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Leptos Cyprus looks to Africa, Europe for new projects

The Leptos Group, the family-controlled property and leisure group that includes two public companies listed on the CSE, is embarking on a three-pronged offensive at home and abroad to realise some life-long ambitions of becoming the leading property developer in the region.

Although the flagship company, Leptos Estates, is primarily active in the Paphos district, the property developer will now get involved in holiday and residential homes, as well as commercial properties and mixed-use projects all over the island.

The group’s overseas subsidiaries that have only dealt with minor projects in Athens and some holiday properties in Greece, will embark on new ventures in North Africa from Egypt to Morocco, as well as target the potentially lucrative property market in East Europe.

Finally, after some opponents made unnecessary noise and objected to the project, delaying its start by at least a year, the CYP 550 mln (EUR 948 mln) Neapolis is expected to get underway some time in 2008 as the university permit has been secured and investors are being lined up to advise or co-develop the hospital.

Talks are in progress with Israel’s Hadassa hospital, The Mayo Clinic, London Open University and Siemens, while the university will be English-speaking in order to attract international students and will start with schools of applied sciences, business and management, the arts and literature. However, Leptos company officials say that local legislation must be reformed to allow more foreign academics to practice in Cyprus and not be limited to short-stay visas.

Parallel to all this, the Neapolis complex will also house a research centre for innovation.

The group includes two public companies that will also be utilised in the expansion plans -- Leptos Calypso Hotels, owner and operator of the 5-star Coral Beach Resort and the nearby Thalassa boutique hotel in Coral Bay, the Panorama in hotel in Crete and other smaller hotels, and Pandora Investments, the owner of large tracts of land for development (Neapolis, golf courses, etc.)

Michalakis Leptos, the Group’s founder who started with ambitious projects in Kyrenia which he lost in the Turkish invasion, recently decided to diversify from the corporate philosophy of developing holiday home villages and resorts in the Paphos and Polis areas, and is now ready to take on new challenges in new markets.

Already, the Leptos Group is looking to develop new business in Greece with major developments in Athens, Crete, Santorini and Paros.

It is developing individual traditional-style villas on the scenic island of Santorini, the Aphrodite Maleme villas in Chania, villas in Paros near the Drios harbour as well as around the Molos fishing village.

The biggest project, however, is the mixed-use Costa Nopia, a luxury resort including hotel and homes, spas, marina, golf course and other facilities at Kissamos Bay with its own beach stretching 1.5 kms.

The Group’s enlargement will include the expansion to the rest of Cyprus (previously reserved to rival property developers) and create new ventures further away from Greece, such as East Europe, North Africa, redeploying the Group’s 40-year experience in building holiday homes and unique tourist ventures.

“Our expansion will come through buying materials, services or even other companies,” Michalakis Leptos said.

However, Michalakis Leptos is vocal as always when it comes to criticizing the local administration or ‘amateur developers’ who ruin the market.

“Tourism has a lot of problems and Paphos will continue to suffer is we don’t make changes,” Michalakis Leptos said.

“The whole area of Peyia has become an area of uncontrolled and irregular development,” he said.

“There are too many 5-star hotels with poor quality. Paphos can no longer sustain ten 5-star hotels. The government must keep its promise and help some owners exit from the business, as we have too much regulation and its is often too strict.”

Leptos said that Greece provides a cash subsidy of 40-45% of renovation costs to hotel operators, Egypt enjoys cheaper labour and has low construction costs.

“I think the problem is that the government has not understood what the tourism industry is all about and what it contributes to the island’s well-being,” he said.


Green culture

“Green has been a part of our culture from the first day we started,” said Michalakis Leptos, who recalled the first public tree-planting at Kamares village, near Kissonerga, in 1980, when the then-young bishop (and present day Archbishop) Chrysostomos would bless the trees and the unique ceremony.

“We are the first real environmentalists. We have practiced green areas and green designs in all our projects, even from our days in Kyrenia,” he said. Leptos has continued this tradition on-and-off over the years, culminating with the latest expedition ten days ago when more than 1,000 trees and bushes were planted in the ‘caves’ area of the Seven Saint Georges’ locality in Yeroskipou.

This will also be the initial entrance to the ambitious Neapolis complex, for which some 200,000 sq.m. have been allocated as ‘green areas’. In addition, the Leptos Group has sponsored the publication of a book that depicts the rare flowers that avid nature lovers and holiday home owners have photographed or catalogued in the area.

As regards market rumours that the Leptos group or one of its public companies was in talks to take over rival Aristo Developers, Michalakis Leptos was adamant:

“We did not make any offer for any public company.”


Large projects since 1960s

Large-scale projects are not new to Michalakis Leptos, who is presently aided by his two sons – Pantelis in the sales and marketing services, and George in design and development.

Leptos started in the 1960s with the Kyrenia Island Hotel, the Kamares Complex and the Kamares Palace in Kyrenia. After losing almost everything, he rebuilt his present-day empire by developing major projects such as Saudia City in Jeddah that included a town of 4,500 homes and all the necessary infrastructure that goes with it.

All the property and real-estate assets he has accumulated over the years are now “nearly 100% within zones of development,” he said.

“The property market is more or less stable and the effect of (the introduction of) the euro will be minimal.”

As regards the issue of casinos, Michalakis Leptos believes that such projects, as well as the marinas and golf course will not by themselves attract tourism and solve the problems of the industry.

“If the government wants to develop casinos, it must give a license to each district and not just one for the whole of Cyprus, otherwise it will only benefit the gamblers.”


Yeroskipou support

Meanwhile, a few days after announcing the company’s ambitious master plan for Neapolis, the Yeroskipou municipal council declared its support to the project.

This comes a year after members of the previous municipal council and individual property owners stirred up opposition to the Neapolis project a year ago, claiming that their property values would diminish while Leptos would be the big winner.

The town council has in the meantime included the properties of the disgruntled owners in the new zones with a higher development coefficient, thus satisfying all opposing views.

Last Thursday, the Yeroskipou council gave its go ahead to the town planning procedures after representatives of the Leptos Group gave a technical briefing.

The town believes that the development of a university, a hospital and a research centre will boost the local economy.

In order to avoid the disorganized development of the nearby Universal estate, the Yeroskipou wants the Neapolis complex to be developed in stages and with a better planning regulation to combine wide open green areas, a demand that has been foreseen by the Leptos Group.