Cyprus Property News

Investment Funds growth during pandemic

Investment Funds growth during pandemic

Τhe Investment Funds sector in Cyprus was significantly strengthened during 2021, even though the consequences of the pandemic and the uncertainty continued, according to the Cyprus Investment Funds Association (CIFA).

The sector is now established as one of the most promising of the Cypriot economy and one of the fastest growing at a European level.

Assets under Management (AuM) of Cypriot investment funds amounted to €11.6 billion at the end of the third quarter of 2021, proving that Cyprus continues to be one of the fastest growing destinations for investment organizations and their managers. On an annual basis, and during pandemic conditions, AuM increased by 48.7%.

The country’s recognisability is now clear from the very investment organizations that choose Cyprus as their base. In recent years, dozens of fund managers, from various geographical areas, have chosen Cyprus recognizing the remarkable advantages it offers as a destination. According to the Cyprus Securities and Exchange Commission (CySEC), the total number of licensed Management Companies and Undertakings of Collective Investments amounted to 298 at the end of the 2021 quarter, which implies an annual increase of 9.1%.

The Cyprus Investment Funds Association (CIFA) expresses its satisfaction with the sector’s course and believes that its upward but sustainable growth will continue in 2022. CIFA, responding to the positive developments and the tangible interest it observes, will continue to implement its strategic promotion plan, while setting advanced and realistic goals.

According to a statement, continuous upgrades and modernization of the legislative and tax framework that governs Collective Investments make Cyprus have nothing to envy from other European destinations. On the contrary, the cost of establishment and operation of these organizations is much lower in Cyprus compared to other competing EU destinations. It consists of no coincidence that, according to data from the European Fund and Asset Management Association (EFAMA), 47% of the Cypriot Investment Funds net assets were related to cross-border investments in 2020. This ranks Cyprus fourth in Europe, with Ireland, Luxembourg, and Malta the only European countries ahead.

At the same time, the sector has a significant contribution to the recovery of the Cypriot economy. Approximately 140 collective investment organizations invest in Cyprus in part or fully, with the full amount reaching to €2.3 billion at the end of the third quarter of 2021 (19.5% of total AuM).

What the professionals of the sector are eager to see materialising in the new year, is the enactment of the legislation that will govern the supervision and regulation of the fund administration services profession. This development will complete the legal framework of the sector, providing an additional level of security to both investors and the managers themselves. At the same time, the international developments in the investment sector are constantly evaluated and the Association submits suggestions and improvement proposals where necessary.

“During the new year ahead, we will continue our targeted actions to extend the promotion of the sector abroad, in specific markets which present concrete prospects. The Cypriot Investment Funds’ assets have already approached €12 billion, under adverse conditions, and this makes us very confident that with correct and stable steps we will achieve the medium-term goal we have set: to raise the assets of the Funds in Cyprus to €25 billion’, comments CIFA’s President, Andreas Yiasemides’. ‘Furthermore, it satisfies.


Pledge on a shares certificate

Pledge on a shares certificate

The creation and registration of a pledge over a certificate of a company’s shares in favour of a creditor-pledgee constitutes a form of security provided for the repayment of a debt or the fulfilment of a promise. This type of security is valid provided that its terms are evidenced in writing under a share pledge agreement signed by the pledgor–debtor in the presence of two witnesses who countersign the document. Upon the creation of the pledge, the pledgee is required to bring this to the attention of the company through a notice, supported by a certified copy of the pledge agreement. Then, the company registers the pledge in the its registry of members against the encumbered shares and provides the pledgee with a certificate. Registration of the pledge with the Registrar of Companies is not mandatory, but is highly recommended for the public and any interested party to be made aware that the shares in issue are pledged in favour of a creditor.

A company’s share certificates may be pledged in favour of more than one creditor, enjoying the same rank of priority and the relevant certificate issued by the Registrar of Companies indicates the nature of the charge and its beneficiaries. The pledge agreement is stamped and may refer or apply to all the shares of a company or only a part of them; however, the non-stamping of the agreement does not make it invalid.

The agreement determines instances which constitute events of default, in the occurrence of which the pledgee is entitled to gain ownership or liquidate the shares covered by the pledge in order to repay the outstanding debt. Before proceeding with the sale of the shares, the pledgee is obliged to notify the pledgor in writing of the default and call for payment of the debt or fulfilment of the promise undertaken within the deadline specified in the notice, stating that in the event of failure to comply, the pledgee will proceed with the sale. When the pledgee proceeds with the sale, they have a duty towards the pledgor under the laws of equity to act in good faith and secure the best possible price.

A valuation should be undertaken before the sale and the pledgee must notify the pledgor of this, to prove that the pledgee acted with due care and diligence, treated the pledgor fairly and took all the necessary steps to secure the price. By doing so, the pledgee is considered to have fulfilled their duty of care towards the pledgor and is released from any obligation or liability. If the sale of the shares is not possible without a court order, such an order must be obtained prior to sale. The law explicitly provides that if there is no provision to the contrary, the pledgee has the same rights and remedies against third parties as the pledgor would have in the absence of the agreement. Moreover, any payment made to the pledgee by a third party by virtue of the pledge is valid, as if it was made to the pledgor.

