Real Estate Brokerage: Why Professionalism and Ethics is the Priority
Frank Salt Spread 18102015
1. The Malta Independent on Sunday | 18 October 2015 41
Business & Finance
40 The Malta Independent on Sunday | 18 October 2015
Leading the rental
investment boom
T
he company’s team is
currently made up of
over 150 incumbents
– a workforce of over
100 property sales
and letting consultants, comple-
mented by the administration
team, all operating from 14
branches spread across Malta
and Gozo.
The Spinola branch, one of the
latest additions to Frank Salt
Real Estate, is strategically posi-
tioned on George Borg Olivier
Street on the St Julian’s seafront.
Managed by company director
Douglas Salt, it encompasses a
good mix of property consult-
ants, bringing together varied
experience from different fields
and industries, and all dedicated
to offering a boutique service to
their clients searching for that
special property. Their client
base is no different to that of the
other branches, with buy-to-lets
being a core market driver for
the team.
Sean de Domenico, a letting
consultant at the firm’s Spinola
branch, attributed the boom to
various factors, with the influx
of foreign nationals relocating to
the island being top on the list.
Malta is currently experiencing
an exponential surge in foreign
nationals moving to the island.
Foreign companies are opening
shop here due to the favourable
taxation incentives thanks to
Malta’s booming economy and
expanding industries, while in-
dividuals are relocating here
seeking greener pastures.
The demand is also augmented
by expats and others retiring or
taking up residence in Malta.
“For sure, the days where Malta
was considered mainly for holi-
day homes in the sun are over.
Today our weather, sun and sea,
are only a fraction of what the is-
land has to offer,” Mr de
Domenico said.
So how is this positive influx of
foreign nationals and their in-
vestment in Malta affecting the
rental market and rental prices?
“These are definitely on the in-
crease. Owners are aware of the
current shortage in quality rental
properties. A property that
would have been rented out at
€1,000 last year, will now easily
rent out at €1,200. It would be
safe to say that prices have in-
creased by 10 to 15% this year
for good quality properties. As
the supply is not as high as the
demand, prices will continue to
rise”.
“Some may argue that the in-
crease in prices is a negative fac-
tor, however the reality is that 90
per cent of our clients are foreign
and therefore pay similar if not
more in their native counties.
Look at London, Berlin, Paris
and all the other major cities in
Europe and compare them to
our property market, I can guar-
antee that you will not get a high
end property in London or any
of the mentioned above for
€2,000 like you can in Malta,
with beautiful sea views and the
highest of standards.”
Mr Salt believes that foreign
companies setting up shop on
the island have had an excellent
ripple effect on the property in-
dustry, both in terms of property
sales and rentals. “Foreign com-
panies opening an office in
Malta pay an effective rate of
five per cent tax on income,
which is unparalleled in Europe.
Corporate taxation in Malta is at
35 per cent; however sharehold-
ers are entitled to claim back
part or even the whole of the tax
paid by the Malta company. This
is what makes the Malta taxation
system attractive, ingenious and
unique.
Mr Salt also spoke of those ac-
quiring residency on the island.
“Malta offers a number of pro-
grammes which make the island
attractive for those seeking to
take up residence in a foreign
company, often either to benefit
from taxation incentives, or for
better access to the EU and the
Schengen zone. We also have a
strong citizenship by investment
option, which is actively being
promoted by the government
across the globe. All these pro-
grammes require that candi-
dates have a long-term place of
residence in Malta, either by
leasing a property or through
outright purchase.”
All this makes investment in
rental properties a hot opportu-
nity right now. “Very few peo-
ple know that rental investments
are currently yielding an aver-
age of five per cent rental return
per annum. This can go up even
higher, depending on the loca-
tion, the level of finishing, and
the original price the property
was acquired. People would ask,
wouldn’t it be safer to invest in
bonds? I don’t think it’s the case.
If you had to look at the most re-
cent issue of government bonds,
their yield was of some two per
cent. Looking at the private sec-
tor, the latest bond issue of some
month ago was of 4.5 per cent,
but with a catch, as the bonds
venture is unsecured. With a
buy-to-let property, you are
looking at an average rental re-
turn of five per cent in the short
term, to which you have to add
capital appreciation in the long
term. And if there is something
that the Maltese believe as most
secure in terms of an investment
that would have to be property.”
