MONEY JULY 2015 ISSUE 31 by BE.COMMUNICATIONS

BUSINESS | LIFESTYLE | DESIGN

THE REAL ESTATE AND TOURISM ISSUE ISSUE 31

CHARLES BUHAGIAR:

MONITORING THE BUILDING INDUSTRY URBAN SPACES

REAL ESTATE IN MALTA TRIBUTE TO

MICHAEL REFALO

Come and visit Mgarr Heights, beautiful new apartments with incredible views of Cominoâ&#x20AC;&#x2122;s Blue Lagoon, the harbour and the rolling hills of Gozo.

2 - Money / Issue 31

Money / Issue 31 - 3

More info: 9949 4820 | www.mgarrheights.com

CONTENTS

WELCOME At first glance, real estate and tourism are distant relatives. Yet in reality, they are closely connected.

THE REAL ESTATE AND TOURISM ISSUE

Just consider the recent development, and subsequent uproar, over the proposed development of a university at Zonqor Point in Marsaskala: the proposal focuses on the potential that a university has in boosting education tourism and the ripple business effects in the area and the south of Malta.

8 BUILDING A STRONGER CONSTRUCTION INDUSTRY

The same goes for the proposed development of a shooting range at Busbesija. Those against the development are arguing that this development, in an outside development zone, will have a negative effect on the surroundings, including a nearby retreat house. Those in favour of the development claim that the shooting range will have a positive effect on Malta’s sports tourism. In this issue of Money, we take stock of what is happening in both the real estate and tourism industry in Malta. In an interview with Veronica Stivala, perit Charles Buhagiar, chairman of the Building Industry Consultative Council, says that sound insulation, natural lighting and thermal comfort should be taken into consideration in the evaluation of a property. In fact, the council is planning to draw up a comfort index for buildings. Dr Antoine Zammit, an architect specialised in urban design and founder of Studjurban, tells Jamie Iain Genovese that creating nearly zero-energy buildings and sensitive interventions constitute an integral part of green urbanism. Speaking of green elements, architectural designer Eliza Costabel explains how a well-designed garden adds value to a property. In recent years, the tourism sector in Malta has been doing well. However, the number of arrivals does not tell the whole story. In fact, as Victor Paul Borg argues, mass tourism could in fact be counterproductive. Rather, Malta should move away from mass tourism and create added value in order to retain and improve yield. In this issue of Money, we also analyse Europe’s growth cycle and propose how demand and supply could be transformed into opportunities. This edition is a bitter sweet one for me as it is the first Tourism issue without the guidance of a man I had the privilege to call my father-in-law. Dr. Michael Refalo who passed away last February, was a man of strong morals and work ethics and although we argued about almost everything (as son/father-in-laws do) his presence gave me the strength and insight to tackle all aspects of life and business. His memory will be treasured by all and I will be eternally grateful for the time spent together (even the arguments). Grazzi Mike.

Editor Anthony P. Bernard anthony@moneymag.me Consulting Editor Stanley Borg stanley@moneymag.me Design Roderick Peresso Design Studio www.peresso.com Printing Print It Distribution Mailbox Direct Marketing Group

Hand delivered to businesses in Malta, all 5 Star Hotels including their business centres, executive lounges and rooms (where allowed), Maltese Embassies abroad (UK, Rome, Brussels, Moscow and Libya), some Government institutions and all ministries For information regarding promotion and advertising call Tel: 00 356 2134 2155, 2131 4719 Email: hello@moneymag.me

JULY 2015

Sound insulation, natural lighting and thermal comfort are just some aspects of a building not taken into consideration in the evaluation of a property. Perit Charles Buhagiar tells Veronica Stivala of the Building Industry Consultative Council’s plans to draw up a comfort index for buildings.

11 AWAY FROM THE MASS

Malta has to move away from mass tourism as greater numbers could be counterproductive, says Victor Paul Borg.

16 MICHAEL REFALO: A TRIBUTE Money remembers the late Dr Michael Refalo: a family man, politician and true gentleman.

20 WATCH THIS (GREEN) SPACE Good urban design is an environmental, social and economic need, Dr Antoine Zammit tells Jamie Iain Genovese.

41 TURNING DEMAND AND SUPPLY INTO OPPORTUNITIES

What are the elements that give an organisation competitive advantage in the rental property market, asks Shaun Galea.

44 WISH YOU WERE HERE

What motivates foreign buyers to buy a holiday home in Malta, asks George Larry Zammit.

49 GET IN THE GAME

Sports tourism could be a new niche for Malta, says Reuben Buttigieg.

54 CONNECTING WITH NATURE A well-designed garden adds value to your property, says architectural designer Eliza Costabel.

56 INVESTING IN AN AGE OF DIVERGENCE

Europe is in the middle of a growth cycle. But how will the Greek chapter end, asks Alexander Mangion.

70 SUMMER BRINGS MAGIC

It’s the beautiful season so it’s only fair that Money gives beautiful gifts.

72 BUSINESS DEAL

When travelling in business class, it’s all about the detail, says Mona Farrugia.

74 THE BLUESMAN’S BLOG

Oil is back in the news, says The Bluesman. And so are police killings and airport security.

Cover:

Courtesy of Il-Mument.

Money is published by BE Communications Ltd, No. 81, Howard Street, Sliema, Malta SLM 1754 All rights reserved. Reproduction in whole or in part is strictly prohibited without written permission. Opinions expressed in Money are not necessarily those of the editor or publisher. All reasonable care is taken to ensure truth and accuracy, but the editor and publishers cannot be held responsible for errors or omissions in articles, advertising, photographs or illustrations. Unsolicited manuscripts are welcome but cannot be returned without a stamped, self-addressed envelope. The editor is not responsible for material submitted for consideration.

Errata Corrige: The LifeMedGreenRoof project, featured in the February/March issue of Money, is partially funded through LIFE+ which is the EU’s financial instrument supporting environmental and nature conservation projects throughout the EU (http:// ec.europa.eu/environment/life/funding/lifeplus.htm). 4 - Money / Issue 31

A Slice of the High Life Our innovative programme lets you enjoy the luxuries of yacht ownership without the headaches and ongoing costs. Exclusive Sunseeker plans starting from â&#x201A;Ź45,000. Find out how: WWW.AZUREULTRA.COM Money / Issue 31 - 5

MALTA’S NEW SHOPPING

EXPERIENCE

6 - Money / Issue 31

Psaila Street, Santa Venera

Money / Issue 31 - 7

CONSTRUCTION

BUILDING A STRONGER

CONSTRUCTION

INDUSTRY

any of us are familiar with properties, both bought and rented, which have allowed us to listen in to more than we want to of our neighbours’ antics and activities. The level of sound insulation in a property is currently not taken into account in its evaluation. The same can be said for other factors such as energy efficiency. These are issues that Perit Charles Buhagiar is working on in his capacity as executive chairman of the Building Industry Consultative Council. Buhagiar explains how buildings are at the moment evaluated according to type, size, location and finish.

8 - Money / Issue 31

Photo: Jamie Iain Genovese

“However, there are other factors which we, as BICC, think should be included in this list,” he says. Buhagiar adds natural ventilation and lighting, sick home syndrome – which is when occupants become sick as a result of time spent in a specific building – and thermal comfort. These will all feature in a comfort index for buildings that is being drawn up. Upping standards is the BICC’s encouraging approach to the local construction industry. The BICC is essentially an advisory council made up of all stakeholders involved in the construction sector. This includes the operators, such

as real estate agents, developers, Chamber of Commerce and the general retailers and traders, as well as organisations from the public sector like the Housing Authority, the Lands Department, architects and engineers, and educational institutions such as the University of Malta and MCAST. Added to the list are financial institutions, regulators and workers’ representatives. So together with all these stakeholders, the council strives to keep its ear to the ground, and ceiling, of Malta’s construction industry. “The BICC’s aim is to provide a forum where issues concerning building are discussed and

Property Market, Research and Innovation, and Education and Training. One of the current projects the working groups are working on is addressing the problem of people not going into the construction industry. How so? “People are not aware of the opportunities available in the construction industry,” notes Buhagiar. “There are 107 different skills but people do not know this and simply think that construction is a sort of skill or trade that gets you dirty and hurt. It can be a well-remunerated job too, of course,” he comments. This is resulting in a lacuna in trained local resources, leading to the need to import certain professionals. The industry is unregulated and is often causing unfair competition to locals, undercutting those who are really good. In order to address this issue, the BICC is investing in a skill cards initiative. These cards are meant to give formal recognition to those who are good at what they do but got their training informally, for instance, through apprenticeship.

“PEOPLE ARE NOT AWARE OF THE OPPORTUNITIES AVAILABLE IN THE CONSTRUCTION INDUSTRY.” “The idea is to give them pride in their work, to give them something to show for it,” Buhagiar explains. The skill card helps people on the other side of the fence too, naturally, and helps employers find the workers they need, say a decorator, through a more professional system, rather than through recommendation alone. where solutions can be proposed,” explains Buhagiar. The council then takes these issues to the government, which it also advises and assists in its implementation of EU legislation and directives.” Current goals are meeting the 2020 energy targets. The BICC’s mission, Buhagiar continues, is to monitor the building industry and to advise policy makers on ways to enhance it as a strong social and economic contributor to improve sustainable development. The BICC’s responsibilities are manifold, which is why it subdivides into five working groups: Building Regulations and EU Directives, Regeneration of Property, the

“This helps prevent work being done badly, gives comfort to clients, leads to instilling pride in workers and makes for a more serious industry,” Buhagiar adds. The skill card initiative is being received well by stakeholders. It is a Budget measure and will be implemented by the end of this year. The BICC will be entrusted with issuing these skill cards, in collaboration with MCAST and the Employment and Training Corporation and will also require the completion of a health and safety awareness course; construction is sadly one of the largest contributors to onsite accidents at work. The project will be piloted with four skills: decorators, tile layers, plumbers and electricians, and will then be extended to the

rest of the industry. The transition period will be five years with the hope that after seven years there will be cards for all skills. Another initiative the BICC is working on is the creation of an online directory for green services and products in construction. “The idea is to promote an environmentally friendly industry and to make it more environmentally sustainable”, Buhagiar explains. The website will feature a list of products (such as PV panels) as well as services and a list of those who can advise on the technologies available, such as installers and professionals who can offer the best solution to your problem. The BICC, together with the National Statistics Office and the Ministry of Finance, is also investing its energies on drawing up a property price index. This will be used to measure inflation and property prices. Currently studies are carried out by separate organisations whose results do not tally, notes Buhagiar. The property price index will thus ensure a flat rate, helping banks in the allotting of mortgages and the way properties are evaluated. The BICC has started working with residential property as commercial waters get difficult and complicated. We also discuss the BICC’s work on regenerating vacant properties. Buhagiar starts by underlining that NSO statistics stating that there are 70,000 vacant properties are incorrect. The BICC actually visited the locations where some of these vacant properties are and discovered inaccuracies, such as garages being listed as separate properties. A more realistic figure is 30,000. Buhagiar attributes the reason for this still high figure to issues such as inheritance where the price decided is not realistic and thus halts the selling of the property. Other factors include litigation between inheritors as well as the conditions of property which does not make it easy to sell. The BICC is trying to come up with proposals in time for next year’s budget. When asked what these will be, Buhagiar says these have not been decided upon yet but may consist of financial incentives such as the first time buyer’s scheme (government removed the 3.5 per cent stamp duty on the first €150,000 of the value of a property) which helped in this too. As our conversation draws to an end, the numerous issues that need to be addressed are clearer. Yet the burning question has to be asked: Why does Malta not have a minister responsible for construction? A difficult question to answer for Buhagiar who himself filled this role in the 1990s. “Our remit is so far-reaching precisely because we do not have a politician responsible for construction,” he points out, adding how the building industry contributes a huge 9.3 per cent to Malta’s GDP. “The BICC is trying to give this industry some direction,” comments Buhagiar.

Money / Issue 31 - 9

A DREAM HOME IS GREAT...

...BUT THE RIGHT ONE IS BETTER. Weâ&#x20AC;&#x2122;ll find the right home for you and your family. The home that you will create lifetime memories - where your children will grow - your grandchildren will play and your family will share moments of joy and sadness. Thereâ&#x20AC;&#x2122;s no other estate agency in Malta that is qualified to deliver you a better service. Choose the Right Agent.

e info@remax-malta.com f facebook.com/maltarealestateremax g plus.google.com/+remaxmalta 10 - Money / Issue 31

www.remax-malta.com

Victor Paul Borg is an international travel writer and photographer who has researched Malta’s travel industry exhaustively. He has written four guidebooks to Malta published out of the UK as well as dozens of articles about Malta’s travel aspects. www.victorborg.com.

Interview TOURISM

mass

the

away from

that long guidebook of 400 pages I did not have the space to write a review of all the museums in Malta. And, knowing that a museum about traditional apparel would be one of the fringeinterest museums, I would leave it out of my guidebook, as other authors would probably do.

Malta has to move away from mass tourism as greater numbers could be counterproductive, says Victor Paul Borg. Photo: Victor Paul Borg

alta’s growth in tourism in recent years is partly due to strengths that have long been simmering: a diverse and strong product (there is plenty to see in Malta, and historical attractions have proliferated in recent years with several major restorations or opening of new sites), competitiveness and access (extensive low-cost airline network, competitive accommodation rates and restaurant prices). This is also partly due to global and regional trends: all the countries at the northern rim of the Mediterranean are seeing growth levels similar to Malta’s.

planned projects or policy directions that this government’s tourism policies begin to wobble. That’s because many of these new initiatives either display lack of serious analysis or seem discordant with Malta’s product strengths, what it is that attracts people to Malta.

The present government has maintained the momentum by continuing the thrust of the former administration, focusing particularly on retaining the widespread network of flight connections, something that has become crucial in the booming short-break European market.

The most recent of these initiatives is the announcement in the last budget that a new museum about Maltese historical apparel would be opened. I find this an oddity, if only because Malta does not have an array of historical apparel that is rich and varied enough to justify a dedicated museum: it would only be viable if it was a wing in an existing museum. It also seems like an idea taken in limbo, without consideration to the fact that there are already so many museums and attractions of the same ilk – churches, palaces, historical parks or forts – that it’s impossible for a visitor to see them all.

This government has also simultaneously taken some new initiatives, seeking to create new sectors or attractions or replicate the traditional sectors in new areas. And it’s in these new

I have written several international guidebooks to Malta – and dozens of articles about Malta published around the world – including the longest guidebook ever written. But even in

Other initiatives also strike me as odd. These include the idea of developing a cruise liner terminal in Gozo, ostensibly for so-called boutique cruises. I see two fallacies with this potential project. The first is that it’s unlikely that there will be enough volume to make a cruise liner terminal in Gozo viable: my inkling is that the single company that has shown initial interest in building a cruise liner terminal will eventually pull out. Also, I don’t see why Gozo needs cruise liner tourists. These are low-value, mass tourists, not different than the day-trip tourists that already invade Gozo and yield very little. Gozo needs tourists who sleep over on land, and in this sense it is a small single space that can build its own distinct tourism industry based on its particular strengths, and not by replicating the infrastructure of bigger places in miniature. There has also been the idea to build a trio of hotels on the coast in the south of Malta, presumably resort hotels targeting people travelling for sun and sea. This idea seems to have been abandoned for now, replaced by plans to build a university. Perhaps talk of these hotels was a ruse to make the eventual choice of university more politically acceptable. In any case, this particular stretch of coast is not that attractive for sun-and-sea tourists – it’s hard to see how all-inclusive resort hotels would be able to compete with similar outfits in other places in Malta and the wider Mediterranean. Unless, of course, government’s intention is to urbanise that part of the coast and create another unsightly, low-standard Bugibba. I can understand the government’s eagerness to channel some economic headwind to the southern portion of the island to its traditional electoral strongholds, but this is best done by focusing on the strengths of Malta’s south: the attractive, charming traditional towns (particularly Zurrieq, Zejtun, and Marsaxlokk) which have great churches and charming old

Money / Issue 31 - 11

Interview TOURISM

quarters, and are situated amid a scattering of attractions (Medieval rural chapels, dramatic coastlines, the fishing harbour of Marsaxlokk). The obvious potential here is the conversion of old buildings in the old quarters into boutique hotels and ancillary services – restaurants, shops, cafes – and the government can trigger these developments by creating incentives and policy support. I think one of the reasons why such ideas remain dormant is because the building developers have been dominating the discourse under this government, and there is more money to be made from the construction of new large hotels from scratch than conversions of old palaces or townhouses. Yet another idea has been to permit the building of boutique wineries in the countryside, which is not necessarily a bad idea, especially if the winery would be part of a larger agritourism project. Planning policies have already been formulated to allow such developments, and although agritourism sounds good in principle, the idea of erecting more buildings in the countryside is unconvincing given that the countryside in Malta is basically adjacent to built up areas. Within this context, the agritourism projects that would have a guesthouse could have the guesthouse in existing buildings. This is especially the case in Gozo, where small villages are surrounded by rural land, and where there are many old houses on the fringes of villages that are derelict and crumbling – these old houses could be converted into the accommodation outfits for agritourism projects. The development of a niche agritourism industry faces other hurdles in Malta: the countryside is small and fragmented and there are no rich cottage-farming traditions as in other places such as Italy for instance. Moreover, agritourism is unlikely to thrive for as long as hunting remains as intense as it is now. Many people in Malta and within government seem to be in denial about the obnoxiousness of hunting and trapping to the kind of people who are potentially interested in countryside immersion or the outdoors generally.