Despite the existence and registration of the pledge, for as long as no event of default occurs or continues to exist, the pledgor is entitled to exercise their voting rights and powers arising from ownership, including the right to receive dividends and increase the number of shares pledged, except the right to sell, transfer, assign, charge, pledge or burden them. The pledgor has no right to vote for a resolution that will affect the rights of the pledgee or is inconsistent with the terms of the agreement. The share pledge agreement usually defines the pledgee’s rights in the occurrence of an event of default, including voting rights, the right to collect dividends, the right to sell the shares, the right to be released from any liability regarding the sale of the shares and the right to choose the timing of their sale, as well as the right to use the sale proceeds for the payment of the costs of the sale, then the balance of the outstanding debt secured by the pledge and if any balance is left, that should be paid to the pledgor.


George Coucounis is a lawyer practicing in Larnaca and is the founder of George Coucounis LLC, Advocates & Legal Consultants, [email protected]

Nicosia property sales hit €3.3bn in last 5 years

Nicosia property sales hit €3.3bn in last 5 years

Property sales across four major Nicosia municipalities exceeded €3.3 billion in value over the past five years, a report from independent real estate asset management and advisory firm WiRE has shown. The report concerns property sales that took place in the Nicosia, Strovolos, Engomi, and Lakatamia municipalities, with WiRE noting that the value of property sales is comparatively low when population was factored in. “The share of the real estate market in the Nicosia district is limited, despite being the most populated district,” the company said, adding that a similar report on three major Limassol municipalities involved property sales worth in excess of €6.3 billion. The report notes that the total number of property sales in Nicosia surpassed 13,000 transactions, compared to more than 14,000 transactions in Limassol. While transactions were fairly close in terms of volume, there was a much great disparity in terms of value.

“The slight difference in the number of transactions shows that the value of the transactions carried out in Limassol over the past five years was much higher than in the district of Nicosia,” the report said, adding that the entire Cyprus property market came close to a valuation of €25 billion in total sales in the last five years, with transactions exceeding 100,000 overall.

In the Strovolos municipality, property sales surpassed €1.2 billion in value, with 4,400 transactions taking place. The median property price was €159,193, with prices ranging between €96,162 and €250,050. The biggest portion of sales in Strovolos took place in 2019 with 931, while the bulk of transactions (3,800) during these five years involved properties worth up to €338,000. 137 property sales in Strovolos exceeded €1 million in value, with the highest figure among them involving a property being sold for €25.9 million.

In the Nicosia municipality, property sales exceeded €1 billion in total value, with 4,000 transactions being completed during this time. The median property value was €110,003, while properties ranged between €71,877 and €209,136. Most sales took place in 2018 with 867 transactions, while the bulk of sales (2,718) peaked at €160,000 in value. The company attributes these figures to the scarcity of available properties in the Nicosia city centre, as well as the lack of available land for new developments. The most expensive property sale in the Nicosia municipality was valued at €13.4 million.

In Lakatamia, the total value of property sales came close to €700 million, with 3,350 transactions taking place. The median property value was €136,449, reflecting the municipality’s typical price range of €90,000 and €190,000. Most sales took place in 2021, having already reached 746 this year, with the report noting that “transactions in Lakatamia seem to have been unaffected by the pandemic since they have shown an exponential increase in the last three years”. The majority of transactions in Lakatamia involves properties worth up to €267,000 in value, while the most expensive property sale was worth an eye-watering €43.9 million.

In Engomi, property sales exceeded €400 million, with 1,400 transactions taking place. The median price for a property was €169,000, with typical property prices ranging between €105,000 and €300,000. Most sales took place in 2019 with 320 transactions, while the majority of property sales peaked at €344,000 in value.

Approximately 40 property sales exceeded €1 million in value, while the priciest property was sold for €10.6 million.

The report notes that as is the case in Limassol, apartments accounted for the bulk of all transactions, with Lakatamia being the sole outlier.

In Strovolos, a total of 2,526 apartments were sold during the last five years, reaching €386 million in total value. In the Nicosia municipality, 2,332 apartments were sold for a total of €374 million, with the average price being €102,317.

In Engomi, 893 apartments were sold for a total value of €165 million, with an average price of €133,000.

Finally, in Lakatamia, 1,140 apartments were sold for a total of €138 million, with the average price being 122,000.


Limassol property sales hit €6.3bn in last 5 years

Limassol property sales hit €6.3bn in last 5 years

Property sales across three major Limassol municipalities exceeded €6.3 billion in value over the past five years, a report from independent real estate asset management and advisory firm WiRE has shown. The sales took place in the Limassol, Germasogeia and Agios Athanasios municipalities and were the total value of more than 14,000 transactions. Meanwhile, property sales across Cyprus neared a whopping €30 billion in value with more than 100,000 sales taking place over the past five years.

