Retail rentals on Makarios Avenue and Stasikratous in Nicosia have fallen to €20-€25 per square metre, which is €10 cheaper per square metre than Ledra Street, once the poor cousin of what were the two leading shopping hubs in the capital.
A report on property prices for the first six months of 2016, released on Monday by Danos, an alliance member of BNP Paribas Real Estate, showed that retail space on Ledra Street now goes for €30-€35 per square metre.
The report did say however that the lower prices were helping to attract more retailers to the cheaper areas.
At the same time, it said, the economic crisis as well as the tendency of consumers towards malls or department stores had negatively affected the city centres in both Nicosia and Limassol.
“Consumers are now attracted by the more convenient conditions to do their shopping combined with entertainment and fun,” it said.
“The convenience of easy parking, accessible to all climatic conditions, makes a visit to a single spot where one finds shopping entertainment and eating out under one roof make malls the ideal place suitable for all ages.”
This had resulted in a slight decrease in retail market values on average throughout Cyprus of 0.5 per cent.
On office space, the report said that during the first half of 2016, the market in Cyprus demonstrated an upward trend compared to the previous six months.
The purchase of offices and industrial properties rose 1.5 per cent and 1.2 per cent respectively.
“The office market unexpectedly is performing relatively well focusing in the cities of Nicosia and Limassol. Demand is mainly for Grade A office in prime location,” said the report.
Foreign investment, it added, had shown interest in properties that would give a rate of return of between 5.5–7 per cent.
On residential properties, the report said prices in the first six months appeared to recover at an average of 1.5 per cent and 1.2 per cent for houses and flats respectively. The biggest increased in value appear to be in the Famagusta area of 4.1 per cent, and in Paphos, for houses, 5.6 per cent.
The increases, the report said, were a result of the recovery of confidence in the market.
“Although, the transactions for residential properties kept low again during the first six months of 2016, the quantity of deals was higher than the respective period of 2015,” it added.
A positive factor was the stable reduction in unemployment. “However, potential buyers continue to struggle to secure funding from banks in order to purchase properties and this is what keeps the market low in general.”