Real Estate Opportunities

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Maltese real estate is an excellent store of value.

Accordingly, many local and foreign investors buy and hold property as a valuable tangible asset, confident that demand for exclusive and upscale housing will remain robust as Malta’s economy continues to grow.

Other investors prefer more active strategies, and there are several examples of seasoned real estate investors sniffing out and capitalising on latent opportunities in Malta. A look at some of the successful foreign real estate investments from years sheds light on the strategies used to add distinct value to the country’s property landscape.

Capitalising on the capital

A group of experienced foreign real estate developers and investors, for example, established the VBL Group after recognising the underutilised potential of Valletta – Malta’s capital. VBL entered the scene prior to Valletta’s designation as the European Capital of Culture in 2018, a time when considerable efforts were being made to regenerate a city that had become rundown from underinvestment.

By combining local insight with foreign expertise and capital, the company embarked on a large-scale, long-term renovation project beyond the reach of the local investment community. As a result, it has become the largest private landowner in Malta’s capital and has seen the value of its portfolio rise significantly over the years as new life was breathed into the area.

VBL’s long-term thinking enabled it to go after difficult projects involving the acquisition of entire city blocks, often from dozens of owners, some of whom would have long since moved abroad. Once that task, which is not for the light-hearted – is complete, VBL then needs to obtain planning permission to reinforce the structure and entirely renovate it for modern residential or commercial use. Investments like this may take a decade or even more to start generating cashflow – a prospect that may not be attractive to many investors.

What VBL saw was that Valletta’s property prices, on a square metre basis, were far lower than those of comparable historic walled cities around the Mediterranean. That insight led the company to become the largest private owner of real estate in Malta’s capital as the city underwent a remarkable regeneration that is still ongoing today – a transformation that VBL was able to contribute to and capitalise on.

Breathing new life into historic properties

Similarly, the German Von der Heyden Group saw a diamond in the rough in the Maċina, a historic, 16th-century bastion overlooking the Grand Harbour. The group has since restored it into a boutique luxury hotel and venue with an exquisite gastronomic offering.

Strategically situated alongside the country’s main superyacht marina, the Gran Cugó Macina has become one of Malta’s premier hospitality offerings, and showcases the synergies made possible by the islands’ dense and unique urban landscape.

The company followed that investment with another in the Three Cities, taking over the historic 18th-century Palace of the Captains of the Galleys and converting it into a boutique hotel for the most refined tastes. The Cugó Gran Vittoriosa, with 18 individually designed suites, is set to open in 2025.

Beyond historic sites

While Malta’s wealth of historic sites offers a compelling backdrop for foreign investment ventures with a visionary approach, real estate opportunities are not solely about converting legacy buildings to modern use.

For example, Malta Properties Company (MPC), a subsidiary of Dubai Holding, is a key player in the commercial real estate segment, with its office blocks and industrial properties hosting several blue-chip enterprises.

Finding opportunities

Foreign investors would do well to examine the country’s present and future needs to identify existing market gaps that local investors are unable, unwilling, or slow to fill. Upmarket residences remain in short supply, being eagerly lapped up as soon as they are brought to market. Also lacking are modern apartments that meet the sophisticated demands of educated professionals who may be willing to pay a premium for highly finished smart homes with serious sustainability credentials – if only they could find them.

In this exercise, local partners and property consultants, especially those specialising in assisting foreign buyers, can be of vital help. The collection and analysis of data pertaining to property has also grown more refined in recent years, reflecting the sector’s maturation. Regular updates on the real estate market by the Central Bank of Malta have now been joined by valuable private contributions. Most pertinently, these include reports by KPMG Malta, commissioned by Property Malta, and Grant Thornton Malta in association with Dhalia Real Estate – publications that are certain to make for interesting reading for prospective investors in Maltese real estate.