More than €3.3 billion worth of property sales took place within the Limassol municipality, representing 7,900 transactions. According to data provided by WiRE, the median price for a property sale in the Limassol municipality came up to €178,912, while the typical price range for a property was between €110,082 and €314,714. In terms of sales broken down on an annual basis, 2018 saw the highest number of transactions (1781) being completed. Moreover, the majority of property sales (5485) had a price ceiling of €260,000. Sales exceeding €1 million in value came up to 625 transactions, 422 of which ranged between €1.5 million to a massive 70.3 million in value.

In the Germasogeia municipality, property sales exceeded €2.1 billion in value, with the number of transactions reaching 4,095. The median price in the district during this time was €341,431, roughly twice as much as the median price in the Limassol municipality. In addition, prices for a property in Germasogeia ranged between €161,113 and €598,725, with most sales (940 transactions) taking place in 2018. Some 1786 property sales involved transactions ranging between €123,000 and €443,000, while 1187 sales involved properties costing between €443,000 and €959,000. Sales exceeding €1 million in value in Germasogeia came up to 478 transactions, 192 of which ranged between €1.7 million and €21.8 million.

In Agios Athanasios, the total value of property sales surpassed €800 million, with 2,000 transactions taking place over the past five years. The median price for a property in the municipality was €264,296, while property prices ranged between €172,875 and €429,995. Most sales in the municipality took place in 2019 (443 transactions), while the majority of sales (1054 transactions) ranged between €178,000 and €472,000 in price. Seventy-three property sales exceeded €1.4 million in value, while the highest recorded property price was €17.9 million.

According to the report, the majority of property of sales across all three municipalities involved apartments, with the Limassol municipality alone seeing sales of 4,566 apartment properties totalling €1.5 billion in value, with an average price of €165,000.

In Germasogeia, 2,676 apartments were sold during this time with a total value of €1.3 billion, while the average price was €363,458.

In Agios Athanasios, 744 apartments were sold with a total value of €230 million, with an average price of €235,550.


Landlord refusing to collect rent

Landlord refusing to collect rent

The behaviour of a landlord and a tenant is examined by the rent control court and if a landlord refuses to collect rent or contributes to its non-payment, the court will give the tenant the right to be heard.

The amendment to law 3(i)/2020 limits the right of the tenant to file a reply to an application for recovery of possession. The reply must be accompanied either by proof that the amount due as rent in arrear was deposited with the court or proof that it has been paid to the landlord or a representative of theirs or to a banking institution to their benefit.

However, the court in order to allow the tenant to file a reply, does not only consider the issue of his omission, but also the reasons behind it and whether the landlord actually refused to collect the rent. The examination of these facts ensures the principles of natural justice and the tenant’s right to a fair trial without deciding at this early stage whether the non-payment of the rent was justified as a result of the landlord’s behaviour.

A provision was added to the amendment that the decision of the secretary of the court to accept or reject the tenant’s reply is submitted within three working days. It is at this stage that the court decides whether it will accept the filing of the tenant’s reply, giving the reasoning of its decision. If the landlord does not agree with the decision to accept it and considers that the tenant is in abuse of the procedure since they do not pay the rent, they may file an application to have the reply struck out or set aside.

The above was examined by the president of the rent control court in a judgment issued November 16. An application was made by a landlord who claimed the recovery of possession of a house and rents in arrear. The tenant filed a reply and gave an explanation for the reasons for the non-payment of the rent. He attributed the omission to the landlord who would not sign a tenancy agreement as they had agreed. He said the landlord wanted to continue to collect the rent from the department of benefits, which used to pay it by bank transfer to his account as the tenant received minimum guarantee income. The filing of the reply was accepted as the court considered that the reply raised issues that were attributed to the landlord. Since the issue did not appear to be purely a matter of delay in the payment of the rent, the court considered that the reply should be allowed to be filed.

The landlord responded with an application to set aside the reply, however the tenant filed an objection. The court, taking into account the legal framework and the relevant facts, concluded that the acceptance of the reply was the result of evaluating all necessary facts and in particular the tenant’s defence, which was assessed as not being general. To the contrary, in a simple but clear way, the tenant connected his ommission to the behaviour of the landlord. It was neither fair nor reasonable to examine how the above affected the claim for the recovery of possession in the absence of the tenant. Ensuring the principles of natural justice and the tenant’s right to a fair trial exceeds the rights of the landlord under the new article 11(1)(a) of the rent control law, without of course at this stage deciding the final outcome on the tenant’s line of defence.

The court added that the whole issue did not appear to be only of one dimension as the landlord attempted to demonstrate nor was it limited to the examination of the provisions of article 11(1)(a). In legal terms, the issue in question may be related, on the one hand, to the determination of the actual terms of the tenancy and the effect on them of article 27 and, on the other hand, to the principles related to the finding of an estoppel or a waiver of right and consequently, the court dismissed the application to strike out the reply.


George Coucounis is a lawyer practicing in Larnaca. He is the founder of George Coucounis LLC, Advocates & Legal Consultants, [email protected]