CONTEMPORARY DANCE In a contemporary adaptation of Mallarmé’s 1876 L’Après-midi d’un Faune and Debussy’s 1894 Prèlude a L’Après-midi d’un Faune, ŻfinMalta Dance Ensemble tells the story of a faun’s encounter with the Ogygia-based Calypso. Like the sources that inspired it, Je

12 - Money / Issue 31

”Malta is now beyond the lowyielding, sun-andsea, all-inclusive resort tourism of yesteryear.” By now you can discern the theme that is emerging in this article: ideas and initiatives that are successful and socially-congruent are ideas that arise out of the country’s strengths, not haphazard ideas that are not transposable. It is instructive to keep in mind that the numbers of tourists have swelled to the point that greater volumes will become counterproductive, and put unbearable strain on society and environment. This means we can now be choosy: we can choose growth areas that have low impact on society and culture, growth areas arising from our strengths in culture and history primarily. Anyone with an understanding of global tourism can discern that Malta’s strengths are its culture, history and some niche outdoor activities. Malta is now beyond the low yielding, sun-and-sea, all-inclusive resorttourism of yesteryear. Likewise, clarity about Gozo is needed as there are many voices advocating things that make little sense within Gozo’s tourism context. There has been a lot of talk over the years about attracting wealthy tourists to Gozo, and this has led to clamour from certain self-interested sectors of Gozo’s tourism operators to build a golf course, open a casino, and the never-abating talk about constructing an airstrip. But none of this is going to change Gozo’s main allure as a family-friendly destination for middle class families originating in Europe, as well as a niche destination for some other types of visitors (scuba divers, people on weekend retreats). Having an airstrip is not going to be of any help to the type of tourists that Gozo

attracts, and the volume of air-passengers to Gozo is never going to be high enough to make flights frequent enough for much of the year to be of much use to most tourists (tourists wouldn’t want to spend two or three hours waiting for a connecting flight to Gozo when they can arrive in Gozo by ferry at a lesser cost in the same time span). Yacht marinas would be a boon for the kind of tourists with second homes that Gozo can attract, but locations are scarce: there are very few harbours that aren’t exposed to strong waves on windy days, and since those few inlets double as family beaches it would anti-social to turn family beaches into yacht marinas. The swell in Malta’s volume of tourists for several years in a row might have instilled an element of conceitedness and selfcongratulation, but a bit of soberness and clear sight is in order. Anyone who works in the travel industry internationally, as I do (I write about international travel), knows that the increase in tourism numbers is a regional phenomenon in the northern Mediterranean countries – Spain, Italy, Cyprus and Greece have all been experiencing similar or proportionally larger increases in tourist numbers in the past few years as Malta – and this has less to do with what any of these countries are doing and more to do with regional and global situations. Europe’s economic woes in recent years have made nearby destinations in the Mediterranean more affordable to Europeans than long-haul destinations, and the current bout of instability has also led to more holidaymakers to opt for countries that are deemed safe and stable. But eventually, the situation will change, and Malta, like other countries in the north of the Mediterranean, might then experience a contraction in tourist volumes. So now is the time to build on our strengths and improve the overall product to create added value so that when and if the contraction in numbers comes, the country can retain the same yield or even improve it.

Tiens la Reine assimilates the suggestiveness of poetry and music and is interwoven with rituals, quests and regressions that are represented through an intricate dance choreography by Mavin Khoo, accompanied by a resonant composition by Renzo Spiteri and a narrative adaptation by Giuliana Fenech. Je Tiens la Reine is at the Argotti Gardens, Floriana on July 15-16 at 9pm. Entrance: €15, concessions, €10. For more information visit www.zfinmalta.org.

Photo by Emma Tranter.

Money / Issue 31 - 13

IN MEMORIAM

Michael REFALO A TRIBUTE Money remembers the late Dr Michael Refalo: a family man, politician and true gentleman.

orn in Sliema, Dr Michael Refalo was politically involved in Malta’s campaign for independence. He was elected with the Nationalist Party for the first time in 1971 and in subsequent elections until 1998, serving as a member of Parliament for 33 years. In 1987, Dr Refalo was appointed parliamentary secretary for tourism, a post to which he was reappointed in 1992. In 1995, he was appointed minister for justice and culture and in 1998 minister for tourism and culture. Between 1972 and 1980, he was editor of Il-Mument. In 2005, Dr Refalo was appointed Malta’s High Commissioner to the UK, a post he held until October 2008. During his term, he invited ambassadors and High Commissioners in London, representing their countries, to come for a short holiday in Malta, which for many of them was the first time they had visited the island. He was then appointed chairman of the Commonwealth Secretariat’s executive committee. He was made companion of the National Order of Merit in 2007. Dr Refalo has published My Century, an adaptation into English of Herbert Ganado’s Rajt Malta Tinbidel. He was married to Blanche Smith and they have a son and three daughters.

THE POLITICS OF INTEGRITY Dr Simon Busuttil Leader of the Nationalist Party and Opposition leader The word which kept cropping up in conversations about Dr Michael Refalo after his death was “gentleman”. That’s the wisdom of crowds, perhaps, and the aspiration many people now yearn for in our political scene. Politics in the 1970s and 80s in Malta were rough. The fundamentals of democracy and liberty were being attacked and physical violence was used as a political weapon. Yet Dr Refalo, together with a whole host of Nationalist politicians of the time, beat the violence with reason and, after 1987, gave Malta a vision for its politics and economy. In Dr Refalo’s particular case, that vision was for tourism to move away from haphazard development to better quality.

14 - Money / Issue 31

Dr Refalo’s service to our fellow Maltese and Gozitans was well-rounded: from student politics to journalism; from leadership in tourism to justice, youth and culture; from diplomacy to his adaptation of Herbert Ganado’s Rajt Malta Tinbidel; he wasn’t just a politician. He had what one can call hinterland, that ability to be engaged in many ways in life and within our society; to go beyond politics. Upon his death, many people commented that Dr Refalo brought integrity and honour to the political class in his many endeavours. That’s his true legacy, apart from our continued success in tourism. We need politicians who are in politics not just for politics’ sake. In our politics today and tomorrow, we need the honesty, gentlemanliness and integrity Dr Refalo stood for in his life.

BUILDING A NATIONAL LEGACY Karmenu Vella European Commissioner for Maritime Affairs and Fisheries The passing of Dr Michael Refalo was a sad moment for me and for Maltese society. I had a very good relationship with him, not because of me but because of him. It is a huge loss as he was a real gentleman. He was always motivated to do what was best for Malta.

was how he rose above partisan politics. This was reflected in his willingness to mentor those politicians or journalists coming through. He understood, with modesty and understatement, that passing on his experience would benefit Maltese society.

Personally speaking, I did not lose a political adversary, but I lost a friend. We always respected each otherâ&#x20AC;&#x2122;s opinion and always worked together. I still remember one event when he jokingly invited me to do a discussion at the Sliema Nationalist Party Club. I took up the joke and immediately accepted. And we did it.

Dr Refalo was particularly invested in developing our tourism sector. Even when I was minister and he was shadowing, I used to invite him to events, even if it was something simple like cutting a ribbon. He had a strategic vision to develop the sector and he had the drive, not just to implement that vision, but to inspire others to join him in doing so.

Dr Refalo was passionate about building a wider national legacy rather than a personal one. That

Money / Issue 31 - 15

IN MEMORIAM

GENUINE PASSION Alfred Pisani Founder of the Corinthia Group of Companies I knew Dr Michael Refalo for many years, since Corinthia has always been in the hospitality industry and he successfully occupied the position of minister for tourism for many years. He was knowledgeable and enthusiastic with his ministerial portfolio and his extrovert character fitted in perfectly with this role. He was never at a loss for words and was an excellent and witty speaker. He always showed a genuine and deep passion for the industry and was constantly stressing that we needed to improve our product and to aim for a higher spending tourist and not only focus on numbers. He kindly agreed to preside at the closing ceremony of the Corinthia Palace Hotel, a distinction which he claimed was a first for a minister for tourism, and was still in office at its reopening after refurbishment. His support and guidance have been exemplary and I’m very sorry that his expertise is no longer available.

A MAN OF HONOUR Ian Ciappara B.Sc. Hotel Mgmt. (Bournemouth) M.Sc Int. Tourism Marketing (Surrey) General Manager, Starwood Hotels and Resorts, W Bogota, Colombia

My first direct encounter on a professional basis with Dr Michael Refalo was back in the summer of 1990 when I was asked to visit his offices after I had graduated a couple of years earlier with a Masters Degree in international tourism marketing from the University of Surrey. I already had a lot of admiration for Dr Refalo as a politician and as a parliamentary secretary for tourism. This first encounter confirmed the fact that this was a man with whom I could work and most importantly learn from and assist in achieving his vision for the Maltese tourism industry. Our relationship developed from working together on positioning the Mediterranean Conference Centre as Malta’s foremost convention centre, a brief period at the Malta Tourism Authority offices in Malta and onto an overseas posting as MTA Director for Italy based in Milan, we kept in close contact even as my career progressed within the industry both in Malta as well as internationally. Dr Refalo was a great listener, advisor, mentor and most importantly a man of honour with an incredibly strict code of ethics and an obsession for proper and correct timekeeping. He had such a clear vision of

where and how the industry should grow, the benefits that it should achieve, the wealth that it would create, and how that wealth should be distributed fairly. The most inspiring conversations I’ve had with Dr Refalo was when he talked about education and most importantly when he talked about the growth and expansion of the Institute of Tourism Studies that he founded in 1988. His objective was to create a good and solid education base as quickly as possible for what he had in mind: the opening of a number of new five-star hotels flying the flag of global brands such as Westin, Hilton, Radisson SAS and Corinthia. We were all worried about the potential oversupply in five-star hotel beds as all the new hotels were opening mostly during the period 1996 to 1999, but I remember him telling me, “Let’s build the right product and they will come.” He was right. I believe Dr Refalo oversaw some of the largest yearon-year growth in tourism figures ever recorded and the fastest growth in five-star hotel beds. I will always remember Dr Refalo for his kindness, intelligence, honesty and caring nature. It was never about himself – it was always about others and serving his country in the way he knew best. I thank him for the 15 years of friendship.

Time to un-hear the difference. Time to un-hear the difference. Sound absorbing Islands Sound absorbing Islands

Silent Wall Silent Wall Acoustic barrier Acoustic barrier

BLA! RBLA! ING! BLA! RBLA! ING!

R IN G ! RING! RING! R IN G ! RING! RING!

Footstep noise isolating flooring Footstep noise isolating flooring

Concentration Pod Concentration Pod

Studies show that 70% of employees believe would Studies that showtheir thatproductivity 70% of employees be higher if their was less believe that their environment productivity would noisy. 60%if agree that noise is the be higher their environment wassingle less most distracting factor in their office. noisy. 60% agree that noise is the single

Get 20m2 of free acoustic ceiling trial. No costs. No infrastructural changes. Get 20m2 of free acoustic ceiling trial. No costs. No infrastructural find out how at: changes. www.dex.com.mt/acoustic find out how at:

most distracting factor in their office.

www.dex.com.mt/acoustic

Companies like Ernest & Young, Air Malta, PTL, Bettson, PBS and Aragon House trust Dex as their Companies like Ernest & Young, Air Malta, PTL, preferred partner on acoustic solutions. Bettson, PBS and Aragon House trust Dex as their preferred partner on acoustic solutions.

*Terms and conditions apply. *Terms and conditions apply.

DEX Workspaces · Mdina Road, Qormi QRM 9011 www.dex.com.mt · info@dex.com.mt DEX Workspaces Mdina Road, Qormi QRM 9011 2277 3000 · 9916 ·3266 www.dex.com.mt · info@dex.com.mt Money / Issue 31 - 17 2277 3000 · 9916 3266

IN MEMORIAM

tourism, and later on minster of tourism. Under his leadership the tourism industry flourished and maybe one of the best things he did was the setting up the Institute for Tourism Studies. Nowadays this is a pillar of the tourism industry as it is the foundation for the training of young people to go into the tourism sector, well prepared to deal with our guests.

AN HONEST MAN Winston V Zahra Chairman, Island Hotels Group I had known Dr Michael Refalo since the late 1960s when I left my teaching profession and embarked on a new life by going into business. Dr Refalo was then a budding young lawyer and politician in the making. As a lawyer he was always there ready to give me, a young freshman to business, all the advice and legal help needed to start up a company. During this period he helped me in no mean way to build a strong foundation for our business. This was my first experience with Dr Refalo and from day one I could see that he was a gentleman of the first order. What had struck me the most was his sense of honesty as well as his attitude of calling a spade a spade. Dr Refalo forged forward in his political career and he became first, parliamentary secretary for

During my three-year period as president of the MHRA I had the opportunity of working very closely with Dr Refalo. Throughout this period I found him always to be a good listener, maybe at times very difficult to convince, but once convinced he always took the necessary action, always for the benefit of the tourism industry, which became so important for our economy. It was from this period that we became friends, also with his charming wife Blanche, who undoubtedly was the lady behind a great man. When Dr Refalo left politics, our friendship developed further and on many an occasion he and his wife joined us on a number of holidays. It is during these times that his great sense of humour prevailed. It is many a time that I could not find an answer to his humour. It was very sad for us to see him fade away in the last weeks of his life. Dr Refalo is now gone but he will definitely be remembered for his love of Malta, his hard work as a politician as well as in the literal field, his great sense of humour and finally as a gentleman of the old school.

ACHIEVING THE IMPOSSIBLE Bernard Hamilton First Counsellor, Embassy of Malta, Beijing Dr Michael Refalo was a gentleman among gentlemen, a very hard working and fair High Commissioner to the UK who believed that together we could achieve the impossible. And we did. He truly loved Malta, the Maltese and our rich history. He appreciated the good things in life and always underlined the importance of family. He will be dearly missed by one and all.

18 - Money / Issue 31

TURN IT DOWN Cramped office spaces, the popularity of the open-plan design, and proximity to heavy traffic allow excessive and loud noise to build up around you. Over a typical eight-hour workday, constant exposure to noise sends concentration levels crashing to the ground and causes stress levels to spike. The result is that team members are anxious, irritable and more error-prone in their work. Instead of talking to each other, people use earphones and chat while calls with clients are cut short or suffer from miscomprehension. The damage caused by excessive sound levels can also manifest physically through headaches, breathing and sleep problems. The compounded effect of workplace noise leads to loss of productivity and money. Acoustics is probably the most complex facet of office space design because the technical challenges of optimising sound levels vary wildly from space to space, as do the choice of materials and design details required. This is especially critical for open-plan offices. Investing in quality office acoustic solutions and noise-proofing workspaces yields important health benefits for the people working there, as well as long-term returns for the organisation. Acoustic products are highly-regarded by professionals who want to craft the perfect spaces for their clients. Office soundproofing solutions include acoustic desks, partitions, sofas, walls, floors, floating panels and ceilings that cut down noise. Sporting subtle yet striking designs each product is engineered to act like an acoustic shield that absorbs excessive noise and dampens reflective sounds. Your team members will finally be able to work in productive silence, hear customers clearly on the phone, hold meaningful conversations at the next meeting, kill distractions, and enjoy better privacy. For more information visit www.dex.com.mt.

Buying, selling, or letting? It’s as easy as you imagine it to be. Make it happen fast with Belair Property. We aim to make your move as smooth and simple as possible.

Head Office 48, Msida Road, Gzira. Call. 2011 8000

PUTTING PEOPLE IN SPACE SINCE 1967

Chat with us

Use our Online Chat feature to help you find your dream property from the comfort of your home or office.

St Julian’s Office 3/4, St George‘s Road, St Julian’s. Call. 2014 8000

Valletta Office 128, St Lucia Street, Valletta. Call. 2011 8300

Email. info@belair.com.mt

Check out our New Website

Money / Issue 31 - 19

www.belair.com.mt

Interview URBAN

WATCH THIS

] GREEN SPACE

Good urban design is an environmental, social and economic need, Dr Antoine Zammit tells Jamie Iain Genovese. Photo: Jamie Iain Genovese

he more time passes, the more it becomes pertinent to seriously discuss the issue of development, the urban sprawl, and the conservation of green spaces. Given the rate of construction and development in Malta and the constant threat under which outside development zones survive, a conversation must be had, preferably one that includes the phrases ‘green urbanism’ and ‘vernacular architecture’. Taking part in this conversation is Dr Antoine Zammit, an architect specialised in urban design and founder of Studjurban. This architectural and urban design consultancy was founded in 2012 with the clear intention to integrate design, research and policy-making. Today, Studjurban is involved in fields of spatial planning, urban design, sustainable rehabilitation and green new-build architecture, undertaking a number of projects of varying scales in collaboration with foreign offices. Studjurban is also engaged as a consultant to the Malta Environment and Planning Authority for policy revisions as well as

20 - Money / Issue 31

in the formulation of new national policies and guidelines in urban design. But let’s start with the easy stuff: vernacular architecture. What is it? In simple terms, vernacular architecture is, as Dr Zammit interprets it, architecture that seeks to remain true to its specific local context, to contribute to its local distinctiveness. It grows out of the particular site conditions in terms of materials, topography and climate. This, of course, doesn’t mean trying to recreate the vernacular of yesteryear with modern techniques or trying to copy something that was good because of what it was, when it was. Vernacular architecture is, one could suppose, the spiritual opposite to the appropriation of an imported aesthetic. It’s not living inside a magazine – it’s curating it. But what’s the local scene like? Is everyone just recreating a Pinterest board? Do we fly some Ikea in and call it a day? Well, apparently not. At Studjurban, they’re finding a greater need to rehabilitate older properties.

