Issue link: https://maltatoday.uberflip.com/i/691413
maltatoday, SUNDAY, 12 JUNE 2016 12 IT could be billed as Malta's most exclusive enclave for the years to come, but the scale of the 'Dubai-ification' of St George's Bay – as millionaires get ready to erect at least eight new towers in the area – could spell inflation in housing prices and a risk to social cohesion, an econo- mist has warned. The ultra wealthy are being lured to a future of high- end residential development and luxury lifestyle areas as developers and business groups hope to maximize their land values at St George's Bay, aided by a new planning policy Labour has introduced for high-rise development. Appetites have been whetted. Seabank hotelier Silvio Debono wants to build two tow- ers for his Hard Rock franchise at the site of the Institute for Tourism Studies; Alfred Pisani, owner of the Corin- thia hotels group, plans two towers instead of the Radis- son Hotel and eight new apartment blocks along the St George's Coast; Anthony Camilleri's Garnet Investments plans a Zaha Hadid creation spanning from the Cresta Quay lido to Moynihan House just beneath the ITS, with a tower at the foot of St George's Road; another two Za- ha Hadid towers will be erected over Mercury House in Paceville by developer Joseph Portelli, who is also ear- marking a 15-storey complex behind the Intercontinental Hotel; next to this new complex will be a 25-storey hotel built by Paul Xuereb; and the St George's Park complex owned by the Testaferrata Group is also planning its own tower. Residences in the special designation areas of Portomaso, Tigné Point and Fort Cambridge – which allow foreign buyers to purchase more than one residence – are already tagged at €8,000 per square metre. Only buyers with deeper pock- ets can be expected to be attracted to St George's Bay. To go by Corinthia's chairman Alfred Pisani's words, it's going to be Dubai and Singa- pore all right. These are the Ultra-High Net Worth (UHNW) individuals who will buy most of the residential units within the luxury lifestyle developments; some of them may well be new citizens who ac- quired Malta's passport at €650,000 under the Individual Investor Programme. But the consensus among real estate developers and agencies is that there cannot be enough of such development. Francis Spiteri Paris, of Perry Real Estate, said the biggest problem realtors faced at the mo- ment was that there was not enough supply of high value real estate in Malta. "At the moment, there is no major development underway. All the units available at Portomaso or Tigné, to name only two, have already been sold, and we cur- rently have no luxury lifestyle development to sell to our clients." The introduction of the IIP was a huge boost to the industry, Spiteri Paris says. His agency, for example, saw a huge increase in the number of foreigners buying property in Malta since the programme's introduction. "I think no one in the industry had realised just what was going to happen with the introduction of the IIP," he said. "This has been such a bonus for the property indus- try, that it's unbelievable." Spiteri Paris said wealthy foreigners are looking for much more than a second or third residence. "They are looking for a lifestyle, and they expect everything to be of the same luxury they are accustomed to, including the surrounding area and facilities." And although Malta is one of the smallest countries in the world, with its rich history, year-round sunshine and friendly locals, it continues to attract these UHNW individuals. As the IIP continues to attract many former Russian nationals, it is easy to understand why Malta's economic and political stability also make it an attractive base for the global rich. France, Germany and the US are the top countries for foreign UHNW investments in Maltese property, where the average listed price for homes over €1 million is around €2.5 million. The median price per square metre is around €6,500 in that price range. According to Wealth-X and Sotheby's International Re- alty, in 2015 Malta was home to 35 UHNW individuals and two foreign billionaires. The 35 multi-millionaires were each said to have an average net worth of €145 mil- lion. 77% of UHNW foreigners who acquired a residency per- mit in Malta were self-made, and on average, 59 years old. One of Malta's billionaire residents is Irish-born Denis O'Brien who owns Communicorp, a media holding com- pany operating across Europe. He was listed among the world's top 200 billionaires in 2015. If you thought that high-value properties were only restricted to Special Designated Areas, think again. A quick search on any Maltese luxury property real estate web- site will quickly disabuse you of that no- tion. Perry.com.mt turned up 264 proper- ties over €950,000 available for sale. The highest-value property is a €9 mil- lion Madliena villa. Sotheby's lists 158 properties over €1.14 million. The most expensive property on their books was a villa in Mellieha, valued at more than €9 million. A similar search on Homes of Quality returned 207 properties over €1 million. A palazzo in Qormi tops the list with its actual value revealed only on request but definitely costing more than €15,950,000. And these figures are only the tip of the iceberg as agencies rarely, if ever, include News The golden mile at St George's taking shape as millionaire developers get ready to maximize their profits by drawing the luxury-seeking global elite to Malta. PAUL COCKS writes 'I think no one in the industry had realised just what was going to happen with the introduction of the IIP' – Francis Spiteri Paris TOWERS OF GOLD €1 billion alone: Seaport Franchising's proposed Hard Rock hotel on the site of the former Institute for Tourism Studies, and the six-star resort, complete with two towers that International Hotel Investments, which is owned by the Cornthia group, is planning Zaha Hadid creations: the two- tower behemoth in Paceville on Mercury House, and right, the Villa Rosa concept over St George's Bay