The very recent decision of the Ministerial Committee to go ahead with the issuing of permits for 14 golf courses, is good news for the building industry and the tourist section as well. The Committee will submit its recommendations to the Council of Ministers and after its approval, we will expect the golf courses to commence development within the year 2010 (after securing the planning/building permits etc). So, in addition to the 4 golf courses (one under construction) that exist at present, there will be in another 14 making a total of 18 – We doubt however that out of the new 14 permits, more than half will actually be constructed. A number of those who have acquired the permits, are either not in a suitable location, making them less competitive than the others, whereas other owners do not have/cannot raise the required funds for their development. As you may appreciate, the shortage of finance, high interest rates and the level of demand worldwide for real estate, do not encourage neither the owners, nor the financiers for such projects, whereas the 3 out of the existing 4 golf courses still have excess supply for sale. We expect that, by the time that the permits will be secured (approximately 2010) the time will be used for preparatory work, hoping for better times to appear in the real estate market during the years 2010-2011 – the year when we expect that these golf courses will be marketed.

We have been lobbying the Government to change its planning requirements regarding golf development in order to place them in a more corrective route. For this reason we have suggested:

1. Each permit should be “sold” at the price of €8.0 mil. as a compensation to the Government for giving a relaxation to agricultural land to become development land, thus having the land value multiplied many times over (we understand that this has been approved by for the sum of €5.0 mil.).

2. Housing units in a golf course should not have sizes less than 250 sq.mts., so that demand is limited to high end buyers and for golf users for own use so as not to have small housing unit estates of the buy-to-let type and thus not only downgrading the market, but also be in direct competition with the hotels (for which the golf courses are being built). We understand that the Ministry of Interior is now suggesting a minimum size 200 sq.mts. per unit.

3. The 250.000 sq.mts. public green area to be concentrated in 1-2 spots and be developed free of charge by the developer, with a minimum cost of €5 mil. into sports centers, so that they can be used by locals and tourists and thus improve the chances of attracting sports tourism (Governmental priority). Alas this has not been adopted and the public green is wasted around the golf courses, increasing the green, but with no other benefit to the tourist industry and the public at large - We differ.

4. Bank guarantee to be offered by the developers to the Government, guaranteeing the proper upkeep of the golf course and for an amount of €8.0 mil. In the event of the course not being properly kept, the Government to take over the €8.0 mil. and the golf course which it can then let/sell to third parties (not adopted by the Government – but alternatives are being considered).

5. Desalination plants needed for watering of the golf courses to be grouped together or each golf to pay an amount to the Government equal to the cost of a desalination plant and including its upkeep to an extent and the water sold back to the developers at the current drinking water prices. Also developers to pay for the added ribbons (it seems that this will be adopted).

6. An international/local committee to be set up in order to issue yearly operating permits after inspection, making sure that the golf courses are well kept and to international standards – If not our proposal B to be used and the golf course to be downgraded and recorded as such in the C.T.O. adverts – Not adopted.

7. A certain percentage (say 20%) of playing time to be earmarked for the hotels (their guests to play for a fee at normal, even subsidized rates) – remember that the golf courses are built in order to support the hotels and not make more property developers wealthier.
   Etc etc

We wished the Government followed all of our and other suggestions, but at least the above adopted measures are “something” and we hope that it will place the golf courses into a corrective route for the benefit of the locals, but primarily of the tourist industry, protecting at the same time the public interest.

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