WHICH CITIES ARE RECORDING DEMAND FOR OFFICES - Filenews 6/4 by Theano Thiopoulou
Office space in Cyprus is in demand and the positive pace of 2025 is expected to be maintained in 2026, a trend supported by the continued interest of businesses and investors. In the 2025 real estate purchase report published by Danos & Associates, it is noted that last year, the market for real estate for offices in Cyprus remained active and at good prices, with Limassol leading the way as the most sought-after business location and boasting the highest average rents, around €29 per square meter per month. Nicosia continues to attract significant interest with a wide range of offices available, while Paphos and Larnaca also show steady demand at more modest price levels.
According to the report, the office sector in Cyprus is expected to maintain its positive pace in 2026, supported by sustained interest from businesses and investors. Demand remains strong in key cities, with Limassol dominating high rents and Nicosia attracting the largest number of transactions, while smaller markets such as Paphos and Larnaca also show steady activity. Continued interest from international companies and broader economic stability are likely to support continued growth and, although prices in the high-end regions are expected to rise further, overall market conditions should remain balanced until the end of the year.
The report states what has happened in 2025. The Cyprus real estate sector is experiencing strong momentum, with office and commercial real estate transactions increasing significantly during the first half of 2025. Nicosia, in particular, has seen an increase in high-end real estate deals, including some of the largest office sales in recent years. Limassol continues to serve as a central hub for commercial real estate, attracting both domestic and international investors. Growing interest from buyers in the EU and the Middle East supports higher demand, which is pushing property prices up in key urban and coastal areas. New developments are limited to prime locations, resulting in tougher competition and increased prices. The introduction of a more flexible permitting system is expected to simplify approvals, potentially speeding up construction projects. Meanwhile, the office rental market remains diverse, with prices influenced by location, building type, and tenant preferences. Interest from foreign buyers, particularly from EU countries and the Middle East, is contributing to higher demand and upward pressure on property values in prime locations. Urban centers and coastal areas face limited new developments, fuelling competition and pushing prices higher in sought-after locations.
Beyond the offices, let's see what is happening in the market and renting warehouses. The national supply of warehouses, according to the report, remains limited but stable, with availability similar to early 2025 levels. Limassol continues to dominate the market with the largest share of available warehouses (around 47%). Nicosia maintains a strong position (around 33%), followed by Larnaca (around 20%). The national average rent remains around €5 sqm and based on the report's data, Limassol continues to record the highest rental prices (€7 sqm) due to persistent demand. Nicosia remains stable at €5sqm, while Larnaca remains the most affordable at €3sqm. Limassol's role as Cyprus' main port maintains high demand from logistics and distribution operators, and despite limited availability, the market remains balanced.
Differences Between Property Types
During the second half of 2025, according to the Danos report, the housing market in Cyprus continued to show divergent trends across segments, with overall prices increasing modestly but with notable differences between property types. House prices in Cyprus recorded an annual increase of around 5% until the third quarter of 2025, mainly due to increases in apartment prices, while house price growth was more moderate compared to earlier in the year. Market activity has remained largely region-dependent, with Larnaca once again showing the strongest increases in residential sectors, fuelled by continued development activity and growing buyer interest. Famagusta district recorded modest gains, while Limassol and Paphos recorded more modest improvements, in line with slower price adjustments seen earlier in the year. Nicosia remained the most stable market, showing marginal changes.
