The company that acquired under government tender the land near Cambridge Battery in Sliema is issuing Lm15 million in bonds to part-finance its development. Media-shy George Muscat, chairman of GAP, who is spearheading the development of the project called Fort Cambridge, gives The Sunday Times an exclusive interview.
George Muscat is the invisible man. He stays resolutely out of the newspapers and off the television, saying that he has no time for that kind of "nonsense".
His name rings a bell in many minds, but they're all people with whom he's done business, and not people who have read about what he does for a living. For somebody who likes to keep a very low profile because the opposite is "distracting", he's done a pretty good job of filling newspaper pages in recent weeks.
He's the man whose company acquired by tender from the government 29,225 square metres of land on Sliema's Tigné peninsula, including the site of the former Crowne Plaza hotel and the historic Cambridge Battery.
The ruckus about the hotel employees who had to be kept on the payroll was superseded by the rumpus about the apartment blocks that are to go up nearby. All kinds of accusations have been bandied about, protest meetings convened and letters written to the newspapers.
Yet Mr Muscat remains resolute: "This is prime land for development, and we acquired it on that basis, not for fun or to add to a collection. I can understand the concerns of neighbours when they worry about the noise and inconvenience of excavation and construction, and we are doing our best to cut down on all of that. But what I cannot understand is the argument that there should be no apartment blocks there, when that is the perfect place for them. Sliema is a modern town. If apartment blocks don't go up in Sliema, they'll have to go up somewhere else."
It's not a question of having no apartment blocks at all, he says, because the demand is there and it's not going away. "Apartments are being built instead of houses because they are what people want, and not because they are what developers want to build. It is demand that shapes the product, and not the other way round. Today's buildings are suited to today's lifestyle. Women want to work; they don't want to stay at home cleaning large spaces. But even if they don't work, they don't want to spend their time fussing with the house."
This is the explanation, he says, for what is, to some, a quite extraordinary phenomenon in which large numbers of people prefer to spend Lm250,000 on a new apartment than Lm150,000 on a house with a courtyard.
"It's not extraordinary at all," he says. "It's rational thinking. People prefer to spend their time and money enjoying themselves, rather than on cleaning and maintaining a house. Many of those who are buying contemporary apartments have spent years living in large villas with gardens and pools, or townhouses, and they don't want the trouble any longer. Most of those who have a lot of space at home end up never using it, unless they entertain quite a lot or have a large family."
Humble beginnings
George Muscat is a bit of a phenomenon himself, even if a largely invisible one. Born in Qormi, the son of a herdsman, he went off to try his luck in Australia when he was just 16. Before long he was back, and used the Lm400 he had saved to buy a plot of land. He built a house on it, sold it, and with the profit bought more land. He was 20 years old and on his way. "That was the start of my business," he says. "I had a full-time job with Joinwell, and no training in building. I learned as I went along, got a builder's licence, and worked on my projects after clocking off. After five years, I was able to leave my job and concentrate on building. I began to engage people to help me build on my own land and do building jobs for others."
He used to build for another developer, in exchange for land. He did a lot of building on government plots for those who acquired them. His first big project was a block of 80 flats in Ghadira, in the mid-1980s, but he had already done a lot of building before then. It worked out so well that he began to work on blocks of flats, making it his main line of business.
"Before long I got out of the actual building work altogether, and began to engage others to do it for me. Now all we are involved with is the process," he says. When Bay Street in St George's Bay went up, he was one of the main partners, but kept quiet about it. "I don't like being in the newspapers," he says. 'This is something very unusual for me."
Now 50 years old, Mr Muscat formed his company, GAP, because the market was changing and so was his business. Standards were going up, with rapid growth and the demand for more professionalism.
"Things have changed completely over the past 20 years," he says. "There's no comparison with the way things were when I started out 30 years ago. People have changed. The new generation are closer in aspiration to their counterparts in Western Europe. They work not for the sake of accumulating money, as our generation did, but to have a good lifestyle. They know how to live, more than we did. They travel, eat out, buy clothes and furniture - there's a huge difference between now and then.
"This dramatic shift in attitudes has affected housing too. People no longer buy a plot and wait for their father or father-in-law to help them build it after working hours. They want comfort."
Even the terraced house is a thing of the past, he claims: the one-car garage taking up valuable living space, the washroom inconveniently placed on the roof, the long corridor with rooms all on one side belong to a market that has seen its day.