“There appears to be a newfound demand from younger couples to have their own small home, with ancillary outdoor space and are therefore increasingly opting to purchase an older house and rehabilitate it,” says Dr Zammit. “When we are assigned such a task, we go beyond the restoration, structural alterations and interior design – we actively ensure that through our interventions we provide an added value.” That’s not an easy thing. But is it green? The short answer is affirmative. The longer answer is that, “Faced with important environmental challenges, which we are all aware of, we seek to create nearly zero-energy buildings, not least due to the EU’s energy targets that as a country we need to achieve. A new staircase becomes an opportunity for it to double up as a strategically located chimney, from which we allow hot air to escape and draw cooler air through the building. The

“THE TRUTH ABOUT GREEN SOLUTIONS IS THAT THEY’RE ONLY SOLUTIONS IF THEY ARE ECONOMICALLY VIABLE, AND THEREFORE, ACCESSIBLE.” design of new internal courtyards at different temperatures – due to different degrees of sunlight penetration – allows for them to work as a system and facilitate cross-ventilation. This is the direction we should be taking and constitutes an integral part of green urbanism.” Quite possibly, the key element here is green urbanism. This is the only way communities can move forward, now and in the future. Within the Architects’ Council of Europe – for which Dr Zammit has recently authored a salient publication – there’s the acknowledgement of a need to recognise responsible design among architects, planners, urban designers, engineers, and their ilk, a responsibility that everyone involved owes civil society at large. From the macro to the micro, from urban spaces in a city to the individual building, this direction in urban design aims to efficiently use available resources at hand, taking into consideration climatic-related issues to waste management to ensuring a well-thought out network of open spaces supplementing the urban areas. A key aspect is turning outputs into inputs and creating closed-loop systems, this is an objective that is being increasingly advocated by a growing number of cities. How does this translate in Malta? Which trimester has green urbanism reached here? Not far along, but there is hope. On a slightly more individual level, architects are becoming more aware of the need for green design. But even at this level there’s more concern for

producing energy than conserving it, just like when a house is built using traditional systems and with inferior insulating methods but then we turn to using PV panels to compensate, when it would be obviously far easier to build buildings that demand less cooling and heating and can return excess PV panel energy to the grid or even stored for domestic use. What about the big picture – how does that look? It seems to be, apparently, “fragmented, piecemeal”, and teeming with short-term goals and objectives but rather lacking in frameworks and plans that go beyond the five-year terms of elected governments. “This also necessitates a closer working relationship with all sectors of society – an inclusive approach that is steered by professionals who have a technical capacity,” says Dr Zammit. It is, quite possibly, the only way to reap longlasting benefits of greener design. Now, the thing is, while all this can sound fantastic on paper, the truth about green solutions is that they’re only solutions if they are economically viable, and therefore, accessible. Of course, there’s always talk about the three pillars of sustainability: the economic, the social, and the environmental. “Time has shown that the pendulum has more often than not swung in favour of the economic pillar, at the expense of social issues

LOOK SHARP BOSS builds its latest collection around an aspirational archetype with a downtown cool. Tailoring is a strong category for BOSS, so naturally there are beautifully cut pants. BOSS also continues this idea with fresh styling. A simple t-shirt gives suiting a dressed-down look, made distinctive by a keen sense of colour: azure blue paired with off-white. Around those pieces other markers of casually elegant men’s dressing are assembled: two-

– such as social inclusion – and certainly at the expense of the environment,” says Dr Zammit. This is especially true in cases of great short-term gains and dubious long-term sustainability. It’s becoming more evident that focusing on creating a stable and inclusive society as well as a quality urban environment – while not forsaking the economic pillar – can create, to quote Dr Zammit, a more “robust, resilient, and qualitative society”, one in which citizens can participate and realise that they form an intrinsic part of their society. In other words, businesses, developers, planners, and everyone involved in anything bricks and mortar could stand to gain by suffering a thinner profit margin if it means carrying a long-term growth in truly sustainable development. In parallel, while money is important, a real business understands that in the 21st century you have to sustain losses if it means you will manage to keep viable relations in the globalised economy. This is equally true in urban planning, where the land and the people who live there are your viable relations in the globalised economy, where that irreversible squeeze of profit just might be poisoning the well. At that point, investors won’t invest and buyers won’t buy, the reason being that the benefits of good urban design are many and, sadly, often unseen. Good urban design improves the quality of life. The implications of the latter are various: a more productive workforce, further investment, and more marketable properties. This is neither an extra nor a luxury – it’s an environmental, social and economic need that allows cities to coexist with the natural environment and become more than a sustainable pipe dream, providing a significant step forward for consumer, developer and citizen alike.

toned lightweight coats, leather varsity jackets and light wool polo shirts. Houndstooth plaids, herringbone weaves, and Breton stripes make sharp looks unexpectedly buoyant. The collection also introduces honeycomb knit V-neck sweaters and loafers in suede skins treated to take on an antiqued patina. The summer 2015 menswear collection is available at the BOSS Stores, Malta in St Julian’s and Gate 1, Departures Lounge, Luqa Airport. For more information call on 2202 1000. The St Julian’s store is open Monday to Saturday from 10am till 8pm and the airport store is open daily.

Money / Issue 31 - 21

Financial Innovation - more than just banking. Financial Innovation - more capital than just banking. Alternative funding through markets. Alternative funding through capital markets. Financial Innovation - more than just banking. Alternative funding through capital markets.

At Sparkasse Bank Malta plc we understand the importance for firms to access capital markets. Capital markets exist to provide alternative funding to business and industry. This is why we put At Sparkasse Malta plc we understand the importance to access together teamsBank of experts competent in assisting and guidingfor youfirms to this market.capital markets. Capital markets exist to provide funding to business and industry. This is why we put Private Placement Bonds, Equityalternative listing or securitisation - we can help. together teams of experts competent in assisting and guiding you to this market. Private Placement Bonds, Equity listing or securitisation - we can help. At Bank Malta plc we understand theand importance for firms access Bank capital markets. ForSparkasse Private and Corporate Banking, Wealth Management Fund Custody, talk toto Sparkasse Malta plc. Capital exist to provide alternative funding to business and industry. This is why we put Call +356markets 2133 5705 or email us on info@sparkasse-bank-malta.com. together of experts competent in assistingand andFund guiding youtalk to to this market.Bank Malta plc. For Privateteams and Corporate Banking, Wealth Management Custody, Sparkasse www.sparkasse-bank-malta.com Call +356Placement 2133 5705 or email usEquity on info@sparkasse-bank-malta.com. Private Bonds, listing or securitisation - we can help.

www.sparkasse-bank-malta.com Sparkasse Bank Malta plc, 101 Townsquare, Ix-Xatt taâ&#x20AC;&#x2122; Qui-si-Sana, Sliema SLM3112, Malta Sparkasse Bank Malta plc is licensed and regulated in Malta by the Malta Financial Services Authority (MFSA) For Private and Corporate Banking, Wealth Management and Fund Custody, talk to to provide Banking, Investment and Custody services.

Sparkasse Bank Malta plc. Sparkasse Bank5705 Maltaorplc, 101us Townsquare, Ix-Xatt taâ&#x20AC;&#x2122; Qui-si-Sana, Sliema SLM3112, Malta Call +356 2133 email on info@sparkasse-bank-malta.com. Part of the Austrian Savings Banks - Banking since 1872

Sparkasse Bank Malta plc is licensed and regulated in Malta by the Malta Financial Services Authority (MFSA) provide Investment and Custody services. 22 to - Money / IssueBanking, 31

www.sparkasse-bank-malta.com Part of the Austrian Savings Banks - Banking since 1872

REAL Interview ESTATE

GROWING DEMAND There is increasing confidence in the local real estate market, which augurs well for the near future, says Kevin Buttigieg, CEO and Managing Director, Re/Max Malta.

ollowing a slow period due to the global recession, the local real estate market recovered its position and is now enjoying substantial growth. This is fuelled by the demand of foreign nationals who, encouraged by the good performance of the local economy, are settling down in Malta to live and work. There is also increased interest from local buyers, who are acknowledging that investing in real estate carries significant potential for good returns. “We are seeing growth in all sectors, both residential and commercial,” Kevin Buttigieg, CEO and Managing Director, Re/Max Malta, says. “This is reflected in our statistics, which show a 125 per cent surge in sales volume and a 67.8 per cent increase in promises of sales filed.” The first-time buyers market has always been a stronghold for Re/Max Malta. “This is one of our strongest markets,” says Buttigieg. “Young couples and individuals who are interested in investing in their own home are encouraged by the fact that there is a competitive market with plenty of offerings for all budgets. Moreover, government’s initiative for first-time buyers to be exempt from stamp duty for a property not exceeding €150,000 in value has encouraged a lot of buyers. “This confidence in Malta’s real estate market can also be seen in the secondtime buyers market. These buyers include families who are growing and need a bigger space. There are also couples that have saved some money and now want to move to a bigger home or a more upmarket one. In fact, there is also an increased demand for high-end property from buyers who want to enhance their lifestyle.” The growth of the local economy, especially in sectors such as iGaming and financial

due to companies moving into Smart City and Sky Parks Business Centre – many individuals working in offices are also choosing to live in the South of Malta. While in St Julian’s and Sliema, rental prices have gone up by a good 20 to 30 per cent in the last years, in St Paul’s Bay, you can still rent a good property for a cheaper rate.

Kevin Buttigieg

services, is also boosting demand from foreign nationals. These are attracted to Malta because of the good career opportunities on offer, but also because Malta has it all, from a wealth of culture and history to great entertainment, excellent weather and a safe environment. “Foreign nationals have also encouraged growth in the buy-to-let market,” says Buttigieg. “This is another market where Re/Max Malta is the market leader by miles, thanks to our understanding of the letting market, our strong team of letting agents and our local market knowledge of what to buy that will give a good yield on the property without any hidden costs. Our clients trust us and know we deliver and this is a market we are very confident in. People who have entered the buy-to-let market are seeing significant returns on their investment. Currently, there is a huge demand, especially because in the July to September period, a lot of properties are offered as short-lets, and therefore, the supply for long lets automatically decreases. “The buy-to-let market, especially short lets, is also fuelled by people holidaying in Malta, who maybe want to rent an apartment or house instead of staying in a hotel. This market doesn’t only cater for foreign nationals or tourists – there is an encouraging demand from Maltese clients. In fact, this market is going so strong that we have created a new website dedicated solely to short lets.” Traditionally, the more popular areas for buy-to-let investments are Sliema, St Julian’s, and in the areas surrounding upmarket developments such as Tigne, Fort Cambridge and Portomaso. These properties are rented by people who want to live in central areas and be near Malta’s entertainment hubs. However, Buttigieg says that the market is also expanding to other areas. “St Paul’s Bay, Qawra and Mellieha have always been popular for short holiday lets and are increasingly becoming popular for long lets. Prices and rates are encouraging and one can achieve a good rental return. The south of the island has also seen a surge in demand

“Our sister island has seen a huge demand from both locals and foreigners due to the tranquillity of the island and the fact that you can still buy good properties at reasonable prices. I also feel the local market went through a phase of investing in Sicily but many have returned to the idea that our little gem Gozo is a better place where to enjoy their holiday and own a home. We are predicting prices to go up steadily over the next few years in Gozo and we are in discussion of increasing our presence in Gozo.” Buttigieg says that the forecast across the board looks very bright for the future and now is the time to invest in property. “We are in a little boom which could become a large one,” he says.

“WE ARE INVESTING IN ORDER TO CATER FOR THIS CONTINUOUS GROWTH.” “We are investing in order to cater for this continuous growth,” Buttigieg says. “We have opened new offices in Naxxar and Mosta and we will soon open a new office in Sliema – this will cover the whole coast from St Julian’s to Ta’ Xbiex with Re/Max having an office on every section all the way along the coast serving our clients in these areas. We will be opening a state-of-the-art office in Valletta in the next few days as the interest here has grown tremendously. We are also planning to open one of the largest offices in Europe in the next few months. “We also invest a lot in our marketing programme. In fact, we have just introduced a new marketing initiative: we style a property, take professional photos and market it on various media platforms. This benefits both the seller and buyer: sellers can benefit from having a property showcased in the best possible way at no extra cost, and potential buyers can see what their home can look like. This initiative has been so welcomed that we calculate that we sell such properties in an average 38 days. “The most important investment, though, is in our people,” Buttigieg adds. “We make sure that all our 264 associates – a team which is two and a half times in size to that of our nearest competitor – are all knowledgeable and receive continuous training. That shows our strength in the market and allows us to continuously gain market share.”

Money / Issue 31 - 23

BECOME AN ACCOUNTANT

INVEST â&#x201A;Ź2 PER HOUR

IN YOUR CAREER MALTA INSTITUTE OF MANAGEMENT

For more information contact: Malta Institute of Management

T. +356 2145 6819 E. info@maltamanagement.com

www.maltamanagement.com

REAL Interview ESTATE

THE

REAL DEAL Malta’s unique qualities are fuelling the growth in real estate, says Michael Bonello, franchise owner, Re/Max Alliance Tigne, Strand, San Gwann and Mosta. How has the real estate market performed in 2014 and the first quarter of 2015? Since 2013, the Maltese real estate market has been enjoying steady growth, which has continued throughout 2014 and to date. Apart from an increase in sales of both residential as well as commercial properties throughout Malta, we have also observed a slight increase in prices especially in the Sliema, St Julian’s and surrounding areas. What growth have you experienced in the first- and second-time buyers market? The first-time buyers market has always been a strong one. However, since the first time buyer tax exemption scheme came into effect, a higher increase was noticed. The second-time buyers market has also always been strong. I believe that the reason for this is that in Malta, couples tend to move from their first home to their second home after approximately five years. What attraction does real estate in Malta hold for foreign buyers? Some might say that Malta has great tax incentives, followed by a straightforward property purchase system, especially when

Michael Bonello compared to other European countries. In all fairness, this is true. However, unlike many, I don’t believe that this is what really attracts foreigners to invest in property in Malta.

growth within my parameters. However, when I see the figures of sales achieved by Re/Max throughout the years, I can safely confirm that most areas in Malta are rising steadily.

Rather, my belief is that our great history, incredible climate, safe family environment, fantastic medical care, as well as great hospitality are the main factors, followed by the fact that the majority of the Maltese are able to easily communicate in English. Another main attraction is that Malta is set in the centre of the Mediterranean with easy airport connections across the globe.

Have you also experienced growth in the buy-to-let market? The buy-to-let market has enjoyed strong growth over the past couple of years. I feel this is mostly due to the number of foreigners recruited to work on the island as well as many who are eventually hoping to retire to Malta for good.

Which areas in Malta and Gozo have the greatest potential in real estate? From the start of my days in real estate, some 15 years ago, my main focus has always been on the Sliema and surrounding areas as well as central areas, so I’m more inclined to feel

What are the prospects for the rest of 2015? 2015 has already shown that it is going to be great year for the real estate market. I feel that this is mainly due to vendors being more knowledgeable about their properties and surroundings, resulting in considerate asking prices and faster sales.

“OUR GREAT HISTORY, INCREDIBLE CLIMATE, SAFE FAMILY ENVIRONMENT, FANTASTIC MEDICAL CARE, AS WELL AS GREAT HOSPITALITY ARE THE MAIN FACTORS.” Money / Issue 31 - 25

REAL Interview ESTATE

and social sectors, Malta ticks many boxes for foreign buyers.

A CONFIDENT

Christopher Pace

MA RK ET

Which areas in Malta and Gozo have the greatest potential in real estate? In Malta, I would say the areas that are ripe for regeneration offer the greatest potential. For instance Gzira, the three cities and Marsaskala are localities in need of further regeneration. Essentially those areas that require regeneration, development, landscaping, and new businesses investment, turn into up and coming neighborhoods which are then more attractive to a wider purchasing market, including residential and commercial investment. Therefore, look out for areas in need of regeneration.

Property in Malta is a sound investment, says Christopher Pace, Chestertons Malta chairman. How has the real estate market performed in 2014 and the first quarter of 2015? We have seen the market really gain momentum from 2013 and this has continued this year, with prices increasing, on average, by 10 per cent. Finally, the financial crisis of 2008-2013, which resulted in stagnant property market here in Malta is over, and growth will go from strength to strength, thanks to a number of contributing factors including the success of the i-Gaming industry and the growth of the financial services sector. The Libyan crisis is also creating a relocation need for many expats formerly based there. In addition, the creation of medical and educational initiatives is creating more demand for property, which in turn generates more confidence and growth in the market. What growth have you experienced in the first- and second-time buyers market? We have experienced exponential growth in the first-time buyers market primarily due to the government initiative which exempts first-time buyers from paying stamp duty on the first property up to €150,000. This initiative has been so successful that it has been extended twice to enable banks and notaries to process the huge demand. In the second-time buyers market, an increase in property prices has helped existing homeowners sell their property at a good profit. This in turn creates property mobility opportunities for

those seeking to buy a second home, a holiday home, or a buy-to-let investment property. Which factors have contributed to this growth? Essentially, enabling first-time buyers to acquire a foothold in the property market is a very effective strategy for increasing mobility across the entire spectrum of the property market. In Malta this has most definitely been the case. What attraction does real estate in Malta hold for foreign buyers? Malta offers many attractive features for foreign buyers, including an English speaking environment, a well-established and effective legal system, a stable democratic government, and favorable tax structures.

Have you also experienced growth in the buy-to-let market? Rental rates have increased in central areas by 40 per cent over the last three years due to significant and ever growing demand from the overseas market. In more regional areas, rental rates have still increased but to a lesser degree. This in turn leads to more affordable areas becoming of more interest to buyers, areas such as San Gwann, Msida and Naxxar, generating growth in these areas too. What are the prospects for the rest of 2015? In my view, the market will continue to go from strength to strength as demand outstrips supply. We are now seeing many new developments on the drawing board, primarily being sold off plan to the market in anticipation of demand on the market in the coming two to three years. What does 2015 hold for Chestertons Malta? For Chestertons Malta, an international branch and company, our key driver remains exceeding our clients’ expectations, as they expect Chestertons Malta to be a class above our competitors.

Also, there is a very strong and resilient buyto-let market. Moreover, capital growth on property is increasing, so in terms of investment, Malta is a very sound choice.

