As published by Financial Times
Date:23rd May 2009
Written By: Gordon Miller
Benjamin Disraeli once said of the Maltese capital, Valletta, that it was “a city built by gentlemen for gentlemen”.
The first group of gentlemen to which the 19th-century British prime minister referred was the Knights of St John, a monastic order made up of English aristocrats who were granted ownership of the island in 1530 by Charles V of Spain and who later defended it against Ottoman incursions. The second was presumably people such as Disraeli himself and the poet Lord Byron, who introduced Disraeli to Malta, since the UK ruled the formerly French-ruled territory from 1800 until its independence in 1964.
Continuing the tradition today are businessmen such as Julius Nehorai, who owns homes in London, Los Angeles and Portugal’s Algarve but who relocated to the island’s St Julians three years ago. “Malta appealed to me as a base because it has culture, a great climate, is only a three-hour flight from London and the locals are friendly,” he says. “Most significantly, it has a friendly tax scheme that makes doing business on the island viable.”
His attitude is one that local government and property companies hope to foster among more “gentlemen” buyers, both native and foreign, in coming years as they pull back from a 1970s and 1980s emphasis on mass-market tourism (which resulted in tacky strips of hotels and apartments) to focus on higher-end – yet still quite large – developments, mostly on the north-east coast within easy driving distance of Valletta.
“It’s important to remember that Malta is only a small island of 400,000 people and per capita it’s very expensive to compete with the bigger and richer nations to attract [foreigners] but nowadays the approach is to focus on the culture and history,” says Erminia Parfitt, assistant sales manger for property consortium Midi.
Malta’s new image would be bolstered by the mooted appointment of architect Renzo Piano to design a new parliament building on long-dormant land where the grand opera house, bombed during the second world war, once stood. Around the corner, on Valletta’s Grand Harbour, the €25m Valletta Waterfront project has seen the restoration of the historic Pinto and Forni warehouses, transforming them into a buzzing café and restaurant quarter next to the increasingly busy cruise ship terminal.
And at Tigne Point, overlooking the site where the knights built their last fort, Midi is undertaking a €450m restoration and construction project, with plans for 420 apartments, a 17,000 sq metre retail centre, 16,000 sq metres of office space and the fort set aside as a cultural venue. Prices for stylish two-bedroom units start at €407,000.
“We purposely built generously sized, high-spec apartments that would also attract the local market to buy and live at Tigne Point,” says Midi sales and marketing manager James Vassallo. “We didn’t want to create a second-home-only development that would look like a ghost town at certain times of the year. More than 60 per cent of the new apartments have been sold to Maltese, with British buyers making up nearly half of the remaining purchasers.”
Other luxury developments under way include Portomaso in St Julians, which will include a private marina and residences priced from €307,000, and the nearby Pendergardens, with three towers set around a piazza housing 360 apartments at €200,000 and up.
These new-build properties are increasingly popular, especially with Maltese buyers, but many foreign househunters are drawn to the island’s older buildings as well. And, although some are crumbling, many have already been restored to high standards. In Sliema, five minutes by ferry or 10 minutes by car from Valetta, estate agency Propertyline International is selling a three-storey, 300 sq metre, six-bedroom, roof-terraced art deco townhouse on a lovely street adjoining the promenade for €650,000. Inland, in the town of Attard, an expertly renovated 500-year-old, four-bedroom courtyard house with a frescoed ceiling and a 150 sq metre basement is priced at €1.153m
Both estate agents and developers acknowledge that the global recession has made it harder to sell luxury residences in Malta. But “high-quality properties in the right location continue to perform well,” says Michael De Maria, Pendergardens’ marketing manager. “Over the past few years, [we saw] average increases of around 8 per cent per annum driven by Malta joining the European Union in 2004 and the euro at the beginning of 2008 and the country’s economic success. Today, price increases are at a more sustainable level.”
Trafford Busuttil, Propertyline’s managing director and president of the Maltese Federation of Estate Agents, confirms that the market has been stagnant but he remains optimistic. “For the past half-decade, around 800 Britons a year have bought on Malta, except for this one, which has been slow,” he says. “Central bank figures for last year showed that average property prices fell by 2.7 per cent, with shell flats decreasing by 2 per cent, finished apartments by 5.4 per cent, terraced houses by 1.8 per cent and villas by 3.7 per cent. So we are seeing a correction. But sales and developments are still moving along.”
Indeed, Briton Paul Ramsay and his partner recently bought a two-bedroom penthouse in the coastal village of Marsascala as a getaway and an investment. “We were looking for a place that we could visit at least once a month, even for long weekends, and just unwind,” he explains. “We opted for Malta because of its relaxed lifestyle, blend of cultures, climate and charming scenery. [It’s] a small island so you are never far from something of interest and because of the variety of attractions, from ancient historic sites to good restaurants through to nightspots, it is never dull. Having both travelled and worked extensively worldwide, we found the Maltese one of the friendliest people we have met. And the penthouse we bought, with its light and airy interiors, combined with a large terrace, was just what we were looking for.”