TOMORROW SCARES THE DEVELOPERS

 Filenews 25 October 2020 - by Theano Thiopoulou

They are trying to measure the cost of the real estate industry by abolishing the investment program and deciding how to manage it the next day. Entrepreneurs, following the government's decisions last week to put an end to the naturalized project and the Commission's decision to launch infringement proceedings against Cyprus and Malta, are in a state of deep concern.

On the one hand, they have to manage their investment plans, which are meteors because of the abolition of "golden passports" from 1 November and on the other hand they have to find solutions for their clients who have not secured all the documents and their applications are pending.

Especially for entrepreneurs whose development plans are mainly based on the sale of luxury properties to foreigners, in exchange for the Cypriot passport, the situation is more difficult. "F" spoke to entrepreneurs who know this market very well and gave them the opportunity to raise their concerns about the political decisions taken.

Elias Iliadis (Pfilia): We lost our minds

The managing director of the company Pfilia, commenting on the situation, clarified that "corruption and investment projects are different. It is unfair, with all this situation that has been created, the cost of paying the right professionals. It is unfair for all entrepreneurs to be considered fraudsters, as are all their clients. Our customers have been chosen and we are making a great effort in this area. With this whole situation, we've lost our minds and we've had enough. To a large extent we will all be affected. I think those entrepreneurs who say they're not affected, don't tell the truth and don't describe the real situation. Now we're trying to figure out what's going on, we're professionals and we can't make decisions in cold blood. We want a reasonable time to assess the situation and see how we go further. In general, the real estate sector will affect the economy, which is currently also being tested by the effects of the coronavirus pandemic. What we should do as Cyprus was try to fix the flaws in the programme and not abolish it."

Michalis Hatzipanagiotou (Cybarco): We need incentives immediately

The managing director of Cybarco, which is a member of the Lanitis Group, says that "the Cyprus Investment Programme has made a huge contribution to Cyprus' exit from the 2013 financial crisis. According to the study by Ernst and Young Cyprus (EY), which assessed the effects of JEP on the Cypriot economy for the period 2013-2018, the total amount of its direct and indirect contribution is estimated at between €7.6 billion and €9.7 billion. It has also created around 10,000 jobs and contributes to the continuous employment of more than 40,000 workers in the wider construction sector. Undoubtedly, the abolition of the programme will affect not only the construction industry but the economy of the country in general, especially at this critical juncture, with the heavy blow it has received from the Covid-19 coronavirus pandemic. The program acted as an additional incentive for the buyer, who has countless options. In order to continue to attract foreign investors to Cyprus, we need incentives immediately, which we expect from the state to support the construction industry. Cybarco is a member of the Lanitis Group, with a successful course of more than 75 years. With its consistent policy and its timeless reliability towards its customers, despite the projected decline in the sector, it aims at the moment to respond to its existing buyers, for the timely completion and delivery of our projects".

George Chrysochos (Cyfield): Extend unfinished applications

The cyfield group's executive director points out that "the interruption of the project will affect developers who are directly exposed to luxury properties related to the granting of Cypriot passports. We as a company are not very exposed, but it was a decision that was suddenly made. Some of the developers will face serious problems and it is not out of the question that we will see 2013 scenarios in the economy. Let us not overlook the fact that the construction sector has a contribution to GDP of around 20%. Just that the program was cut so suddenly causes big problems. Imagine a customer who has deposited €2.5 million, has 10 days to make the application and send the required documents. What we are asking for is a reasonable extension of time for existing purchases by investors. It is not enough that we have once lost our credibility as a country, we are coming for the second time to lose it and fool the customers. There are investors who want their money back and embark on serious adventures. Investors do not have time to complete the applications with the sudden suspension of the program. What we are asking the Home Office is for it to accept some incomplete applications and if a document is missing an extension will be granted for investors to bring in. We are not asking for the programme to be extended, but for a short period of time to be given so that existing acts are not lost. We will try to adapt to today's situation, but let the authorities help us."

Michalis Zavos Group: The economy will have serious problems

The first executive director of the Zavos Group of companies argued that "it is a hasty decision to discontinue the project, which is causing major problems. What needs to be done now, in the first instance, is to allow applications to be submitted and then the government to consider the applications. There are investors who have already paid their advance on the basis of the existing plan, which is much stricter and more documents are needed, but due to the problems of the Covid-19 they have not yet been able to secure them. There is a risk that some investors will take legal action against Cyprus if we tell them that within ten days we have decided that you will have to file all your documents. It was the interior minister himself who said, a month ago, that the programme was armored and credible and then decided to abolish it. The next day will be tragic if there isn't another plan. We had a product based on a specific clientele, and on that we sewed a suit. The product we have made is addressed to specific customers. Now we won't be able to sell the properties and they'll stay pretty unwell. We've lost our credibility. Since the end of the project, jobs are lost, projects that are in the works and new ones will not start. The economy will have a serious problem and I wonder in the midst of a crown how the government will cope with problems in the construction industry and a credibility in very bad messes."

I. Aristodimou: A solution must be found

The chairman of the company's board of directors (Aristo Developers) explained that "the decision to abolish passports will bring significant problems for the construction industry and the survival of dozens of professions, with an impact on workers as well as banks. It is expected that there will be an impact on bank accounts and serious problems for the survival of dozens of businesses. At the moment we have a lot of properties to meet the demand for passports and it must be borne in mind that it took a long time to prepare for these projects until we moved on to the project licensing process. We don't know where the properties left at the end of the naturalization program can be disposed of. The shock to the economy is difficult to predict and if there is no solution there will be serious problems for the local economy. It is unfair to say that some ten people have benefited from the Cyprus passport programme. Thousands of people involved in the construction industry have benefited from the project."