By offering professional and efficient service to meet clients’ needs, we continue to strive and develop to retain our professional reputation in the market, both here in Malta and globally. Moreover, as a business we give great importance to clients referring our services to new clients – therefore, we strive for continuous improvement in service delivery and professionalism to retain a high level of referral.

Malta also offers a fantastic Mediterranean climate, is a very safe environment in which to live in, and is in the vicinity of European destinations. With first rate educational, health

A further key driver for Chestertons Malta is to continue to train, develop and support our people, without which, the business cannot achieve success and sustain growth.

“ENABLING FIRST-TIME BUYERS TO ACQUIRE A FOOTHOLD IN THE PROPERTY MARKET IS A VERY EFFECTIVE STRATEGY FOR INCREASING MOBILITY ACROSS THE ENTIRE SPECTRUM OF THE PROPERTY MARKET.” Money / Issue 31 - 27

Find us on

Facebook

REAL Interview ESTATE

WHEN

changes introduced to the capital gains tax. The feedback was very positive and in fact we had to organise a repeat session as the first one was over-subscribed.

CAUTIOUS OPTIMISM IS KEY

Ian Casolani

Ian Casolani, Belair Property managing director, outlines the property market’s performance this year. The real estate sector has been performing quite steadily over the past years. Do you think this will continue for years to come or should we brace ourselves as this will eventually calm down? The real estate industry in Malta has been going through a steady and positive growth over the past years and it looks like it will not relent any time soon. In so far as property sales are concerned, the market is healthy with an interesting mix of new developments in the usual hotspots as well as increasing interest in restored edifices in the historic parts of the island like Valletta, the Three Cities as well as some rural areas. All in all, considering Malta’s size, the majority of stakeholders in the industry all agree that the sector should continue its positive performance. Needless to say that this depends on various factors, including a stable economy and most of all, the awareness from owners not to tempt fate by being too demanding. It is imperative that now that the going is good, all stakeholders keep their eye on the objective with feet stuck firmly on the ground. Maybe it is a bit of a cliché but we need to take care of the goose which lays our golden eggs. Taking it for granted, or worse, undermining the very principles of why it is laying the golden eggs in the first place is tantamount to madness. We also need to keep in mind that what makes Malta attractive to foreigners (other than tax advantages) is the lifestyle, character and charm and ensure we don’t mess it all up with unsustainable and ill-conceived development. It has been reported several times that the rental market is booming and that the supply of properties to let is not meeting the demand. What makes a good buy-to-let investment and what are the pitfalls to avoid?

Letting has increased dramatically and the buyto-let sector is now at a stage where it is a very lucrative and safe investment with guaranteed returns. A good buy-to-let investment is when the return hovers at around five per cent or more. In so far as the pitfalls, in my opinion, it is that of not seeking an unrealistic price which risks driving your property out of the market and furnishing or styling it in line with market expectations. Being sensible will guarantee a safe and consistent return. Belair Property recently organised a seminar for property owners regarding recent changes to taxation which will affect them. What was discussed and what feedback did you receive from participants? The idea to hold this information session came about as part of the feedback our letting team gets from property owners. Undoubtedly, one can get lost in the myriad administrative processes, and we felt we should give added value to our clients by providing a free information session on these subjects. The team at Mazars did an excellent job and the number of questions proved that there was need for such an event.

An important sector which is often overlooked when discussing real estate is the commercial/ office letting and sales. How would you gauge its performance in the last 12 months? Do you think that the number of projects of office space and business centres which are expected to kick in the next five years will affect the demand and the overall price trend? The number of foreign companies in different industries opening up in Malta as well as the way local businesses have been growing over the past years have continued to establish the commercial letting and sales operation as an important pillar of our business. This good performance has led to a number of interesting developments – some of which purely businessoriented while others having a mixed-offer of retail, office and residential – which should be available on the market over the next decade or so. Yet again, a good sense of measure and keeping prices in the context of the overall market should make it viable for the sector to perform well and to reap the desired results from the investment being made. A word about your company. In the first months of 2015, Belair Property launched a new website, revamped its biannual magazine and opened a new office in Valletta. How does all this fit in with your philosophy and way of doing business? We kicked off 2015 with a number of projects which had been in the pipeline since mid-2014. We started an internal process of restructuring which is enabling us to handle the challenges ahead. The new website was a major challenge with more focus on enhancing the end-user experience while showcasing Malta as a great property destination. The same goes for our new presence in the heart of our capital city. This investment is testament to the way we see Valletta’s growing importance from a real estate perspective.

“THE REAL ESTATE INDUSTRY IN MALTA HAS BEEN GOING THROUGH A STEADY AND POSITIVE GROWTH.” The session covered various topics of relevance for these property owners and addressed issues such as taxation and licensing when renting out property. The session acted as a tutorial for those present with real life examples of different scenarios, such as when is value added tax to be levied and at what rate, the available options of how one is to declare income, the intricacies of licensing by the Malta Tourism Authority when renting out to non-residents, as well as recent

Belair Property is not about opening numerous offices, but has always been about the personal connection with our clients, quality service and efficiency. Our boutique set-up is part of our DNA and it is what distinguishes us from other agencies. Indeed, our marketing efforts are all centred on this simple message: buying or selling a property does not need to be traumatic or chaotic and we are there to assist and advise to make it as easy as you imagine it to be.

Money / Issue 31 - 29

30 - Money / Issue 31

REAL Interview ESTATE

A SOUND INVESTMENT Joe Caruana Curran, Branch Manager & Co Franchise Owner, Re/Max Executives, Ibragg, outlines market performance and expectations. What growth have you experienced in the first- and second-time buyers market? The growth in the first-time buyers market has been incredible. There is no doubt that the first-time buyers scheme launched by government had a very positive impact on all potential first-time homeowners. Essentially everybody who acquired their first property were exempt from stamp duty payment on the first €150,000. This meant that thanks to the scheme each buyer saved up to €5,250, thus gaining a significant discount on their initial expenditure. In relation to the second-time buyers, the slight increase in this sector may be twofold. Maltese in general prefer to own a property rather than rent. Firstly, for people selling their primary residence, which they would have purchased a number of years ago, they more than likely sold at a profit. This means that when looking at purchasing their new property they find themselves having more funds available, irrelevant as to whether their intentions were to upsize or downsize. Another fact to consider is that with the increase in both rental demand and the rental prices, rental property owners are finding that they have even more funds available which they can also use towards the purchase of their new home. What attraction does real estate in Malta hold for foreign buyers? Malta’s economic growth is the result of a number of factors. The steady and continuous increase in the finance and i-Gaming industries has definitely contributed towards assuring Malta’s progress in an already economically stable country. From a financial perspective, Malta has in fact been offering advantageous tax rates for foreigners who seek residency here for a number of years. Moreover, we also offer a moderate cost

Joe Caruana Curran

of living in comparison to other European destinations – this makes Malta an ideal location to settle. Another advantage is our excellent healthcare system, recognised as one of the best that Europe has to offer. Language too contributes greatly to this notion, as having the English language listed as one of our official tongues serves to encourage visitors to the extent of potentially relocating to our island. Then of course there is our rich and colourful heritage. Particularly for those who are enchanted by culture and history, Malta is a country that has to be explored. Offering a host of museums and archaeological sites which date back to the prehistoric age, it comes as no surprise that this little gem in the Mediterranean has been voted as one of the best places to retire in the world. Which areas in Malta and Gozo have the greatest potential in real estate? Our office deals with sales and rentals in Malta only and any property requirements which have to do with Gozo is catered for through the Re/Max office located on the island itself. However, Re/Max remains one group and we are all able to monitor each other’s performance. Judging by the results we see them achieving it is safe to say that the whole island is really quite full of potential. Focusing back on Malta, the

areas which have constantly been on the up stretch from Gzira all the way to Bahar ic-Caghaq. Valletta too is seeing some remarkable increase in demand, and the projection is that it will keep on doing so bearing in mind that it was chosen as the European Capital of Culture in 2018. In my opinion this will have a spillover effect on its close neighbour Floriana and in fact we are already seeing signs of a proper ‘awakening’ in that area as well. Have you experienced growth in the buyto-let market? Indeed we have. The main reason is the current rental market and the fact that it is steadily on the rise. The natural effect of that is that in turn rental prices increase and we believe that over the last couple of years this increase is somewhere in the region of 30 per cent. Already a favourite form of investment for quite some time, such a scenario has therefore given the buy-to-let market a stronger boost. Individuals who look for sound investments with an attractive return are turning their attention to this market, which incidentally is also helped by more schemes, this time offered by the local banks. This is done in light of the fact that people are interested in becoming property owners with the intention of entering the local rental market as a means of generating profit.

“THIS LITTLE GEM IN THE MEDITERRANEAN HAS BEEN VOTED AS ONE OF THE BEST PLACES TO RETIRE IN THE WORLD.” Money / Issue 31 - 31

NCPE Directory of Professional Women

60%

13%

of university graduates are women Despite the progress registered to date, women continue to be

of the Maltese members of

under-represented in decision-making and leadership positions

parlament are women

2.8%

28.6% 24.5%

of board members of the large listed

of judges are women. Women are better

companies in Malta are women.

represented in the Magistrates’ Court

The majority of women on boards are

where women account for more than half

appointed as secretaries

of the magistrates

What is the Directory of Professional Women? It is an online database with profiles of professional women from various fields and backgrounds that includes their qualifications and experience.

The Directory will empower and give more opportunities to women to be appointed to senior positions in the public and private sectors or to assume decision-making positions in the labour market. Moreover, the Directory aims to highlight the women’s achievements in the various fields of specialisation and occupations.

of the managers in Malta and Gozo are women

Who can join the Directory of Professional Women? Women who : - Have five (5) years experience in a decision-making/management position AND/OR - Have ten (10) years specialised expertise in a particular field/s.

32 - Money / Issue 31

Operational Programme II – Cohesion Policy 2007-2013 Empowering People for More Jobs and a Better Quality of Life Project part-financed by the European Union European Social Fund (ESF) Co-financing rate: 85% EU Funds; 15% National Funds Investing in your future

REAL Interview ESTATE

A GOOD YEAR This year, we are achieving our targets, says Clive Tong, sales associate, Re/Max Alliance Mosta. How did you first get involved in the real estate market? I’ve been in the catering business all my life. Then, completely by chance, I met a friend and he explained to me what property sales is all about. I got interested and started exploring the possibility of making a career change. I had also heard that the property market is quite strong, so I decided to give it a go. Today, I can say that property sales is a hard business and you have to work hard – however, it’s very rewarding. How has the market changed since you first started out? Until a year ago, when I first started out in this business, the market was strongly leaning towards buyers, especially since government had issued good terms for first- time buyers. However, in the past few months it started to lean towards sellers, meaning that the ball is now in the hands of the property owners. This can make it a bit difficult to close sales as sellers will always wait to maybe get a better price for their property. Despite the changes, has the business of selling real estate essentially remained the same?

"ALTHOUGH THE MECHANICS OF HOW TO TREAT THE MARKET HAVE CHANGED, THE FINAL RESULTS HAVE NOT.”” It was and still is a vibrant market – I cannot really say that the business overall changed much during the past year. Although the mechanics of how to treat the market have changed, the final results have not. Does your approach to first- and secondtime buyers change? Definitely. First-time buyers are usually a bit scared of making that first investment, especially since they are usually of a young age and you must treat them cautiously. Second-time buyers would have already gone through this ordeal and would be more at ease. However, second-time buyers are usually looking for a property where they will spend the rest of their life, and so they might take longer to decide what to buy. What about your approach to local and foreign buyers?

Clive Tong

Most local buyers know the market and our legal system, so it’s easy to explain certain procedures – however, that doesn’t mean that it will be an easy sale. On the other hand, most of the time foreign buyers have no idea of how the Maltese legal system works, and even more often, the Maltese system is completely different form what they are used to, so foreigners are usually approached with more caution. How do you tackle time-wasters? From experience, you never can be sure if a client is a time waster or not, so the best thing is to deal with all clients in the same way, as professionally as possible. What are the prospects for the rest of 2015? As things stand, we are achieving our targets and as long as things are keep on the right track, 2015 should be a good year.

Money / Issue 31 - 33

Interview LETTING

SPACE FOR

Innovation

Forget location: it’s all about listings, says Steve Mercieca from Quicklets Letting Specialists.

You’ve been in the business just over a year now. How would you describe the challenges of the real estate industry for a start-up company? The business has developed a lot. My first agent joined me in May 2014 and by December 2014 we had eight agents. Today we have three offices and 30 letting specialists. I would say that the biggest hurdle is the ongoing coaching of staff and teaching them our style and trends. Being a local brand, we don’t have an international franchise to turn to for coaching documents and procedures. We had to create each document and procedure as we went along. It was also a massive effort to convince agents to join us instead of our competitors while our database was a huge task. How do you keep up with the competition? There are many factors that have helped us along the way. Some of these are trade secrets that we cannot discuss publicly. However two of our main key performance indicators are definitely giving us the boost we need: these are our back-end structure and networking capabilities. The software we offer to our agents is an incredible advantage in itself and is built with a simple focus: simplicity and automation. We have built our own CRM from the ground up. We offer our agents new innovative tools on a regular basis and constant updates of existing software. Our networking capabilities started from our virtual agent concept, which we introduced. This is an affiliate system that allows third parties, not employed or linked to our website, to open their own account. Once they log into their account they can then send us telephone numbers of people looking to

34 - Money / Issue 31

rent a place or owners that have property to let. We then process their leads on a daily basis and once we close the deal they receive a cheque. Once registered, virtual agents can even track the status of their leads. It is a super innovative system and has worked wonders for the company. To date we have over 400 virtual agents registered with us. There is a lot of hype about the prices of rental properties increasing rapidly. What is your view on this? Other companies have probably seen this develop much more than us. However over the past 12 months we have seen an aggressive increase in rental prices. Some properties have had an increase of up to 35 per cent. The lower budget properties have all shot up and are all being rented immediately, irrelevant of their finishing.

Personally I think that prices will keep going up all over the island, probably not at such a fast rate. I believe that they were underpriced for what Malta has to offer and today they are being revalued to their actual price. When compared to other countries around Europe, the prices are mad. Berlin has actually announced a rent cap and Ed Miliband wanted to peg rental increases to inflation. This is just the beginning: moving forward we will see other countries starting to regularise rental income. What about people who are interested in investing into the industry: which would be the best location? We have a saying at the office: “Forget location, location, location: it’s all about listings, listings, listings.”

“WE EVEN HAVE A GREAT WALL OF IDEAS WHICH IS ACTUALLY AN INDOOR ROCK CLIMBING WALL” When it comes to rental investments what you need to look at is the annual return. We have clients coming to us asking to invest in the rental market. While they have a perception of Sliema and St Julian’s being the best locations, we advise them that Gzira, Msida and Qawra have a higher annual return. Most of the time they listen to us and we send them home with a 10 to 12 per cent return. For buy to let, location is secondary: the most important element is sale price. Also multiple small units are more profitable than one more expensive unit. Would you recommend short or long let for an investment opportunity? This all depends on how busy you are. Short lets are of course more profitable but can be very demanding and time consuming. You have to meet and greet, do the laundry and arrange cleaning services, all on a frequent basis. Long lets on the other hand are more stable. As a lessor you tend to build a relationship with your lessee. The rent is always paid one month in advance and

secured for a minimum of six or 12 months. We’ve noticed you have different way of communicating your brand. Could you elaborate on this and whether or not this has worked in your favour? When we launched the brand we had one rule: stay off corporate. We wanted to be different and build a family. Our focus is to be innovative and fun. We lead with compassion and focus on creating a great vibe within the team. The only way to keep constructive in this industry is to have a well-structured and super connected team. The office environment gives the brand identity and plays a huge role in the performance of the team. We even have a great wall of ideas which is actually an indoor rock climbing wall, the staff put up ideas on it and we pin up the idea higher each time until it is complete and the bell is rung. We have a very low turnover of staff. The potential within the company is very attractive, there is a lot of room for individual growth. We have tried to remove the red tape

for both our team and our clients: our team loves it and if the team is happy, then the client is happy. It all started from an, “I wonder if this pallet would look good on the wall.” Anything new coming up in the future? We currently have a very attractive franchising model set up for Quicklets. We plan to open at least another three branches by end 2016. We are also aiming to open a new brand focusing on high end property sales. This of course will be an entirely separate project. Look out for it, it will be called ‘Zanzi Homes’.

Money / Issue 31 - 35

REAL ESTATE

A STRONG REPUTATION We don’t just sell properties – we offer guidance, marketing and access to an extensive portfolio of properties, buyers and sellers, say Conrad Muscat, Aaron Borg, Jason Doneo and Ian Laferla from Frank Salt Real Estate. All indicators are showing that the Maltese economy is doing well, especially when taken within the context of the rest of Europe. In fact, a forecast recently issued by Ernst and Young, in collaboration with Oxford Economics, foresees a robust performance by the Maltese economy in 2015. The tourism sector is going strong and there is encouraging growth in exports. Government’s current fiscal deficit is also within the Euro Area ceiling of three per cent of GDP. The National Statistics Office has published figures showing a real growth of four per cent in the first quarter of 2015, which compares well with the average growth of one per cent registered in the Euro Area for the same period. In particular, a number of sectors are doing well, including the financial services and iGaming sectors. This is especially important because these sectors attract foreign investment as well as foreign nationals interested in working and living in Malta. This, of course, increases real estate demand. “A strong economy attracts more foreign investment, both in the form of direct investment in property, but also as foreign nationals looking at relocating in Malta,” Conrad Muscat from Frank Salt Real Estate says. “A strong economy also means greater local wealth with property being one possible investment option for such wealth.” Both the first- and second-time buyer markets have been performing well.

