Demand for modern office spaces in Cyprus, particularly in Limassol, remains strong in 2024, as companies pursue energy-efficient buildings, according to a report released on Monday from property consultants Danos.
The company reported that office prices continue to rise, despite an increase in supply, following a significant low in early 2022 with rents now approximately 14 per cent higher.
Cyprus’ commercial property market is proving highly attractive to international companies, enticed by the island’s superior quality of life, strategic location, and appealing tax incentives.
However, there remains an evident shortage of contemporary commercial properties, as many of the existing buildings are now considered outdated.
This gap has initiated urgent calls for the development of new, energy-efficient facilities, necessitating a collaborative effort from both stakeholders and the government.
The report added that the demand for Grade A office spaces is expected to persist, boosted by Cyprus’ recovery from the pandemic and an uptick in foreign investment.
It should be noted that Grade A refers to office space constructed to the highest standards in functionality, design, onsite amenities, and location.
These offices tend to be designed in such a way so as to meet the needs of high-end companies seeking premium workspaces that enhance their brand image and maximise productivity.
Moreover, this sustained demand has led to a notable increase in office rental rates, which have risen nationally by 8.5 per cent in the first quarter of 2024, compared to the same period in 2023, marking a 10 per cent rise since 2019.
Leading the charge, Limassol now sees rents ranging from €25 to €50 per square metre, a climb from the previous €20 to €45.
Additionally, rental prices in Larnaca have nearly doubled to €15-€20 per sqm, up from last year’s €8-€12.
Nicosia is witnessing similar trends, with rents increasing to €15-€30 per sqm from €12-€23 last year.
What is more, both Famagusta and Paphos have seen substantial rent hikes, indicative of a broader nationwide trend—with Famagusta rents climbing from €5-€12 per sqm to €10-€15 per sqm in 2024, and Paphos rents rising to €10-€15 per sqm from €7-€10.
While the purchase prices for office spaces have largely remained stable in early 2024, there have been noticeable increases in areas like Larnaca and Famagusta.
Limassol continues to dominate the highest prices, with costs ranging from €5,000 to €6,000 per sqm.
Meanwhile, prices in Nicosia remain relatively steady at between €3,000 and €4,500 per sqm.
Office sales prices in Larnaca have surged to €2,500-€3,500 per sqm from €2,000-€3,000 in 2023.
In Famagusta, prices have increased to €2,000-€2,500 per sqm from last year’s €1,500-€2,000.
Finally, Paphos continues to reflect strong demand for prime office spaces with high price levels at around €2,500 per sqm.
