By Antonis Loizou*
The casino is here, dear readers, and the location is Zakaki village on the western outskirts of Limassol. These, together with the adjoining Asomatos and other immediate villages, have been so far considered to be the lowest income residential area of the town.
As announced, the project will comprise of a 5-star (plus) hotel of 500-bedroom capacity (the largest in Cyprus), plus a conference area of around 6,000 sq.mts., plus the other facilities to go.
Addressing the lack of such a large conference hall will not only supplement the casino’s activities, but will also furnish Limassol with a commercial venue capable of accommodating very large international summits and events. In addition – fingers crossed that it will happen – the Lanitis group has obtained a licence to build an international 18-hole golf course and villas for sale next door to the casino. So, the project is, indeed, as a whole, similar to that of Las Vegas, to be run by an international casino operator with a wealth of experience and qualified staff to make it a success.
There is plenty of vacant development land and plots to accommodate any increase in demand, expected mainly to support the casino’s completion in 2020. Is it time, then, to invest in such plots, in order to cash in on the expected demand that will follow? Today, land in the immediate area that is capable of apartment and individual housing development costs around €200-€220/sq.m. (and even less). Bearing in mind the new connection with China and the keen love of gambling of our neighbour countries, as well as the visa/passport scheme, the parameters for such development are evident.
Perhaps it is also time to contact the casino operator to provide staff accommodation (estimated at 4,000 working on-site) in a development and lease deal. Bearing in mind Limassol’s towers/seaside projects now sell at €7,000-€8,000/sq.m. (not on the beach) we expect local sales prices in this area will be much higher than the prevailing ones for apartments (€1,200/sq.m.) and houses on individual half plots (€2,000/sq.m.). Also, nearby locations such as Erimi and Kolossi villages, with a large volume of supply, are additionally expected to benefit. This will, of course, help My Mall and the various restaurants in the neighbourhood, too. Thus, one project will turn a depressed area into a medium-class one, but it will take some time, say, till 2025, to see the benefits of the casino, post operation, by which time we expect an increase in sales prices by at least 20%-30% over the next three to four years.
There are some present drawbacks to take into account, such as the never-ending flies, since it would only take a few reports to give the project a bad name. Then there’s the less-than-optimal access. Although road works are under way to connect the Limassol-Nicosia motorway with the wider area, we are not aware of any infrastructural plans leading directly to the project site. Additionally, part of the villages described fall within the Sovereign Base Areas, for which sale of real estate is subject to restrictions (basically limiting it to locals), so this issue would need to be examined with the SBA authorities. The immediate neighbourhood is also known for illegal gambling. Surely the casino operator has the know-how and experience to handle such matters and much will depend on the competence of the local police. (However, if we look back on recent events where there was a close “cooperation” between criminals and law officers, this is not encouraging).
The casino is expected to have an upgraded food court and we understand some of the restaurants may have a Michelin-star quality. This is, of course, good news, since, in Cyprus, we do not have this restaurant standard so far. Regarding the prices of such establishments, and if we take Mykonos as an example, the average good quality restaurants charge around €150 per person, taking into account the lowest-priced local wine (€35/bottle). Yet the cost can reach up to €11,000/bottle, with the corresponding establishments being nonetheless fully booked. As for equivalent costs at Limassol’s old port – they are around €100 per person. So, why not a charge of €300 per person for a Michelin experience? Certainly, based on our own experience so far, there are people locally who are prepared to venture into such luxury. (As a side note – a reader of this column, who was kind enough to inform us of such charges abroad, criticised us for setting the rents for the old port – which we carried out on behalf of the Port Authority – implying we are to blame for the high charges!) Given that an ordinary plate of shrimp costs €7, while a kebab portion is about €10 and local restaurants are still doing very well, there is room for further “improvement” in charges.
Ultimately, a casino, dear readers, “never loses”, and there are always players of all kinds who do not particularly care about the charges and, by projection, we hope, do not pay particular attention to future property prices in the immediate region.
Good luck to Cyprus and, of course, to Limassol (again).
*Antonis Loizou & Associates LTD property valuers and property consultants