36 - Money / Issue 31

“There is a feel-good sentiment running locally. This, together with various initiatives introduced by the local authorities, is attracting first-time buyers,” adds Muscat. “We have also seen growth in the secondtime buyer market. This market is a varied one: you have growing families in need of more space, often a few years after the purchase of the first property. In such situations, the couple is usually in a better financial position to invest in a second larger home or possibly one in a better location or with nicer finishes. Other second-time buyers we often meet are middle aged or elderly couples wishing to downsize their property. In other situations, couples would have split and they are selling their property to buy their own.” Buy-to-let, until recently a niche market, is being acknowledged as a good investment. “With more than 24,000 foreign nationals from 150 counties currently living in Malta, the demand for rental properties has soared,” Aaron Borg from Frank Salt Real Estate says. “Many of these foreign nationals actually invest in their own property but others opt for a rental property. This has fuelled demand for rental properties. Combined with a very limited supply, this makes it a very attractive investment opportunity. “When looking at the investment potential, compared to a financial investment, the return on a rental property is superior. Interest rates

Aaron Borg

on deposit accounts are at an all time low, while rental properties fetch an average of four to six per cent return. Over and above that, you have to keep in mind that the asset itself is appreciating on an annual basis. “In terms of ideal locations for rental properties, up to five years ago, touristic areas, especially Sliema and St Julian’s, were the most popular. But the ongoing increase in demand has meant that interest has spread to also cover other areas, particularly the inner harbour and central areas. “Demand for rental investment is so strong that properties tend to rent out in less than 24 hours from becoming available,” Borg adds. Apart from the immediate returns, another advantage is that the property also appreciates on a yearly basis, with the current rate being of about four per cent per annum. This, of course, depends on investing in the right property. “Obviously not all properties in any area are good as a rental investment,” Borg says. “It’s all about the price of the property and its location to establish if the property would give a good rental return. Not all properties give the same rental return. Some give five per cent and others go up to 10 per cent. “Properties which are good for short lets can get you triple the rental return you would expect on a long let. As a company, Frank Salt Real Estate has invested a lot in this niche market, ensuring that all its team is knowledgeable on the subject. This is to ensure that proper guidance and consultancy is given to clients investing in a buy-to-let property.

Conrad Muscat

Jason Doneo

“We also have the backing of a very dynamic and aggressive team of letting consultants who offer instant valuations on properties deemed as good rental investments. This also helps rent out properties faster.”

“We have a Mediterranean climate, an English speaking population, affordable cost of living compared to other EU countries, safe family environment, relaxed lifestyle, great food, and a wealth of history and culture. Last year a Citizenship by Investment Programme was also introduced, adding to Malta’s offering to foreign nationals,” Doneo adds.”

The growth in the real estate market is fuelled by both local and foreign buyers. What are the qualities that attract a foreign buyer to invest in Malta? “In the past, Malta was mostly perceived as a destination for a holiday or to retire,” Jason Doneo from Frank Salt Real Estate says. “Today these two markets are still very active, but many are looking at Malta as an investment destination as well as an ideal option for residency status. “Malta offers a number of residency programmes targeting those who are looking for a reliable and safe gateway to Europe and taxation benefits, while enjoying a very good lifestyle in a warm and friendly country. Few other countries in the world present the mix that Malta has to offer.” Malta is also an attractive place for working and living.

“FEW OTHER COUNTRIES IN THE WORLD PRESENT THE MIX THAT MALTA HAS TO OFFER.”

The future looks bright. “I think that in the immediate future this will just carry on increasing with more foreign nationals wanting to live on our beautiful island and property will remain strong in value,” Doneo says. Ian Laferla from Frank Salt Real Estate agrees. However, more quality residences are needed. “We have an interesting mix of properties to offer to foreign clients eyeing Malta,” Laferla says. “However this is not enough, particularly if the level of demand keeps growing at the current rate, both for properties for sale and to let. We need more quality residences with high finishes and spacious layouts. We need to retain a good balance between upmarket properties that meet the demand of foreign clients as well as second time buyers, along with quality properties commanded by the first-time buyer market.” Frank Salt Real Estate is being constantly recognised and awarded as Malta’s best real estate agency. What are the qualities that earn the agency such accolades? “Our values and professionalism are the key drivers,” Laferla says. “We have been around

Ian Laferla

for 45 years, during which we have built a very strong reputation for trustworthy service. We measure our success through satisfied clients and not through the number of offices that the company operates (although we still have 14 of these). Our company makes sure that high standards based on a strict policy of honesty and integrity, which have been passed down by Mr Frank Salt since 1969. “We also invest heavily in training. We are on the constant lookout for more property consultants and we also offer very good conditions to attract the best agents on the market, as well as newcomers who wish to embark on a career in real estate. Having said that we make sure that only quality consultants join the company, ones that share our values and who have a passion for property and a flair with people. These are key to our success, both for us as property consultants as well as for the company,” Laferla adds. “We also have unique service propositions. Our clients have access to a very extensive database of properties to choose from. They can make use of any of our branches and the company offers a one-stop-shop service. We don’t just sell a property, but practically offer full guidance on all related matters. We offer vendors very aggressive marketing, both local and foreign and ongoing feedback. Moreover, no other agency in Malta reaches the volumes of foreign clients that Frank Salt Real Estate does.” For more information visit www.franksalt.com.mt.

Money / Issue 31 - 37

Interview PROMO

SHARING VALUES AND TRADITIONS

Photo: Jamie Iain Genovese

38 - Money / Issue 31

Sylvie HénonBadoinot visits Malta to join in P Cutajar’s 150th anniversary celebrations.

his year, one of Malta’s longest standing family businesses, P Cutajar & Co. Limited, celebrated its 150th anniversary.

It all started in 1861 when Paul Cutajar set up a trading business operating from his residence at 20, Strada Reale in Valletta. He initially imported wheat and cereals and was also active in the coal trade. He prospered and in 1865, he changed the name of the firm to P Cutajar & Co. The firm expanded rapidly and reached several important distributorship agreements, some of which still exist today. Today, 150 years later, the company’s main focus is the distribution of consumer goods, including chocolate, coffee, ice cream, water, wines and spirits. One of P Cutajar & Co. Limited’s strongest relationships is with Bacardi-Martini, the largest family-owned spirits company in the world. Bacardi-Martini has a portfolio of more than 200 brands and labels and has been family-owned for seven generations. Sylvie Hénon-Badoinot, Bacardi-Martini vice president and managing director for Southern Europe, travelled to Malta to join in P Cutajar & Co. Limited’s celebrations. “Our relationship with P Cutajar & Co. Limited is very strong,” she says. “Like P Cutajar & Co. Limited, we are a family business and therefore understand each other well.” Like P Cutajar & Co. Limited, Bacardi also recently celebrated its 150th anniversary, three years ago. “We believe in long-term relationships and that is exactly what we have with P Cutajar & Co. Limited. In fact, we have worked with different generations of the company, building a strong relationship and trust over the years.”

Hénon-Badoinot started working for Bacardi-Martini in 1997 as a country manager. Nowadays, she is responsible for the southern Europe region – her role entails building and sustaining relationships with distributors in the region and working closely with them. “When working with a family business, you acquire certain values. Moreover, you share experience and understanding and face similar challenges: I believe family businesses are more agile and have more passion. This passion is translated into brands and products.” Similarly, a consumer invests passion in building a relationship with a particular brand. Memories, experiences and emotions – they all inspire consumers in their choice of drink. “Not all consumers are the same,” says Hénon-Badoinot. “That is why it takes us a lot of time to build a brand according to our values and to consumers’ tastes. Grey Goose, for instance, is one such example. The group bought it in 2004 and since then, we have carefully developed it into a superpremium vodka. We are also very careful in placing a brand. Martini, for instance, has the qualities of a wine as well as of a spirit: we harvest like wine but market it as a spirit.” Hénon-Badoinot is also the president of the French Federation of Spirits. “My role at the French Federation of Spirits is to preserve the industry’s interests and lobby on various fronts. For instance, we lobby a lot in favour of risk prevention. Currently, alcohol tax revenues in France is around €3bn. However, the French government only invests €5m in risk prevention. We are lobbying in favour of a greater spend on risk prevention as we feel that it is our responsibility.”

“WE BELIEVE IN LONG-TERM RELATIONSHIPS AND THAT IS EXACTLY WHAT WE HAVE WITH P CUTAJAR & CO. LIMITED.” Money / Issue 31 - 39

40 - Money / Issue 31

Interview BUSINESS

In part fulfilment of his Honours degree at the University of Malta, Shaun Galea completed a dissertation based on the local rental property market. In his dissertation, Galea’s main objective was to examine and focus on the relationship between business model innovation and the rental property market.

TURNING

DEMAND AND SUPPLY INTO OPPORTUNITIES

What are the elements that give an organisation competitive advantage in the rental property market, asks Shaun Galea.

he rental property market has experienced an exponential growth in demand, which is fuelling significant increases in property prices. This has been the result of a combination of elements: foreign direct investment, government incentives and Malta’s unique, natural offerings. The significance in demand as opposed to supply has led to a complex and competitive market, which also created a buy-to-let market. How can an organisation turn demand and supply challenges into opportunities to achieve a competitive advantage? My research was based on three local real estate agencies with distinct approaches to the rental property market and six customers. The study identified four key elements as the primary drivers for business model innovation in the market: customers, technology, business infrastructure and finance. It can be argued that innovation is a very important factor for all companies selected in the study. All respondents agreed that technology plays an important role in innovation, leading to changes in business model structures and drastic changes in the industry.

CUSTOMERS

The prevailing elements leading to good customer service in the rental property market are efficiency and timely service, convenience, feedback and follow-ups, knowledgeable consultants and updated property listings. Customer service is deemed to be imperative when dealing with people on a daily basis. It’s evident that a lot of emphasis is given to customer service on the job, however, not much attention is given to following up and after sales service. This is mainly due to the complexity and

agility of the market and it was noted that the market is too busy to keep up with everybody. A customer stated that, “This is a competitive market and I would choose a company I remember. People remember companies that offer both pre- and aftersales service” Even though companies are investing in technology in order to aid customer service, others retain more conventional methods. Most companies are notified a month before an expiry of a contract between a landlord and tenant in order to contact them and hopefully benefit from a generation lead. However, follow-ups could be carried out throughout the contract even through a simple automated e-mail or message. Even though a company could be promoted for its efficiency and timely service, customer service can play an important role in customer value proposition and may play a leading role in distinguishing one company from another.

TECHNOLOGY

Companies are investing in technology in order to enhance their service by improving their online capabilities and also internal business operations. Internal operations may be shifted to automation in order to offer more efficient service, while saving energy just as banks have removed some cashiers for ATMs. Consumers are becoming more technologically aware and younger generations have started to prefer purchasing goods and services online. Technology has inevitably rendered many industries obsolete and it’s likely that real estate may be hit by the changing tide of the digital age. Even though many online portals exist, distinguishing themselves by having no agents and no commission charges, technologies are also being implemented whereby customers may have a whole walk through of a property

Money / Issue 31 - 41

Interview BUSINESS

Improve customer relationships

Low-cost structure Compensation/ Complementarities

Timely service Feedback and follow-ups

Lock-in strategies

Updated systems and property listings

â&#x201A;Ź

FINANCE

CUSTOMERS

with all the required specifications. This may reduce the amount of property agents and increase the number of rentals done online, assisting landlords to rent out their property months before itâ&#x20AC;&#x2122;s even vacant. Therefore, the use of technology may create opportunity to satisfy unrequited customer needs. This technological support will help in ensuring that the limited time of agents is used to create value added relationships with customers.

BUSINESS INFRASTRUCTURE

BUSINESS INFRASTRUCTURE New organisational structure Leadership style New dynamic work environments Open door policy

Continuous improvements in infrastructure are being implemented in order to improve efficiency and customer service by integrating new systems and technologies to match customer demands.

TECHNOLOGY New efficiencies Novelty New customer value Improved systems for internal/external use Automation: saving energy Online service

Customers share the same view by arguing that an agent needs to understand customer needs and plan viewings or visits in a timely and efficient manner. An agent also needs to be knowledgeable about the market and able to communicate market conditions in a way that is understandable to customers. This necessitates training in order to remain abreast of market trends and shifts in

Due Diligence made simple

Ask the Experts

consumer behaviour and build lifelong customer relationships. Employees have become an asset to companies, especially to those in direct contact with customers on a daily basis. Markets have moved to a knowledge-based era and the number of services are increasing, placing more emphasis on the people delivering services. Work environments are also imperative. This doesn’t necessarily mean that employees should wear a tie and suit – however, companies led by effective and innovative styles can outperform their competitors.

FINANCE

The conventional revenue model consists of the landlord and home seeker paying an agency fee. However, online property portals, due to the nature of their structure, have developed low-cost structures whereby customers pay no commission and can still search and find properties. Even though this may seem to be a competitive advantage, one has to take into consideration the opportunity cost of not having property consultants dealing with customers. Additional revenue streams

could possibly include add-ons whereby agencies may offer customers different services such as photography, property management and adverts. To conclude, conventional business models are changing in order to facilitate technological developments. However, the human presence in the market is still essential. Knowledgeable agents offer a wealth of value and the change in technology will allow those agents who are worth their weight in gold to have a chance to shine. It’s essential for incumbents and new entrants in the marketplace to possess technological capabilities due to competition and newer generations becoming more technologically oriented. Even though technology plays an important role in achieving a competitive advantage, it’s also important for companies to employ people with creative skills. Furthermore, it’s pivotal that companies constantly examine and revolutionise their business models in areas such as customer value proposition, finance and business infrastructure.

Technology is playing an important role in how companies are developing in order to adapt to the changes it has brought about. Technology that corresponds appropriately with business models may result in disruptive innovation, creating affordability and accessibility in industries that deliver tremendous value.

MARKET -ING

WISH YOU WERE HERE

What motivates foreign buyers to buy a holiday home in Malta, asks George Larry Zammit.

alta is one of Europe’s most densely populated countries. Official statistics state that 1,300 persons live within every square kilometre of the Maltese islands. While being a densely populated island state, Malta has still successfully carved a niche for itself in recreational property sales among foreign buyers. Recreational properties are considered as second homes. Driven by lifestyle motivations, people from the northern regions of Europe and North America are increasingly acquiring properties in warmer destinations. Apart from Malta, other popular destinations considered in the Mediterranean region include Majorca, Corsica, Sardinia, Sicily, Corfu and Cyprus.

THE PROPERTY ACQUISITION PROCESS

Basically there are three stages of the property acquisition process. Firstly the need recognition, followed by the research and evaluation stage, and finally the decisionmaking and post-acquisition stage. From a marketing point of view what is the main motivator to encourage a potential buyer to invest in a recreational home? Why choose Malta and not somewhere else? Common motivators revolve around the ability to acquire a ‘better life’. Sun and sea are certainly two important factors offered by Malta even though other locations across the southern European cost can offer the same. English as a common language in Malta is also another plus. But then isn’t that the same for places such as Gibraltar? Even places like Corfu and Majorca are developing their

44 - Money / Issue 31

English speaking skills with the increasing popularity of British arrivals. That is why even though product Malta can seem attractive and practical, more physical and emotional assets need to constantly be developed to strengthen the psychological pull of investing in a recreational property in Malta. Obviously buying a property is not like purchasing a beverage from a vending machine. Everybody would love to have a recreational home but different buyers have different budgets and expectations. That is why potential buyers will research and evaluate their options. A positive visit to Malta will certainly help but investing in Maltese property is no longer the steal it used to be. With premium pricing of quality recreational homes in Malta becoming the norm, buying property is certainly not an impulse decision. Hence realtors need to appreciate that buyers will do their own proper research, look around and match and compare online. Research has shown that buyers viewed their relationships with the estate agent as significant, and generally placed a high degree of trust in and dependence on that relationship, sometimes even leading to ‘moral obligations’ regarding the agent’s advice. Therefore the role of the real estate agent is not something to be ignored. The role of the agent is to capture the imagination and expectations of the buyer and match it with what is best available on the market. Only by being candid and trustworthy can the agent successfully fulfil the desired match and secure the sale. On the other hand the real estate agent has to realise that buyers will try to go solo and search on their own. Therefore the agent needs to convince the buyer that only through an agent can they find their dream property. The last stage of the property acquisition process is the final decision made to purchase the property and the post-acquisition term which will confirm if the buyers’ investment in Malta was the right decision. This stage is certainly important as it closes the deal but one must not underestimate the enthusiasm of happy buyers that can churn new potential buyers among their family, friends and coworkers. On the other hand it’s important for realtors to realise and understand the reasons why a buyer might reconsider their relocation to Malta and decide to move elsewhere.

PRODUCT MALTA

Malta is a dynamic destination. Apart from the wonderful sun and sea, the island is home to an abundance of cultural heritage. While we do tend to show dissatisfaction in our limited

entertainment options, Malta truly does have a busy cultural calendar. And even though our Mediterranean blood gives us a tendency to huff and puff about everything that bothers us, the Maltese are still very kind, generous and hospitable people. Malta’s educational facilities should not be underestimated while the islands are supported with a reliable and advanced health system. Considering Malta’s geographical vicinity to Tunisia and Libya, Malta is still a very safe place. It’s a great place to bring up children in a quality environment and to wind down, retire and enjoy a Mediterranean lifestyle. Research also shows that the availability of low-cost airlines makes a destination more attractive as airline links to major cities are convenient and affordable.

George Larry Zammit’s a chartered marketer who invigorates businesses through his consultancy Tiki-Taka Marketing (www.tiki-taka.com.mt).

All these attributes create a compelling proposition for any visitor choosing to reside in Malta. While one of the problems is that we try to be everything for everyone, living in Malta is enjoyable, safe, and rewarding. Integrating with the local community is also possible as foreigners are accepted and become part of the social fabric of the locality.