Mr Muscat's successful survival has hinged on predicting the market, ensuring that there is no shift in the pattern of demand in the time between planning something on paper and actually putting it up for sale.
"People want open-plan areas, preferably with views," he says. "They want to use every bit of space; gone are the days of keeping rooms for best. If people can afford a three-bedroom apartment then that is what they will go for, even if they only need one bedroom. They'll use those other rooms for storage or as an extra living-room or study."
Fort Cambridge
Two of the main objections to his Fort Cambridge plans are that the three blocks of up to 23 floors, with a total of 340 flats, are too high, and too many apartments. He argues, as his architect Alex Torpiano has already done before him, that there is no difference between the high density of the three blocks and the high density of a typical Sliema streetscape.
"A Sliema street will spread the same number of homes over a much larger area, using up more land," Mr Muscat says. "We are going to use much less land by building upwards. That is the kind of approach that makes sense everywhere that land is scarce and valuable." He points out that 64 per cent of the area is taken up by the protected heritage site of Cambridge Battery, while another 16 per cent is restricted for other reasons.
The main part of the development has to go up on 20 per cent of the area. The architect's project description statement explains that the impact on infrastructural services is well within their capacity. "It should be obvious that there is no difference between the consumption-impact on infrastructural services of homes built upwards or low-lying homes spread all over the ground," Mr Muscat says.
"I think the real difficulty here is that some people object to high-rise because it changes the landscape of what they already know, and change can be difficult to handle. But other people like to live in high-rise buildings; they like the vista it gives them, and they enjoy the convenience. It's a sounder option, because more people are housed on less land, and in luxury conditions. If people wanted houses they would be buying houses, but we can see that they are actually buying apartments."
Architect Alex Torpiano has explained that the buildings are being planned with a view to the impact on the skyline, and will be oriented north, south, east and west. "We've settled on a staggered and stepped vertical profile," Mr Muscat says, "and we're using interesting and environmentally sound materials like recycled glass and reclaimed marble and granite. The buildings have been conceived in the round, and with a view to how they will appear from below and from across the water. The finishing and the façades have been given much thought."
The argument that there are too many apartments on the market is not one that Mr Muscat subscribes to. "I have survived in this business because I know the market and I know what I'm doing," he says. "I would have to be mad or stupid to risk my capital building something that no one wants to buy and spending millions on the land to build it on. You don't make that kind of investment without doing the proper homework, and without the certitude of success."
There are too many bad apartments that no one wants to buy, he says, but this should not be confused with the fact that there are not enough good ones, which means that anything good that comes onto the market is snapped up on plan. "You're not going to force people to buy the bad apartments they don't want by restricting the supply of good ones," he says. "That's not how things work. Those who can't sell their apartments have bought badly. If you don't buy well, then you can't sell well. If you don't understand what the market wants, then you have a serious problem. People want even the common areas to be ready. Nobody wants hassles because nobody has time for that kind of thing."
Property prices
Prices have gone up steeply over the last few years, and property is much more expensive now compared to the average salary. "That's true," Mr Muscat says, "but people's way of life has changed drastically. Twenty years ago you used to see lots of rusty cars on the roads and now there are almost none, and it's not because of VRT testing. You can't compare the way we live now with the way we lived 20 years ago. Two people who are both working can buy property - even a single person with a regular good income can buy a flat. Those complaining about the burden are the ones who have taken on too much too young, because their expectations are too high."
The main factors affecting the price of property, he points out, are demand and scarcity. "Demand is high because people are better off now. There are claims that property is so expensive that people can't afford to buy, but the opposite is true. Prices are high precisely because so many people can afford to buy that demand has shot up and this has pushed up prices."
As part of the development brief, Cambridge Battery is to be restored, and will form the focal point of a public garden area. There are not going to be any shops or restaurants.
"People who spend that kind of money on an apartment don't want to live above shops," Mr Muscat says. He's very specific about how long the project will take from start to completion: three years and three months.
"It won't drag on beyond that. I have decades of experience in project management to ensure that it won't happen. I understand the concerns of neighbours - nobody wants to live near noise and dust."
Fort Cambridge will be a 'special designated area' in terms of the law on the purchase of property. This means that even those who are not citizens of an EU member state, and companies, can buy any number of apartments there and lease them out. "This means that when it comes to demand we are not looking at just Malta or the EU," Mr Muscat says.
"It's much wider than that. At the end of the day, this is the kind of business that Malta needs. People who live here part-time spend much more than tourists on holiday, and they add to the dynamism of the island. We have to stop being inward-looking."