Written by Anthony Manduca http://www.timesofmalta.com
The global economic crisis has had little impact on Midi’s investment plans or on its sales, according to CEO Ben Muscat. Speaking in an interview with The Times Business Mr Muscat said that Midi did very well when it launched the T10 properties last July – just before the global crisis was emerging.
“There has not been any direct impact on our investment. There has been a slowdown, as one would expect, in terms of enquires, and also a slowdown in the rate in which apartments we have sold have been re-sold. However, since January this year we have concluded one to two property sales per month, predominantly to foreigners, and we are talking about a value of between €700,000 and €1.8 million.
“There is a certain calming of enthusiasm, with regards speculative investment but as we speak we hardly have any property to put on the market,” he said.
Mr Muscat said that most of the expatriate money buying into the Midi project has gone into residential parts of the project and about 30 per cent of all the property revenue values are today derived from foreign buyers.
“Tigné Point has been an important magnet for foreign direct investment into Malta. Tigné South in particular is proving to be a very attractive rental destination. Maltese investors are renting out their properties mainly to expatriates at very attractive rental rates. There has also been some foreign interest in the commercial offers at Tigné Point and Manoel Island although this has been dampened somewhat by the global economic climate.”
He said that foreign buyers have purchased property both as an investment and as a second home. “There’s a mix. The majority have purchased property to own, to visit from time to time. Foreigners are attracted because of the underlying investment value as well as the tax advantage to reside in Malta.”
Mr Muscat points out that about 40 per cent of the total purchases had originally been bought as investments but added that since then most have been transferred to end-owners who could be eventual residents at Tigné Point or who would be keen on renting. Midi has now transferred the ownership of 160 apartments, 80 of which are occupied by Maltese and foreign residents.
The Midi CEO explained that although the Midi project, which consists of apartments, a retail centre and a business centre, is now moving ahead on target, “the progress at Tigné Point has been obviously dependent upon the rate at which planning permits were issued, and this is obviously a very crucial factor”.
He points out that there were times when some of the work had to be stopped because the permits for the subsequent development phase had not yet been issued.
“Kicking off a phase is not something you do overnight – there is a whole process that you have to go through such as tendering, procurement, and mobilisation. Therefore unless the permits are available months ahead before works can start on site, you are left with a gap which slows down the whole process. This has particularly been the case in works for Tigné North,” he said, with a hint of frustration at the official bureaucracy he has had to put up with.
However, substantial works have been completed and others are in progress. There is also a lot of work underground – such as parking and roads leading to the area – which are perhaps not as evident, he explained.
“We are in the process of completing the last works on Tigné south, which we refer to as blocks T8/9 and T10, of which a number have already been delivered to owners. Another 60 apartments should be completed by the end of the year. The 59 apartments of T10 were put on the market at a time when the international financial sector had already started to look shaky, but they were marketed as up-market very well finished apartments. These sold very well and out of 59 apartments launched we now have a stock of 19 apartments.”
Mr Muscat said that the clubhouse facility underneath Tigne South, which includes a pool, deck, restaurant, lounge bar and a fitness centre is now almost complete should be available for use by residents of Tigné South by next month.
“The Plaza phase is also well on its way to completion. This involves a large piazza which will be the largest one in Sliema with four levels of car parking underneath it and surrounded by boutiques and 20 duplex apartments above these ground floor retail units.
“The commercial retail centre, branded as The point, should be open to the public by spring 2010. This time next year we should be looking at a very substantial chunk of Tigné Point comprising the retail centre, the piazza and car park facilities, with shops and restaurants around it, the clubhouse, Tigné South, and Tigné Fort all complete, and all functioning as a whole.”
Asked if the owners of Sliema’s retail outlets, especially those at the Ferries or Bisazza Street, were justified in feeling threatened by the 60 retail units planned at the Tigné Point, Mr Muscat said: “Together with the piazza this will be a very attractive destination for shoppers and visitors alike. The retail units will sell a mix of high quality luxury brands along with other brands which have a wider appeal. Tigné Point is first and foremost a destination which will be open to the public. There will no doubt be a pull of visitors from traditional centres in Sliema to Tigné Point.
“However we do not think this will rob the current retail destinations in Sliema, such as the Plaza or the Ferries, of its clientele. If anything we see a future where Sliema in general, as a visitor and retail destination, will be much stronger than it is now. I think that in the long-run Sliema stands to gain. Obviously Sliema will gain at the expense of other destinations such as Valletta for example.”
He added: “Retail locations tend to move. We all know what happened to Prince of Wales which at one time was a very important shopping destination in Sliema but the trend moved away to the Ferries, Tower Road and Bisazza Street. Things will happen but we don’t think that Tigné Point will directly compete with the shopping areas of Sliema, but these destinations can complement each other.”
Mr Muscat said that the first phase of the restoration of Fort Manoel, which consisted of the work done in all the areas around the parade ground is now almost complete. The barracks have been restored, works are now on-going on the parade ground and the chapel has been rebuilt, cupola and all.
This restoration phase is now being followed up with the installation of apertures to all the restored buildings and with the laying of basic infrastructure that is intended to feed all the services, such as water and electricity supply and drainage facilities to all the buildings restored and rebuilt. Midi also undertook substantial work related to the restoration of the bastions as is evident when viewing the Fort from Valletta.
He said the restoration works associated with Fort Tigné are also ready and work is being carried out on the lighting scheme “which will light up the fort and which will create quite a spectacle.”