PROMOTING MALTA

While the remit of the Malta Tourism Authority is to promote Malta as holiday destination, its role does not include the promotion of Malta as a place to invest in a second home. On the other hand Malta Enterprise is the government agency which promotes foreign direct investment but once again its remit is not to promote recreational properties as a long-term investment. Therefore while government agencies do try to collaborate and support indirectly the real estate industry in Malta, most real estate agents have to coordinate their own initiatives to reach out to potential buyers. All this comes at a cost which can be a considerable investment. Several real estate agents and developers have taken the initiative to visit and participate industry trade fairs on the main continent. Advertising in niche publications especially in the UK is also a common practice. But still a lot more can be done through online content and promoting success stories about those who have happily settled down in Malta. Also one should explore the possibility where stakeholders collaborate together to promote Malta as the ideal place for a recreational property investment.

CHALLENGES CONTINUE

Like any business activity, challenges will remain and persist. The obvious challenge in Malta is the scarcity of land to develop and

RUNNING FOR CHARITY

how efficiently and sustainably it’s utilised and developed in the long-term. Real estate can no longer be a speculative affair. While property investment for developers is a shortterm game, a long-term approach is needed to holistically sustain Malta as a valued real estate investment proposition. Finding the right buyers is another challenge. In the past real estate agencies were mainly inward thinking and not much effort was put into reaching out to external buyers. Leads would mainly be generated through daily walk-ins by tourists who would be visiting Malta. A lot has changed as many independent and franchised real estate agencies have set up base in Malta. Therefore those who solely depend on walk-ins will have limited potential to sustain growth as the competition is tough and properties are listed with multiple agents. Therefore real estate agents need to internationalise their networking to not only rely on walk-ins but reach out to potential buyers who might have not even set foot in Malta. Developers also have a crucial role in enabling the right mix of properties available for sale in Malta. Gone are the days of lumping garages and apartments in a plot or reinvigorating townhouses into rustic and authentic homes. Developers need to adapt to market needs which are constantly evolving. Preserving the quality of life goes hand in hand. Without it developers would be purely destroying the recreational element of an investors’ second home from home. This needs to be supported by continuous investment in infrastructure, cultural activities, the environment and safety. One of the biggest challenges for Malta has always been about global awareness. Malta

has limited resources compared to major nations to stand out and be noticed. This has practically always been the case for tourism and foreign direct investment. Upcoming events such as CHOGM, V18 and Malta’s chairing of the EU Presidency will provide prominence to Malta on the international media. Such events are opportunities to capture the imagination of potential buyers. Traditional markets such as the UK and Italy are no longer the predominant source of buyers. Apart from the increasing interest from Nordic countries such as Sweden and Norway, new target markets such as China, Russia, and the UAE are steadily developing. With new buyers coming from non-traditional regions comes the need for a gradual adaptation in consumer behaviour and habits.

THE LITTLE ISLAND THAT COULD

Visitors to Malta find it rather impressive how we have lumped all the necessities and qualities of a big nation into a small one. Malta and Gozo have a lot to offer for many types of buyers for many reasons. This can only be sustained by preserving our quality of life. Foreign buyers value Malta’s lively and vibrant environment. Convenient distance but a nottoo-crowded environment is also valued where one has the option to participate in central city life or reside in calmer areas. Foreign buyers of recreational homes praise the calm and silent environment of our quaint villages. This is where they discover and enjoy a traditional lifestyle while avoiding the mass tourism feeling. It’s the simple things that matter, small qualities which make Malta an authentic place to live. We must never fail to appreciate the sheer beauty of simplicity. There is nothing wrong with being bold and ambitious but we should never forget our roots and humble origins.

the more money would be donated to the charity since Vivendo would be offering €5 for every kilometre generated on one of these new treadmills on display.

The MYRUN Technogym Charity Challenge attracted participants from all walks of life, age groups and fitness levels as well as numerous personalities and politicians, to do their bit for the Inspire Foundation Malta.

“We are very pleased with the turnout and the positive response,” Stefano Borg, Wellness Manager at Vivendo Group, said. “Over the weekend a total of 969 kilometres were clocked up on our treadmills and it generated €4,845 for the Inspire Foundation Malta.”

Vivendo Group, representatives of Technogym in Malta, set up a runners’ zone with four high-tech treadmills on the Sliema promenade. The challenge was clear. The longer distance achieved on the treadmills,

The charity event also marked the launch of the brand new MYRUN Technogym treadmill, a state-of-the-art treadmill designed by runners for runners. For more information visit the Technogym Malta Facebook page.

Money / Issue 31 - 45

Malta Malta

210 210 years years of of luxury property. luxury property.

The world's best luxury property The sinceworld's 1805. best luxury property since 1805. There has never been a better time There never been ainbetter time to ownhas luxury property Malta, to own luxury property in Malta, the Mediterranean's most rapidly the Mediterranean's growing economy. most rapidly growing economy. Chestertons rises to the occasion. Chestertons rises to the occasion.

GUIDE €2,600,000 GUIDE €2,600,000

Bahar ic-Caghaq Villa Bahar ic-Caghaq Villa

5 beds / 3 baths / 1 reception / Garage €2,600,000 Price Guide 5 beds / 3 baths / 1 reception / Garage €2,600,000 Price Guide VILLA in Bahar Ic-Caghaq designer finished to the highest standards and being offered for sale fully furnished and equipped. This bright and airy VILLA in enjoys Bahar lovely Ic-Caghaq designer sea finished to the highest standards and being for plan sale fully furnished and equipped. and airy property unobstructed and country views. The Villa comprises of aoffered large open kitchen, living room and diningThis roombright with fireplace, property lovely and country views. The Villa comprises of aroom largeisopen plan kitchen, living room andthen dining room fireplace, 5 double enjoys bedrooms allunobstructed en-suite, andsea a study. A second kitchen/sitting and dining found near the pool area which leads outwith onto a large 5 doubledeck bedrooms all large en-suite, andpool. a study. A second kitchen/sitting and dining room is found near thehome pool area which thenlifestyle. leads out onto a large garden, area and infinity Along the house is a 4-car garage and drive-way. This beautiful offers a luxury garden, deck area and large infinity pool. Along the house is a 4-car garage and drive-way. This beautiful home offers a luxury lifestyle. Chestertons Malta Head Office, Portapce Building, 38 St George Street, St Julians, Malta Chestertons Malta3333/4 Head Office, Portapce Building, 38 St George Street, St Julians, Malta Tel: (+356) 2728 Tel: (+356) 2728 3333/4 46 - Money / Issue 31

www.chestertons.com.mt www.chestertons.com.mt

Interview TOURISM

GENUINE HOSPITALITY

We need to continue making further inroads in diversifying Malta’s product, says Adrian Attard, General Manager, Radisson Blu Resort, St Julian’s. How has the local tourism industry developed in recent years? Without a doubt our industry today is one of the key drivers behind Malta’s economy, directly employing thousands of people while being a key source of revenue. In the last 50 years, we have built an industry which manages to attract almost two million tourists to our island. However, despite some effort, we have not moved far from the brand that was created in the 1960s built on the three selling points of weather, hospitality and price. I believe that over the last years, most industry players have realised that this model must change if we are to continue growing. Today our conversations are focused around the quality versus quantity debate, essentially driven by the realisation that despite our success, our current model is unsustainable over the long term. If we are to continue growing we have to evolve and redefine our brand. Does the country’s infrastructure still need to improve? Although important, the hotel experience is not the entire focus of a guest when travelling. Malta’s infrastructure plays a key part of the guest experience and must not be undervalued. When considering infrastructure I think that the areas that are always discussed first are roads and the transport networks. While important, they are not the only areas which need to be addressed. I think that the focus for improvement has to be our architecture, our preservation of the environment and our ability to continue to grow economically while embracing our heritage. Investing in our culture and in retaining an equilibrium between development and the environment is actually an investment in the future of our tourism product and the only way that we will move towards having an industry that is sustainable both from an environmental but more importantly an economic perspective.

The days when travel is centred on beaches and egg and chip shops is long gone. Our customers are excited by cultural activities, historical monuments and inspiring architecture. They also are looking for a varied product where relaxation is mixed with learning and discovery. It is crucial that our focus recognises this shift and addresses the infrastructural challenges which threaten the foundation of what inspires our guests to visit. Has the hospitality industry diversified in

“IF WE ARE TO CONTINUE GROWING WE HAVE TO EVOLVE AND REDEFINE OUR BRAND.” recent years? The world economy has forced us to diversify. The shocks of 9/11, the development of the internet and the recent economic crisis forced us to look at what we were doing and challenge some of our operations. Our customers are looking for a very different experience than they did in the past. They are booking and planning their holidays differently and the information is readily available for them to make quick decisions which in themselves are not binding until the very last minute. A few years ago one would not believe that people would book their hotel on the same day of their travel from a mobile device while sitting at the airport looking through reviews on social media sites. Today, they do.

destination with most customers visiting for their annual holiday in the summer months. The challenge with this type of business is that it is highly seasonal and with today’s cost structures absolutely unsustainable. This is why we have made inroads in diversifying the product. Malta as a conference and events destination as well as a short city break destination focused on winter business is the key driver to industry success in the future. This is why culture and heritage are key to our future. Our leisure customers look for a varied product where they are able to relax within the resort while also enjoying the many sights of the island, authentic cuisine and excellent hospitality. This is our main focus and our yes-I-can! service culture is key to ensuring that we are able to deliver with consistency. With the recent announcement of the development of a six star hotel how do you feel this development will change the landscape of the local hospitality industry? Opening up Malta to the luxury traveller is something which the industry has been considering for many years. Until now we have been successful in creating a destination primarily focused on the four star market with a number of quality five star properties that are able to cater for a higher net worth individual. However the reality is that internationally the industry has developed beyond the five star hotels and today we see so called six star brands being players in various destinations. I believe that the development of the first true luxury resort on the island is very exciting news for the entire industry. A destination is measured by the brands that are available. Strong brands that are clearly defined attract customers and also attract each other. A luxury hotel brand will eventually attract luxury retail as well as ancillary luxury services which we are perfectly located to deliver. The evolution of Brand Malta is ready to take on the next phase where we attract travellers who are looking for a unique experience in a luxury environment surrounded by inspiring history, beautiful architecture and a charming scenery, all in a destination that is a heart of genuine hospitality.

What package does Malta offer as a tourist destination? Malta continues to be primarily a leisure

Money / Issue 31 - 47

WEâ&#x20AC;&#x2122;LL KICK START YOUR REAL ESTATE CAREER! No other Estate Agent offers this much!

Succeed Mentor Training 9 Week Training Programme

Your RE/MAX Career 5 Week Training Programme

Tom Ferry Sales Power Advanced Training 14 Week Training Programme

Luxury Real Estate Advanced Training 7 Week Training Programme

RE/MAX Europe Convention Berlin, Germany Dates: 21st - 23rd October 2015

RE/MAX Malta is the most prepared to take your new career to extraordinary heights. No other estate agency in Malta offers the support and education that we do to kick start your career immediately. From day one you are enrolled into our education programme and are given the techniques, knowledge and mentorship required to make you a successful agent.

* Contact Michael Bonello on +356 99440165 for more information or to apply for a new rewarding career.

e f facebook.com/remaxtignemalta 48 -mike@remaxalliance.com.mt Money / Issue 31

www.remaxalliance.com.mt

Reuben Buttigieg is Managing Director of Erremme Business Advisors, Founding President of the Malta Institute of Management Accountants and President of the Malta Institute of Management.

Interview FINANCE

GET IN THE GAME Sports tourism could be a new niche for Malta, says Reuben Buttigieg. Over the last years, Malta has been discussing ways and means how to increase its tourism numbers particularly over the winter period. As announced recently and acknowledged by the Malta Hotels and Restaurants Association, the industry has improved substantially in 2014 and 2015 is expected to be even better. The coming years are also expected to be positive, especially within the context of Malta’s EU Presidency in 2017 and Valletta’s European Capital of Culture status in 2018. Although these events will improve the overall numbers, Malta may still have a shortage in the winter months. In any case, these are one off events which give government breathing space for a longer-term vision in tourism. There are various areas that different administrations have considered and worked on – however, one area that has not been given its due importance is sports tourism. Probably when mentioning this, you would think of major events like the FIFA World Cup or the Olympics which cannot be held entirely in Malta. Maybe if we reach an alliance with Italy we could host some events. However, there are other sports that we should consider given the nature, environment and mechanics of our country. For instance, shooting sports in all its different forms should be considered. Malta has scored well over the years in various competitions in this sport so it should first and foremost promote facilities that assist its athletes to improve their skills. Furthermore, it may be an opportunity to become a Mediterranean centre of excellence in these sports, also given that our environment is ideal for such sports. Indeed, the tourism industry was certainly pleased by the announcement of a stateof-the-art project promoting international competitions in Malta. The tourism industry

is once again presented with a challenge that may tap into unique niches that guarantee all year round tourism. This sports niche could have various multiplier effects. First and foremost, business in the Mosta area will certainly gain since persons visiting the state-of-the-art sports centre will have other needs as well. This will also mean that the property value in the region may also possibly increase. If you visit a place for a week, a look in the vicinity is a must, so ripple business effects on Rabat and other surrounding areas are envisaged. Farmers in the area could also be encouraged to team up and start selling their produce to these visitors within the centre.

“THIS SPORTS NICHE COULD HAVE VARIOUS MULTIPLIER EFFECTS.” When major events happen in a country, many of those attending those events will generally return to that country. I recall that my first visit in Holland was to see the UEFA Champions League Final between Real Madrid and Juventus. For me, the game ended in disappointment – however, I saw a country that would be worth a proper visit. Indeed, I visited the country on more than one occasion and ended up having various collaborations with entities in that country. I may give many similar examples of friends who returned with family or for business to a country in circumstances similar to my experience. When Brazil was to host the World Cup, there were some concerns that many foreigners coming over to the country may create disrupt the tranquillity of the population, create pollution and noise nuisance and also show lack of respect to homeowners. I loved the example a person brought to defeat these possibly justified

question marks. In reality Brazil holds a major annual event that brings people from all over the world: the Carnival of Rio de Janeiro. Brazilians always hold that event without any issues so what was different? They were capable to hold a successful world cup. Malta has also held relatively big events and much greater than the ones the shooting sports complex in Busbesija is trying to attract. Moreover, this event will not attract the party crowds normally associated with a football event: this is a niche that attracts particularly disciplined and distinct persons. With today’s technology one may circumvent most issues as Qatar has proven to us all. If Qatar can have air-conditioned stadiums, then Malta can invest in state of the art facilities ensuring the promotion of sport niches in its country. Malta had various crowds in various circumstances but was always able to handle with respect to all stakeholders. One may recall the various papal visits, the US – Russian Summit, the various concerts all over the island, the attraction of major personalities, the annual international air show, and the Rolex Middle Sea Race. Malta always excelled in these international events and it cannot but excel in attracting such new niche events to Malta. Sports tourism can extend even in other areas which to date Malta has not explored. For being the country of lateral thinking, Malta has fallen back in its ideas. Dubai has a skiing resort in the desert and the largest aquarium in the world. Abu Dhabi hosted the Club world cup and other countries are trying to attract other niche activities. Malta may act faster than these countries thanks to its small size. Malta should ride on this first opportunity it has in front of it to then attract others. Malta certainly needs more sports ideas in order to ensure that its tourism remains sustainable.

Money / Issue 31 - 49

50 - Money / Issue 31

Visit one of our outlets or call us anytime on 21 422 999 Brownâ&#x20AC;&#x2122;s Pharma Limited www.brownspharmacy.eu

Interview PROMO

Joseph Said, Mdina Glass managing director, started working at Mdina Glass soon after the company began and showed an interest in what the glassmakers were doing. He then took up the position of a trainee, soon working his way up to head of production. In the 1980s he took over the company, revolutionising it to turn it around during difficult times.

CAPTURING CREATIVITY IN GLASS Every item that we produce is unique and handmade, says Joseph Said, Mdina Glass managing director. How integral is glassmaking to the local arts and crafts tradition? Arts and crafts can only sustain themselves when there is an interest from the public. I hope that we are doing our bit to wave the local flag for this sector, through glassmaking, by attracting interest from the local market, the tourism market and overseas. The latter is more feasible now thanks to the internet. Mdina Glass was set-up in 1968. How has the company grown since then? In many ways, we are still the same company that opened its doors back then. We value the handmade craftsmanship aspect of our work. Then again, a company doesn’t survive for 47 years, and grow, without adapting and that is what we have done. We have expanded with respect to the products we make, the techniques we use, the staff required to run operations – from production and retail to shipping and more – and in the number of retail outlets we operate in Malta and Gozo, which totals seven to date. You have also expanded your operation to the rest of Europe through online shopping and orders. How has the foreign market received your offerings? We have expanded to Europe and beyond. When online shoppers visit our website they are presented with something very specific and unique because each item is handmade. We also strive to price our product at a competitive level compared to other international glassmakers while adhering to high levels of quality. We ship worldwide and include insurance, so I would say our offering

is comprehensive and has been received very well. E-commerce is still a relatively new aspect of the business, but one that we see increasing year-on-year.

solutions, scented candleholders, lanterns and even soap dispensers and oil and vinegar bottles. We’re constantly trying out new ideas.

There is a lot of value in a handmade object. Do you offer options for all budgets? Absolutely. This is very important to us. Handmade shouldn’t mean it’s exclusively the reserve of those with big budgets or deep pockets. We purposely create handmade glassware that spans the entire spectrum, from small paperweights to vases right up to bespoke glass chandeliers and huge Christmas trees.

Do you also offer a portfolio for corporate clients? Also, how adaptable are these objects to reflect corporate identities? We offer an extensive range of off the shelf solutions for this sector, but even off the shelf solutions are adaptable. We offer trophies and corporate gifts of various styles, colours and sizes and these can be produced according to clients’ specific requirements, often based on a corporate identity.

