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Aiming high

Artist's impression of the new Metropolis tower in Gzira.

Artist's impression of the new Metropolis tower in Gzira.

Property developers will always tell you that the key to success is "location, location, location". But what if that location happens to be Testaferrata Street, a sleazy area associated with pimps and prostitutes? When Global Capital chairman Chris Pace first dreamed of developing the Mira Buildings, he saw not just the tallest building on the island but a vibrant place, full of smart offices, art galleries and hip cafés. That meant demolishing most of the buildings along the street and starting from scratch. Easier said than done.

"There were a variety of owners from all walks of life. There were a lot of inherited properties and many sitting tenants. It was a very messy negotiation," he said, somewhat of an understatement.

"Our negotiators even had to go to the prison to do some of the konvenji (promise of sale agreements). I think that things will take their natural course. If the value of property goes up and the nature of the area changes, it will not make sense for prostitutes to be there any more. So they will find somewhere cheaper..."

Global Capital now owns almost 70 per cent of the surrounding buildings, not ready to leave the regeneration of the area to chance - and seeing a golden opportunity. Until the Metropolis project came along (which is being done by a separate company, Metropolis Developments), there weren't exactly hordes knocking at their doors wanting to buy...

"I have been a property developer since I was 18 years old, on a small scale. I believe property development is all about location. And despite the fact that Gzira and Testaferrata Street have a bad reputation, the reality is that it is a fantastic location, in the centre of the island, minutes away from the yacht marina and convenient for Sliema, Valletta and the airport," he said from his office on the 14th floor of the Portomaso Tower.

The view is breathtaking, panoramic. Why is this relevant? Because he believes that this will be an important selling point for Metropolis. Mira Buildings will be replaced by three towers, 33, 27 and 13 storeys high. Anything above the sixth floor will have an amazing view.

But unlike Portomaso Tower, which is on the edge of the sea, the Metropolis development will be in the centre of a town. Could the views be stolen by other developments?

"The policy on high-rises lays down very specific criteria on where they can be developed and you need quite a large footprint. The only place that would qualify in the area would be the stadium but we have designed the buildings with this in mind, to be complementary and for the views to be directed away from this area," he said.

The mention of high-rise policy is clearly touchy.

"This is the problem when you are a pioneer..." he shrugged.

"We got caught up in the bureaucracy of the Malta Environment and Planning Authority. When we applied, the minister decided that a policy should be set for tall buildings. This is fine - but it should have taken a few months and not 18 months to be drawn up and approved. The minister told us there were applications for high-rises in the middle of fields in Siggiewi so a policy was clearly needed. What frustrated us was the length of time.

"Fortunately for us our site was zoned as a high-rise area and we then obviously pushed very hard to get our application through."

However, while Metropolis was waiting, a number of other projects got off the ground, if you can forgive the pun. He shrugged again.

"The other two projects - Fort Cambridge and Pender Place - were on government land and were given the fast track, exempted from certain procedures like the Environmental Impact Assessment and the Traffic Impact Assessment, which we had to do at great cost and considerable time. What can you do? You can't really argue with Big Brother, can you?"

He is not afraid of the competition for one simple reason: Metropolis is not aimed at the same market.

"We will come out with a product that appeals to the middle class, rather than to the top end, which we feel is reserved to Midi and Portomaso and possibly Fort Cambridge," Mr Pace said.

He is convinced that the high rise has come of age.

"The new generation is looking for a different product. Gone are the days when people want large places to live in with high maintenance and cleaning costs. People want practical places to live in with great views and a lifestyle attached to it."

The plans are not yet finalised by there will be probably around 200 apartments. The lack of garden or yard will be compensated for to some extent by what he described as generous terraces - and by gardens at the ground level for residents' exclusive use, adjacent to the gym and swimming pool. The towers will have parking and Metropolis hopes to attract a wide range of retail and services outlets, from obvious ones like restaurants and delicatessens to less obvious ones like a laundry.

Most of the lower levels - those without the view - will be dedicated to office and commercial space, 4,000 sq.m. in all.

"Global Capital rents quite a lot of properties to international clients and we know that there is quite a shortage. Offices tend to be converted apartments. We will be offering all types of purpose-built commercial and office units to cater for the market."

The plans are to start demolition and excavation within the next few weeks. This should be done within four to five months, with around two and a half years for construction and a year to a year and a half for finishing.

Although the whole development will be undertaken simultaneously, the units will be put on sale in phases so as not to flood the market. "We have already started marketing overseas and have had a great deal of interest from the UK and German markets. Some people approached us before we approached them but we did not want to jump the gun until we had the outline permit in hand.

He is very excited about the potential for foreign buyers.

"In the last 20 years, we have seen the creation of a middle class from the old Communist states who never owned property before. They are making a lot of money from private enterprise and there is a huge hunger to own property outside their country. Their idea of investment is bricks and mortar because they associate this with security. They are not going to go for stocks, shares or bonds. Property is the real thing," he said.

"London and Paris is full of ex-Communist country citizens, paying ridiculous prices for property; we have seen the London market go up by 40 per cent in recent times.

"But while the top end buy in London or Paris, the middle class will start to buy in the Mediterranean islands like Cyprus and Malta."

He may be optimistic about the property market but he is not naïve.

"Property prices have risen quite substantially over the past 10-15 years, quite an unprecedented increase. I think we are in a consolidation phase. I cannot see prices continuing to rise at the same rate.

"Having said that, there is a shortage of lifestyle buildings. So you will have patches in the market. Modern fashionable buildings will be in demand by foreigners and locals as we have seen from pre-sales for Pender Place and Midi and Portomaso before that. But you will probably find that the apartments built on the site of old houses will probably stagnate and take a longer time to move.

"It will be a question of simple economics. If they are not moving fast enough, contractors and developers will have to shift their focus to what the market wants. I don't think they will remain empty because at the end of the day there is a right price for everything and supply and demand will determine the right level."

Metropolis Developments is made up of a group of investors: Global Capital have 42 per cent of shareholding, Mr Pace has 21 per cent personally, and the rest is held by a mix of local and overseas investors from the UK and Mauritius. The company chairman is Joseph Aquilina.
The development has appointed EM Architects, with Edwin Mintoff as lead architect, UK design firm GMW as design consultant and Capita Symonds (UK) as project managers.
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