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Cabinet approves Qatar real estate deal

Cabinet has approved the multimillion Euro deal with Qatar to develop prime real estate in the capital, opening the way for the joint venture to be realised.

GOVERNMENT spokesman Stefanos Stefanou announced the government’s “great satisfaction” over the completion of negotiations with Qatar, after months of back and forth, contested land valuations and a fair amount of criticism from opposition parties.

Three months ago, sources close to the negotiations told the Cyprus Mail that the two sides looked far from a deal, following the turmoil in the Arab world. Troubles in Egypt, Libya and Bahrain, Qatar’s close neighbour created major upset and uncertainty in all Arab governments, making the prospect of agreement slim.

However, yesterday’s cabinet approval of the deal agreed last week with Qatar opens the door for the joint venture to develop luxury real estate opposite the Hilton hotel in Nicosia.

According to Stefanou, a six-member council comprising three members from each country will run the venture. The three Cypriot members are former finance minister Christos Mavrellis, Andreas Pittas and Pambos Papageorgiou. Mavrellis will be president of the company.

“The investment includes construction of a luxury hotel, apartments, shops and offices which will be available to Cypriot and foreign investors. This form of mixed investment is based on successful international models that increase the value of the investment,” he said.

“The Qatari investment is a vote of confidence in the Cypriot economy which opens up great prospects. It directly strengthens the economy by pouring money into state coffers, giving new impetus to growth, creating hundreds of new jobs, upgrading and enriching the tourist product of Nicosia and of all free Cyprus, opening up huge possibilities for new investments in Cyprus from Qatar and other countries,” he added.

Stefanou refused to be drawn into the details of the deal, saying only that Qatar will contribute directly by paying money for the land earmarked for development and through the sale of properties built on it.

“Through the formula we have reached in the agreement, the value of the land as it has been evaluated will be fully covered and more.”

The formula discussed by the two sides before final agreement was reached centred on the government offering the state-owned land at a value of €50 million, instead of €145 million as it had been valued by the Land Registry Office and €135 million by a private land surveyor appointed by the state. In return, Cyprus could pocket any profits above the reference price the Qataris believe the completed real estate could sell for.

Stefanou noted that Qatar was one of the biggest investors in the world at the moment. Its investment in Cyprus would open up prospects for new investments and for the economy.

“This agreement opens opportunities for Qatar to be a very significant economic partner of Cyprus. It’s already known that relations between Cyprus and Qatar are developing rapidly,” he said.

He added that the next step was to start work on construction as soon as possible.

Asked whether the timing of the announcement had anything to do with Sunday’s election, Stefanou said the two sides only reached the final stage last week when the finance minister visited Qatar and completed negotiations. The three council members then had to be informed before cabinet could give the final nod.

Opposition DISY wasted no time in releasing a statement noting that the government announced unilaterally that a deal had been reached on the eve of elections.

“Citizens can decide whether there are electoral expediencies here. Universal practice teaches us that agreements are only brought into effect with the signature of both parties,” said the DISY statement.

Stefanou responded with a stinger: “Even at the end of the election period, DISY continues to distort reality and misinform. The agreement between Cyprus and Qatar has been signed by both sides and is final. Everything else DISY says belongs in the realm of fantasy.”

Readers' comments

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  • Maria gillespie says:

    Why are new builds being erected when, so many have been abandoned, could they not be Utilized. I know lots of investors whom now are having to get rid of their properties because of the economy. And also their own cash crisis. Why build more when so many are lying empty it does not make sense, who is going to invest now?

    Regards M Gillespie

  • @dimitri – I published an article about plans for new shopping malls last December – see http://www.news.cyprus-property-buyers.com/2010/12/02/plans-for-new-shopping-malls-in-cyprus/id=006299

  • dimitri says:

    off topic sorry, I heard something about the building of a new mall in Paphos near the tombs of the kings, Aristo developers and another will build it, any truth to this?

  • dimitri says:

    thanks Nigel…..interesting times

  • CAB says:

    I see the land registry was spot on again in a falling market?

  • @dimitri – The government appointed the firm of Antonis Loizou & Associates Ltd to value the land. I believe that the Land Registry valued it at €143 million and another valuer valued it at €155 million, while the Qataris valued the land at €50 million.

    I assume that a compromise has been reached to secure the deal.

  • dimitri says:

    What valuation did the Qataris get? and by whom?

  • Peter says:

    Word of advice to Qatar. Make sure you get the title deeds to the land BEFORE you start building

  • The views expressed in readers' comments are not necessarily shared by the Cyprus Property News.

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