“WE VALUE THE HANDMADE CRAFTSMANSHIP ASPECT OF OUR WORK.”

We also engrave on glass, which means that we can include a message, award details or logo. These products can include various trophies, clocks, plates as mementos, figurines, shapes to depict a logo and much more. I would be exaggerating if I said the possibilities are endless, but they are certainly vast.

What product categories do you offer for homes? I firmly believe this is one of our core strengths. We have been very proactive in expanding what we offer, using glass in as many creative ways as possible. This has seen our portfolio expand from traditional paperweights, vases and bowls to now include Christmas decorations, lighting

Do you also produce specially commissioned trophies and corporate gifts? We have worked closely with many clients, both local and international, for specially commissioned trophies and corporate gifts. Orders of this nature often present us with the kind of challenge we enjoy solving in a creative way, often employing a combination of techniques we specialise in so that we can achieve the desired results.

Money / Issue 31 - 51

52 - Money / Issue 31

TECHNOInterview LOGY

KEEPING UP WITH THE POST-PC ERA The legal firm Be. Legal Advocates has recently launched its new website. Money clicks with Alan Cini and Ben Pace Lehner, founders of digital agency RockSteady by Distinkt.

he global population has gone mobile. In this post-PC era where smartphones, tablets and wearable devices are the order of the day, we are online 24x7x365. However, many businesses lack the mobile optimisation needed to meet the shift in online behaviour. Although the ability to communicate with customers is at an all-time high, connecting with them has never been harder. We’ve all been told that information should be reachable in just three clicks but is this still the case? Ultimately the goal of most websites is to have interested visitors contact you to get more information. This interest is then hopefully translated into custom. You should make this step as easy as possible for the user by finding the right balance between accessibility and scannability. As a user you need to be able to scan through a website to quickly identify the information you are after or where you need to go. How many times have you tapped on a Google search result on your mobile phone, only to find yourself looking at a webpage where the text was too small, the links were tiny, and you had to scroll sideways to see all the content? This usually happens when the website has not been optimised to be viewed on a mobile phone.

Ben Pace

Alan Cini

extensive range of resolutions, from smartphones to desktop computers. A dedicated mobile site is essentially a slimmed down version of your website, which delivers an optimised page that is smaller and easier to navigate. The solution can really customise the user interface offering a truly unique experience for mobile users. It’s a good choice when it might be too expensive to redesign responsively. How do you keep a website fresh? Websites must be designed to facilitate the ease of reading content, conveying a message, and lead to a call to action. This can be achieved through the effective use of layout, colours, typography, spacing and other elements. Also, stay simple. Users should feel comfortable when landing on your site. Start by focusing your design layout on a few valuable content items, such as where they are, who you are and what you have to offer them, without having to scroll down.

This is where the saga starts.

Furthermore, content writers must be aware of writing strategies that enable readers to quickly identify, read, and internalise information, essentially making content easy to understand.

What is responsive web design and how does it differ from a dedicated mobile site or an app? In simple terms, responsive web design is a flexible solution to provide an optimal viewing and interaction experience on different devices with an

“Left aligned text is the most readable alignment. It provides uniform or normal letter and word spacing, minimizes awkward hyphenation of words and provides the eye with a common starting point for each line,” say Alan Cini and Ben Pace Lehner.

“Distinkt was instrumental in the launch of Be. Legal Advocates’ enhanced brand identity in March 2015, which broadly comprised a new firm name and logo, stationery and a new state-of-the-art website. Alan and Ben’s creativity and clear passion for what they do is manifested in our firm’s new brand imagery, fresh colours and the significantly enhanced website functionality which has effectively enabled us to better convey who we are, where our firm has come since its inception in 2008, and how we can assist clients, in a clear and concise manner. This was a key consideration underlying our decision to go-ahead with the rebranding exercise.” Dr Richard Bernard B.A., LL.D. Managing Partner, Be. Legal Advocates What most people don’t realise is that content is far more than just text. The use of multimedia, such as properly tagged photos, videos and downloadable documents can be far more engaging, while also adding SEO value. However, while even the most effective user interface can get boring if the content is static, it’s important to keep the site alive by regularly updating its look and feel and adding new content. This will give returning visitors a new and fresh experience each time they return to your site. This article contains general information only and neither RockSteady nor any of its affiliate/s, partner/s and/or associate/s is/ are, by means of this publication, rendering professional legal advice or services. Before making any decision or taking any action that may affect your finances or your business, you should consult with your professional advisors.

Money / Issue 31 - 53

GARDENS

CONNECTING WITH NATURE

A well-designed garden adds value to your property, says architectural designer Eliza Costabel.

What determines the design of a garden? Size, topographical and climatic constraints are the primary determining factors in the design of a garden. The clientâ&#x20AC;&#x2122;s budget, needs and lifestyle are the next step in the analysis. Our role is to work within the given boundaries to create the best design solution possible. In most cases, the challenges end up becoming the driving force to achieve something unique. Climate is a prime consideration when designing a garden. How do you adapt form to prevailing conditions such as light, shade and wind? We ascribe as much as possible to a sustainable landscaping approach where the garden can survive by being part of the natural cycle of the local environment without the need of much human intervention. We select the best-suited plants to thrive in the prevailing site and climatic conditions and design the landscaping to solve issues such as privacy and screening. Since we want our gardens to become fully lived-in spaces, we also design the architecture of the outdoor space to enhance or contain climatic elements: awnings, trellises, gazebos and plants work in unison to create a comfortable environment.

54 - Money / Issue 31

Is design also influenced by the flora available? Given our local and overseas experience we are not creatively restricted by any particular status quo or by what is available on the market. Clearly, we design gardens which can survive in our climate and we are big proponents of Mediterranean and endemic flora. However, we also like to have fun designing and using plants for their colour, architectural or textural qualities. We pair them with original decorative elements and we tap into our knowledge and sources to find unique specimens which can make a garden truly special. What function do sheltered spaces such as gazebos have in a garden? We conceive gardens, be it in residential or in public settings, as outdoor living spaces. Nature and architecture are our palette but the final goal is to create spaces which people will enjoy living in and not merely walk by. Having areas in the garden sheltered from sun and rain will extend the time spent outdoors, throughout the seasons and time of day. It makes sense to plan these areas holistically with the rest of the soft landscaping so they can look integrated and not an afterthought.

Can garden design also act as an extension to the overall property design? Gardens are in fact physical extensions of the surrounding built environment and they should be treated as a part of the house which simply does not have a roof. In a garden you have flooring materials, artificial lighting elements and furniture as in any indoor space, but in addition to that, you also have soft and hard landscaping materials, all of which need to withstand constant exposure to the weather. With all these elements to keep in mind, it is important to plan a garden very carefully. From a design standpoint, we study the context and design gardens that are in harmony with the surrounding architecture. Stylistically, some clients prefer to carry the decorative language used in the interiors to create a seamless transition, while others want a completely different feeling. In both

“NATURE AND ARCHITECTURE ARE OUR PALETTE BUT THE FINAL GOAL IS TO CREATE SPACES WHICH PEOPLE WILL ENJOY LIVING IN AND NOT MERELY WALK BY.”

cases, an outdoor space is an opportunity to connect with nature and have a place where to relax, eat and entertain. Given our temperate climate, a well-designed garden can completely take over the use of interior spaces for a very large part of the year.

a house and its interiors are something very personal. Gardens on the other hand, transcend matters of taste. The beauty of a mature, well-designed and maintained garden, offering areas of seclusion and the sounds and smells of nature, will capture anybody’s heart.

What added value does a well designed garden give to a property? Immense, especially in a place like Malta where greenery and outdoor spaces are rather limited and come at a premium cost. If you think about it, the design of

The soft value of the enjoyment of a garden, translates in hard value once a property is put on the market for sale, because beyond any doubt, between two properties with equal architectural value, the fastest seller will always be the one with the spectacular garden.

Eliza Costabel Originally founded in 2004 in Los Angeles by Maltese born Eliza Costabel and university mate Douglas Esparza after years of experience in large firms, Idea/Studio has now set up shop in Malta and is joined by local veteran landscape designer Melina Scodanibbio. The studio offers a full range of design services spanning from interior architecture to landscape design and everything in between in the residential and commercial arena and has produced a vast and eclectic array of projects both locally and overseas. www.ideastudio.com.mt.

PRESTIGIOUS HANDS Edwards Lowell’s boutique recently became the local home for Parmigiani’s prestigious new oval watch, the Ovale Pantograph. The Pantograph is the star of the brand’s celebrated Oval line and is particularly unique because of its telescopic hands. The hands, which are made from titanium, expand and contract so that they are always accurately sized, no matter what part of the dial they are pointing to. Inspired by an antique watch produced in 1800 by Vardon and Stedman, this watch embodies the link between Parmigiani’s contemporary watchmaking and its legacy in antique restoration. Other watches from the Ovale Collection, as well as the extended Parmigiani line, are available from Edwards Lowell’s boutiques in St Julian’s and Valletta.

Money / Issue 31 - 55

MARKET market REPORT

INVΣ STING DIVERGENCΣ IN THE AGE OF

Europe is in the middle of a growth cycle. But how will the Greek chapter end, asks Alexander Mangion.

For several years following the financial crisis, Europe’s economy was stuck in neutral. Luckily, those days are over. Europe is currently in the middle of a growth cycle and wise investors have profited handsomely. The improving economy and declining euro made some stocks attractive for months. Auto stocks topped the list. However, that trade has just about run its course. The decline in the euro seems to have halted, at least for the time being. So what sector is poised to witness an increase in value in the coming months? According to several analysts, it’s financial institutions. Auto stocks started looking like a good buy when oil prices began falling, which boosted demand for vehicle sales. The export-heavy vehicle sector has benefited from the relative weakness of the euro, which has fallen heavily over the past year against the powerful dollar. Despite the slowdown in China, German carmakers have been reporting strong results. The party may not be over for investors in vehicles, but it’s certainly winding down. At the same time, analysts are boosting their views on banks. The financial sector tends to outperform when the economy improves and the currency strengthens. Recent PMI manufacturing data in Europe has been better than expected and the euro has risen last April. Also, the European Central Bank’s lending survey points to an improvement both in borrowers’ demand for credit and banks’ willingness to lend. Corporate demand for loans is the highest it’s been since 2007. Bank results are also particularly sensitive to the PMI manufacturing figure. Eurozone housing markets are looking better and more loan growth is likely on the way. Internet banking

56 - Money / Issue 31

is offering retail banks big opportunities to improve margins, since the cost-to-income ratio for online services is 30 per cent, compared with 50 per cent for brick and mortar banks. When you read the daily European headlines, it would appear that Europe is heading for a major confrontation over Greece. The Germans and other Europeans have made it very clear that there will be no haircut on Greece’s debt. Greek prime minister Alexis Tsipras and his left-leaning coalition party, Syriza, were elected on the basis that there would have to be major haircuts in the Greek debt, as well as relief from the austerity requirements imposed by the Troika (the ECB, IMF, and European Commission) in the wake of the last Greek bailout. In the coming months, Greece will need significant loans to make its debt payments and to pay its bills. The requirement for getting

those loans is that Greece must adhere to the regime that was agreed to by the previous government. Tsipras and company have made it quite clear that they do not intend to do so. If they don’t, it is highly unlikely that they will get the Emergency Lending Assistance (ELA) from the European Central Bank that would be needed to bail out their banks. Money appears to be leaving Greece and deposits are at their lowest levels since 2012. A Greek exit from the Eurozone has the potential to precipitate a crisis. An excessively permissive compromise by the Eurozone might also create a crisis. Everybody, and not just the Germans, recognises that Greece cannot pay its debts. A 175 per cent debt-to-GDP ratio is unsustainable at an interest rate of four per cent, let alone at the level at which rates have risen to in the

Licensed stockbroker Alexander Mangion is Managing Director at MPM Capital Investments since 2009. The company is authorised by the Malta Financial Services Authority (MFSA) to provide financial services in Malta and holds a Category 2 licence. Mr Mangion holds a Bachelor of Commerce (Hons) degree in Banking & Finance (University of Malta) and a Master of Finance & Investments (University of Nottingham.)

“A GREEK EXIT FROM THE EUROZONE HAS THE POTENTIAL TO PRECIPITATE A CRISIS. AN EXCESSIVELY PERMISSIVE COMPROMISE BY THE EUROZONE MIGHT ALSO CREATE A CRISIS.” last few months. While Greece is running a primary surplus, which means they are taking in more revenue than they’re spending (if you don’t count interest and loan repayment costs), they are nowhere close to actually covering the interest-rate expenses they are accumulating. They are digging themselves in a deeper hole and the austerity measures are keeping the country mired in depression. However, if Europe does the seemingly humane thing and forgives the bulk of the debt, then parties on both the far left and the far right throughout Europe may demand the same deal that Greece gets. You can almost guarantee that far-left coalitions in Italy and Spain and the far-right party in France would come to power as a result. That would eventually blow up the Eurozone and potentially even the European Union. And that’s not exactly what European leaders want. This is not a situation that is going to fester for a long time, as the clock is ticking and debt payments will have to be made in the very near

future. So what will happen? I think it might help us to look at who actually owns that Greek debt. There are restrictions on what the ECB and the IMF can do with regards to debt relief, and private investors are not going to be thrilled with any solution that does not fulfill the terms of their bonds. Coming up with a compromise is going to be very complex. There are a growing number of academic studies which point out that growth in the portfolio of an average investor is highly correlated with overall global growth. That suggests that a portfolio structured to take advantage of global growth is appropriate for most investors. Many analysts will agree with this but one should make it clear that a core portfolio is not a buy-and-hold portfolio in today’s environment. A buy-and-hold portfolio is an invitation to volatility and disappointment. The wide variety of investment offerings, especially in the $2 trillion ETF world (which will grow to $5 trillion within a few years), allows you to create a global core portfolio with a basket of low-cost ETFs. If you then allow each ETF to determine its own entry and exit points, you can potentially reduce your overall portfolio volatility and potentially increase your returns over those you would see with a buy-and-hold structure. Then, with your core taken care of, you can explore the potential of a falling yen and euro, buy potentially rising European stocks, make a commodity play when appropriate, and acquire a few strategic alternative funds to round out your portfolio. Depending on your net worth, you can take advantage of private equity and special offerings. Real estate and income plays may also help round out your investments. Because your core portfolio is the anchor, you can now place small bets on a number of strategic ideas that you feel have potential, while at the same time maintaining risk-management discipline with regards to the explore portion of your investments.

A HEALTHY SOURCE OF WATER Set up in 1995, EcoPure Limited bottles and distributes San Michel Table Water in 18.9-litre and 10-litre bottles and provides water coolers for rental or purchasing. The company offers door-to-door delivery to homes and offices. EcoPure Limited has been supplying homes and businesses throughout Malta and Gozo with a convenient, healthy source of San Michel table water for the past 15 years. San Michel is moderately mineralised table water, originating from strictly controlled water sources. It is laboratory tested to conform to very stringent chemical and microbiological purity criteria. Over the years, San Michel has become an established and trusted household name, suited to the healthy requirements of all the family.

COUNTRY market PROFILE

FIT FOR A PRINCE Monaco can teach us a lesson or two about tourism and real estate.

he Monaco Grand Prix isn’t really about Formula 1. Well, yes it is, but cars and drivers take back of the grid position because the race is all about the proverbial location, location, location. In fact, the 78lap race looks like a series of promotional postcards for this small principality: from Saint Devote and Casino to La Rascasse and on towards Anthony, it’s a best-of collection of Monte Carlo sights. At first glance, Monaco has all the odds stacked against it. Surrounded on three sides by the French giant, it occupies just under two square kilometres of hilly, scraggy land, right where the Alpes Maritimes meet the Mediterranean. And it has less than 40,000 inhabitants. And yet, this second smallest independent state in the world is an economic powerhouse. Back in 1850, leisure tourism and the Monte Carlo Casino were the principality’s main economic activities. Then the country started to diversify. Three factories – a flourmill, a brewery

58 - Money / Issue 31

and a chocolate factory – were built and the last land reclamation area in Fontvieille was completed. Tourism continued to be its main activity, but the focus now was to attract foreign nationals and keep them there, thanks to a strong banking sector and various tax incentives. Surprisingly, especially given its lack of land – even though it has increased its surface area by 25 per cent through land reclamation – Monaco is also strong in industrial development, thanks to innovation and technical knowhow. Located right in the centre of urban areas, manufacturing workshops and research centres operate in various sectors, including printing, chemicals, plastic processing, building materials and pharmaceutics. Highly profitable businesses and tax incentives have made Monaco a haven for the wealthy, who flock to the principality because of favourable tax incentives. That adjective – favourable – was the cause of much concern. In fact, after Monaco was identified as a tax haven by the International Monetary Fund in 2003, it was placed on the OECD’s blacklist of uncooperative tax havens and remained there until 2009. The principality is also a playground thanks to its climate, beautiful setting and glamour of the place. The glamour comes courtesy of the various stars that live in Monaco and also of

the royal dynasty: the Grimaldi family. From the late Grace Kelly, who had married former monarch Prince Rainier III, to the princesses Caroline and Stephanie and Prince Albert II, the reigning monarch of the Principality of Monaco, the royals attract plenty of attention and paparazzi shots. Such elements all provide plenty of tourist attractions, who travel to Monaco thanks to its accessibility, lifestyle, architecture, food and the casino. Tourism currently represents 11 per cent of Monaco’s total economic activity. Apart from leisure, business tourism is also strong and accounts for 18 per cent of hotel nights registered. The excellent performance of the tourism and financial services sectors are reflected in Monaco’s real estate market. In fact, the principality has just experienced record sales in 2014 and is set for further record sales this year. This record performance comes after a couple of bumpy years. Monaco’s real estate market was hit by the global recession and in 2009, the cumulative value of resales went down by 53.9 per cent. But in 2011, the market started to recover and since then, it has gone up by 109 per cent. Last year, a huge demand for property boosted the number of transactions to 555, which is 21 per cent higher than the market peak in 2007. This meant that aggregate value broke the €2bn mark for the first time ever. Most of the real estate stock consists of existing buildings. The bulk of these are small homes: in 2014, 80 per cent of transactions and 50 per cent of the total value consisted of properties with up to

three rooms. However, large units are also in huge demand. In fact, more than a third of the new build homes sold in 2014 had five or more rooms, such as those in Tour Odeon, Monaco’s first skyscraper since the 1980s.

is of €37,179. Ultra-prime real estate in expensive neighbourhoods such as the Carre D’Or has greater value – in fact, this hovers at around €90,900 per square metre. High prices? Certainly. But that only serves to attract ultra-high-net-worth individuals from around the world. In fact, Monaco is eighth on the list of the top second home destinations for the ultra rich. And with the number of super rich expected to rise, things can only get better for Monaco.

