roughly 3-4 km long by 500-600m wide. Additionally, apart from the main Ayia Thekla road, most of the remaining road network has not been constructed and since access to a public road is mandatory to issue building permits, most of the undeveloped land in the area is not currently suitable for construction. Therefore, the supply of land is extremely low.

 

New infrastructure

Today, the area is a rather neglected strip of coastal land with a few holiday homes. Soon, however, it will be transformed into a landmark because it will be enclosed between two major infrastructure projects:

  • the state of art Ayia Napa Marina in the east which is under construction (estimated completion: 2020) and
  • the Potamos National Park which is in the tenders stage (estimated completion: 2021). The project includes landscaped banks along the existing seawater river, parks with nature trails, a nature museum and other educational and recreational facilities.

Additionally, the Local Authorities have submitted architectural drawings to the Planning Authority for a permit to landscape the whole of the seafront zone between these two projects. The plans include a footpath along the coast, new beaches, landscaped gardens, piers and small artificial islands.

 

These have, in turn, attracted additional investments in the area, such as:

  • The five-star Sun City Hotel and Spa Resort which is currently under construction (estimated completion: 2020).
  • A landmark project consisting of a five-star hotel (which will be branded and managed by one of the major international hotel operators), a luxury residential project and a high-end private hospital. The project is currently in the design / licensing stage (estimated completion: 2024).
  • 2-3 similar projects which are under study.

 

Therefore, the whole outlook of the area will completely change which should generate a significant increase in demand.

The area is also ideally located, a few minutes away from Ayia Napa (which is currently trying to re-position itself in the upper holiday market segment) and 30 minutes from the Larnaca International Airport. Last, but not least, it attracts both local and foreign purchasers which mitigates risk because the market does not depend exclusively on a specific segments.

 

 

Disclaimer: This document is for general information only and it expresses the views and opinions of its authors which are based on the information available to them today. We, therefore, strongly recommend that you should obtain independent professional advice before making any investment decisions.

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