Huge demand and limited building stock translate into some of the highest prices worldwide – Monaco is the second most expensive location in the world after Hong Kong. According to property consultancy Savills, the average price per square metre

“MONACO IS THE SECOND MOST EXPENSIVE LOCATION IN THE WORLD AFTER HONG KONG.”

2nd

Monaco is the smallest independent state in the world, after the Vatican.

There are around

125

nationalities lving in Monaco’s

487 acres

Monaco does not impose income, wealth or capital gains tax.

The direct and indirect effects of tourist activities on Monaco’s economy stand at

11%

Since 1965, Monaco has increased the surface area of its territory by

25%

Sunshine averages

2,583 hours

annually. The number of rainy days does not exceed 62 per year.

According to property consultancy Savills, the total real estate sales in Monaco reached

In 2014, the number of real estate resale transactions went

€2.4bn

, which is up to higher than the peak in 2007.

in 2014.

555

21%

HERE COMES THE GROOMING Barnuz Barber will soon launch in Malta, bringing a new way for men’s grooming. Offering an innovative service and a high-end concept, the Barnuz Barber team has trained abroad with the technique and skill being on an international level. Men’s grooming has exploded and the old way of service is paramount at Barnuz Barber. Taking you back to a nostalgic experience to a simpler day when men gathered at the local barbershop to discuss everything from business to sport, Barnuz Barber offers traditional haircuts to contemporary styles through to hot lather shaving. For more information call on 9940 1980 or visit www.facebook.com/barnuzbarber. Photo by Adrian Buhagiar.

Money / Issue 31 - 59

PHOTOGRAPHER

KRIS MICALLEF STYLIST

LUKE ENGERER MODELS

GABIN, KEITH, KOSTAS & NIELS ŻFINMALTA DANCERS

// Alternative tank top at IQ, €38.50 // Nudie Jeans at IQ, €129.00 //

// Alternative t-shirt at IQ, €43.00 // Esprit jeans, €49.99 // Ecco Shoes at King Shoe Shop, €164.90 //

// Mexx shirt, €39.99 // Hilfiger Denim shorts, €79.90 //

// Scotch & Soda tank at IQ, €29.95 // Armani Jeans Track pants, €110.00 //

// Alternative tank top at IQ, €38.00 // Armani Jeans shorts, €130.00 //

// Esprit sweatshirt, €49.99 // Scotch & Soda shorts, €59.95 //

// Esprit jeans, €49.99 // Scotch & Soda shirt at IQ, €69.95 //

// Scotch & Soda sweatshirt at IQ, €65.95 // // Armani Jeans shorts, €95.00 //

// Tom Tailor tank, €12.99 // Hilfiger Denim shorts, €79.90 // Armani Jeans trainers, €125.00 //

// Armani Jeans t-shirt €145.00 // Armani Jeans shorts, €109.00 //

// Nudie Jeans top, €108.00 // Esprit shorts, €29.99 //

// Nudie Jeans at IQ, €139.00 // Scotch & Soda shirt, €79.95 //

Interview GIFTS

SUMMER

BRINGS

MAGIC

It's the beautiful season so it's only fair that Money gives beautiful gifts.

THE DARK KNIGHT The Breitling Superocean Chronograph M2000 plunges into the abyss in an entirely black-clad 250-piece limited series. As well as mastering the skies, Breitling has also played an important role in the conquest of great depths by developing outstanding instruments for diving professionals. The Superocean Chronograph M2000 is equipped with an exclusive magnetic pushpiece system and is entirely functional to a depth of 2,000 metres.

CYCLE OF LIFE The B17 leather and titanium bicycle saddle by Brooks England has been crafted in England using sturdy leather that will adapt to your shape the more you cycle.

LEAVE A NOTE SOUND BUBBLE Master & Dynamic headphones now come in a new navy-leather edition. The headphones use noise-isolating technology to create an impressively clear sound.

70 - Money / Issue 31

Finished with a patchwork of textural eel panels and hand printed Japanese Chiyogami, this is one handsome notebook by Elam Books.

ITâ&#x20AC;&#x2122;S ALL WRITE This brass ballpoint pen by Japanese company Midori has a timelessly elegant appeal. Beautifully weighed for smooth writing.

CARRY ME HOME Made from signature Moynat canvas, this briefcase features a concave base and patented lock.

DRINKS ON THE HOUSE THE WALK OF SUMMER Balenciagaâ&#x20AC;&#x2122;s sneakers combine smooth suede and pleated, burnished leather for a fresh approach to luxury.

This buffalo-leather minibar by Life of Riley can carry up to four bottles and four glasses. It has a built-in ice bucket, tongs, corkscrew and bottle opener.

LEAVE A NOTE Finished with a patchwork of textural eel panels and hand printed Japanese Chiyogami, this is one handsome notebook by Elam Books.

TAKE A BOW Luxury Parisian brand Charvet elevates your formal look with this light blue and navy striped bow tie.

Money / Issue 31 - 71

TRAVEL

BUSINESS DEAL When travelling in business class, it’s all about the details, says Mona Farrugia. Ever since I stopped writing critiques, I find it difficult to wrap my head around the minutiae of what works and what doesn’t and have reverted to normal mode. Or so I thought. In my head, though, there it is, like a switch that insists on staying in standby: if only they did this or that, life for their business would be so much better. Over the past two years or so, a little after they arrived in Malta with a good base of three flights a week, I have been flying with Turkish Airlines. Like a pup to water, I dipped my feet gently on my first foray into the amazing city that is Istanbul with a short flight. Once I got over the fact that Turkish Airlines were using relatively small and not exactly new aircraft on this route (they were also dipping their feet, it seems, checking out what this tiny Mediterranean country could give them) and that their business class cabin seemed to be sadly similar to Air Malta’s (small, cramped), I fell slowly but surely in love. Unlike many other airlines, it seems that with Turkish Airlines, whoever is in some head office is actually creative and really travels. Once passengers – all of them, not just the ones up front – are seated, cabin crew distribute samples of Turkish delight. This has three effects, all fabulous. First, you immediately think, “Wow they’re generous.” Secondly you automatically want to sit and stay seated, increasing control for the crew. And third the sugar in the sweet calms down the passengers. So: in depth thinking, creativity in management plus acumen. Onward and upward, the food, even on such a short trip, was nothing short of

72 - Money / Issue 31

amazingly fresh. Turkish Airlines’ suppliers, Do & Co, do not just create normal and then try to adjust it into a 35,000-foot high version by adding kilos of salt. The dishes are obviously made for flying.

intensely the next and generally ignored all calls for attention.

In-flight entertainment was close to zero but these days everybody takes their own tablet so I didn’t really miss anything.

Comparisons are odious but Emirates, where quality of food and personal service has levelled out over the past four to five years, always have outstanding and professional crew who manage to make up for gaps in topdown management.

When the technical bits, things that are not in the staff manual, are missing, passengers automatically turn to the crew and sadly, on Turkish Airlines, the crew’s friendliness is very hit and miss. I have been on flights where they are jolly, happy and helpful. I have been on others – Istanbul-Ho Chi Minh’s nine hours, for instance – where crew members seem to have all been told they were getting fired five minutes before they checked in. They ignored some customers, set up flat beds for whoever they felt like, smiled one minute, frowned

It may be that, like Emirates in 1999, Turkish Airlines are being better served by other airports than their own. Home airports like MIA is for Air Malta an integral part of the customer experience. Whereas every single other airport I’ve flown to with Turkish Airlines presented top-notch service for its business passengers – separate buses being one of them even if the cabin is relatively small – Istanbul Ataturk Airport service is still trying to get out of 1995 mode of thinking. It is like Turkish Airlines have become so popular the

Food and travel writer Mona Farrugia runs Angelica in Valletta. www.angelicamalta.com

airport has no idea how to handle it. On my last long-haul flight, I was expected to alight and catch a connection in pouring rain (they did not even bother to cover the steps and this was not some freak shower which took them by surprise) and by the time I climbed on to the plane I was soaked, hair frizzed and not a little bit jaded. In Ho Chi Minh airport I was welcomed like royalty. Bizarre.

“BY THE TIME I CLIMBED ON TO THE PLANE I WAS SOAKED, HAIR FRIZZED AND NOT A LITTLE BIT JADED.” In comparison to the airline’s enthusiasm for good service, a joy that has seen it winning one award after the other, Istanbul airport seems to be overwhelmed by bureaucracy and processes. There are indifferent staff who will absolutely not communicate (English-speaking is still considered to be a special talent) and sadly staff literally switch themselves off when faced with panicked passengers trying to get their flight. It is like they have not realised that they are now serving the world, not just Turks. In the lounge, which has fabulous architecture, you will experience situations where whoever dreamt up the ideas now has no control over their execution. There is no first class on Turkish Airlines, which is great – you never envy anybody further up front from you – but this also means that the lounge services both levels of passenger. Its food is outstanding, from crunchy pide (like little pizzas with meat) to non-stop Turkish delicacies and fresh salads. But the smoking lounge, for instance, is a 10-minute walk away. Honestly, not having smoking sections in the huge business lounge and making passengers who have paid €3,500 for a ticket walk to the other side of the large airport to a horrendous semi-outdoor dark tunnel is beyond ridiculous.

So is the service. There is non-stop massage available. A girl walks around offering back rubs. There is no literature to explain how one books so I asked the receptionist. “You will see her,” she growled as if she had been asked the same question 300 times today already. Eventually I did and since there is no other way to get a booking, I had to interrupt her work. “I will come to you,” she snarled. Two hours later I saw her massaging someone close to me so I thought she was making her way to me. She finished him and literally vanished. “Where did she go?” I asked the receptionist. “I don’t know!” she replied as if I’d pulled her hair and slapped her face. It was an almost overnight stopover so I booked a shower. The staff have a list of long stopovers and you can only freshen up properly if you are on the list – again, ridiculous. The shower receptionist (yes there is one, and she does absolutely nothing but take bookings for the shower) seemed to be surprised to see a woman – a huge percentage of business class travellers are men but come on, this is 2015 – and tried to put me off booking. “There are many people waiting,” she said. At this point, I was wondering if I looked too clean that maybe I didn’t need a shower. When I eventually convinced her to allow me into the inner sanctum I realised that four showers were not being used. So why the aggro? The attention to everyday operational detail in the lounge is sadly lacking. Why, for example, is there no champagne, or even a sparkling Turkish wine available? It’s not like the wheel of business lounges has to be reinvented and sparkling wine is a basic offering worldwide. After my second visit, I wrote to customer service about this. “Thank you for the idea but you can always

have wine,” they said, helpfully. On my third visit, there was still no champagne. Then there is the noise factor. The floor downstairs seems to be made of fake parquet and the staff regularly march across it in heels and clicking brogues. The girls look great in those tight skirts and I’m sure their regular male customers don’t mind being woken up every 10 minutes by the racket accompanying the view but well, I was not amused. There is no section for children either and as I go along parents become more and more indignant about non-child-lugging customers not being excited by their offspring’s crying, shouting and general running about. I have no idea how the Turkish Airlines business lounge always has so many children in it but it does. That means that the management has to fix its operations accordingly. Out of the lounge, the airport management has installed its own business-class security section which is fantastic and basically means that you don’t need to wait hours to have your bags scanned. And on the plane, on long haul flights, Turkish Airlines has a menu so exciting – the on board chefs are just waiters in chef costume but it’s a good mental diversion – you cannot stop eating. All of this becomes very important advice to heed as the gossip that Turkish Airlines and Air Malta are teaming up heats up. It also means that the Malta manager (there have been three changes in two years, which is not healthy) needs to be extremely customerfocused and gives the hard-working team a good example of an open-, rather than closed-, door policy. A happy and full business class cabin, after all, makes more money, with its very few passengers, for its airline, than a packed economy section. And once you’ve won one of those passengers over, it is their regular flights that keeps your airline flying.

EVERY MAN NEEDS A SHAVE PLAN All the King of Shaves shave gels are suitable for sensitive skin. Whichever variant you choose you can be assured of getting a superbly close and comfortable shave, leaving you with skin that feels amazingly smooth, supple and hydrated, not dry and tight. Available from Brown’s pharmacies. For more information call on 2142 2999 or visit www.brownspharmacy.eu or the Browns Pharma Limited Facebook page.

73 - Money / Issue 31

Money / Issue 31 - 73

The Bluesman is a Maltese sound engineer working in New York.

Interview NEW YORK

The

Bluesman’s Blog Oil is back in the news, says The Bluesman. And so are police killings and airport security.

ell, well, looks like the shine and glint is back in the world of finance’s eyes as oil slithers up the popularity stakes. It would seem that the consensus is that while the higher stock market levels of a few years ago are behind us for the moment, stabilisation in the US economy is naturally a better thing. The effect is a calming balm given that the seasickness of the alternative and local pundits see the US ahead of the European game in achieving recovery while the low euro exchange rate gives rise to opinion that at least the risk of a sudden implosion is mitigated and investors are encouraged to swing away from US stocks. China is seen as a good place to seek opportunities. So I guess you pay your money and take your choice, or at least your broker’s choice. As for oil, with increased US production at an all time high and the world glut forcing a competitive pricing regime with the Saudis leading the way preferring to compete rather than give up share, the course appears set. The perfidious black gold that tends to be the cause of so much trouble has been seeping into the news cycle frequently of late. And not all is good news. The latest was the leaking of a reported 100,000 gallons of crude in Santa Barbara County into pristine bays creating a 10 square mile oil slick. But this is just a drop in the ocean (sorry) compared to exploding oil cars in trains meandering through populated areas and causing raging fires that the local fire departments cannot handle. There is no way these fires can be doused and they are allowed to burn themselves out, billowing black smoke and sending flames hundreds of feet into the air. One such fire in Illinois, a few miles away from former neighbours of mine, brought it home vicariously. The mind boggles at what would happen if one went off next to one of the many nuclear missile silos these trains go by, in Kansas for instance. The military is concerned but what about Congress? Moving the stuff around safely, whether via pipeline or rail, is a serious problem and yet most politicians are reluctant to address the issue of spending money to fix the country’s crumbling infrastructure. One notable exception is independent senator Bernie Sanders from Vermont. I

74 - Money / Issue 31

have mentioned this gentleman in a previous column along with Elizabeth Warren as possibly running for presidency. Warren, despite much encouragement, has decided to stick to her early decision not to run, preferring to be the out rider and making sure the Liberal stagecoach stays on the populist path. Sanders, however, has decided to throw his hat into the ring as a Democratic Party candidate. This decision has been greeted enthusiastically by all who are weary of the same old elitist-tinged way of doing things and after his announcement in Burlington, Sanders has been holding rallies with capacity crowds. Here’s a typical quote: “If we can spend $6 trillion sending people to war, we can spend $1 trillion to put Americans to work fixing our nation’s crumbling infrastructure.” Speaking of crumbling, there’s the report of the massive failure of the TSA, the agency that makes us take off our shoes at airports and holds bleeping and blooping sticks against our anatomy. This agency was subjected to secret tests where undercover Homeland Security agents posing as passengers attempted to carry fake bombs and weapons through check points. Only three out of 70 were detected. That’s a failure rate of 95 per cent. To be fair, these undercover teams, called Red Teams, are pretty intense and are intended to simulate the worst and most devious of terrorists and the screeners have intervened in a number of criminal attempts over the years. However, if they’re going to check out my drawers, the least they can do is find a foreign object. Truthfully this did

not come as a big surprise to the millions of air travellers but I’m pretty sure it did to the acting head (acting since January) who has now been reassigned. It may come as a surprise to many that there is no statute mandating the recording of the number of people killed by police. The big media flares of the stories that do come to light are sometimes the only way we find out. The FBI – itself very secretive about its own faux pas – came out with a number for the year-to-date of about 1.6 fatal shootings a day, but two newspapers, The Washington Post and The Guardian, conducted separate investigations. The Washington Post’s number was 385 for the year while The Guardian, which counted all killings not just shootings, made it 464. These figures translate to 2.6 and 3.1 per day. Now legislation has been introduced by two Democratic senators, Barbara Boxer (CA) and Cory Booker (NJ), both of whom I have worked events for as it happens, which would finally require all shootings by police be reported. Small consolation to the families of those victims needlessly killed. Not every infraction or even evasion needs to end in a hail of gunfire. In the meantime, the family of 12-year-old Tamir Rice – who was shot within three seconds of the cops showing up last November – are still awaiting the result of the investigation. Still, it’s certainly about time if the legislation makes it through. To quote Churchill: it may be the end of the beginning.

Picking one starter can be difficult when faced with so many options. Le Bistro has got this covered! Get inspired by our starters menu... Order any 2 starters... Taste just the right amount of deliciousness before moving on to our all new, fresh selection of mains! Tel: +356 2137 4894

restaurants.stjulians@islandhotels.com

www.radissonblumalta.com

Money / Issue 31 - 75