So what can a property agency
offer over and above a sensar
(broker) and the internet? Stefan
Borg, a member of the Spinola
branch team of property sales
consultants, explained that
Frank Salt “has much more to
offer. To start off with, you have
the goodwill that the company
has to offer. No other agency in
Malta has the strong reputation
that we have, one that we have
built on for more than 45 years
since the company opened shop
in 1969. When we take a prop-
erty on our books, we cover our
clients with a qualified contract,
thus ensuring that the clients’ in-
terests are well protected. Then
there is the marketing element;
with an agency such as Frank
Salt, you have a network of as-
sociates that are all actively pro-
moting your property with
clients. The same happens with
buyers, who know that when
dealing with Frank Salt, they
have complete peace of mind
and probably the largest selec-
tion of quality properties to
choose from.”
Mr de Domenico adds that
with Frank Salt Real Estate, the
service offered does not stop at
selling or renting out a property.
“Normally, our clients also rely
on our guidance throughout the
whole process. We help them
with all the other related stuff,
from getting a home loan for
first-time buyers, to getting an
internet connection or relocat-
ing pets of a foreign national
who is new to Malta. The list of
examples of how we try to sup-
port our clients is never-ending,
and this we do as an added
value.”
Frank Salt’s policy is team
work! Property Sales Consult-
ant Nadya Muscat explained.
“If a client has a specific re-
quirement that is not in your
area of expertise, thanks to the
teamwork at Frank Salt you can
go to a colleague who has more
knowledge in that area and get
help. This provides a faster and
more accurate result than if you
were stumbling along on your
own.” She explained that by
going through an agency, clients
can benefit from their experience
and an extensive database. “Once
a client explains what their needs
are, we can narrow down the
property search as close to their
specifications as possible, this
way saving time and providing a
better choice at the same time.
The agent also acts as a mediator
between the owner and potential
buyer, doing his/her best to sort
out any complications that might
arise, which is more likely to help
the sale go through, and in this
way also providing a sense of se-
curity.”
Nick Portelli, another sales con-
sultant, believes it is impossible
to see every property that is
available on the market, stressing
that this is where a property
agency comes in. “You not only
have to find the property, but
you have to understand its intri-
cate details. When you have a
good quality property it won’t
stay on the market for long.”
Looking at the prospects of the
property market from a general
point of view, Ms Muscat ex-
plained that the sales market is
also on the up and up.
“The past 18 to 24 months have
seen property sales gaining mo-
mentum, and not only when it
comes to buy to lets. National ini-
tiatives like the first-time buyers
scheme have helped the market
tremendously, with the effects
also rubbing off positively on the
second-time buyer market. Once
a first-time buyer buys a home,
that owner can start looking into
buying his/her new property.”
Stefan Borg pointed out that as
an extra initiative for second-time
buyers, Frank Salt Real Estate of-
fers such clients a cash-back of
€1,000 when they buy and sell a
property through the company
over a period of 12 months.
How about the quality of prop-
erties currently available? Ac-
cording to Mr Portelli, the most
recent addition to the Spinola
branch team, new properties
being built often reflect today’s
demand, with an emphasis on
quality finishes, spacious layouts
and outdoor space. A number of
developments are also being
built with the rental market in
mind, often offering smaller
abodes that cater for clients seek-
ing one or two bedroom accom-
modation, instead of the
conventional local demand for
three bedrooms.
Mr Salt added that the new
measures introduced in the 2016
budget will also boost interest in
older type properties, particu-
larly vacant ones in Urban Con-
servation Zones.
Discussing client-agent rela-
tionships, Mr Borg said that un-
derstanding a client’s needs is
essential. “It is only then that you
can provide the best quality serv-
ice possible.” The challenge all
consultants face, he said, “is win-
ning over the client’s trust in a
very, very short time”. Stefan has
been dealing in property for quite
a while.
Frank Salt has been in the mar-
ket for the past 45 years and Dou-
glas Salt described the agency as
being leaders in the field. “We are
strong in the foreign market,
where we have, by far, the largest
share on the island. We have al-
ways been dynamic and leaders
in adapting to market conditions
and taking advantage of new op-
portunities. Thanks to this we can
today also affirm that we are
leaders in rental investments
properties – with all our consult-
ants having received specific
training on how to look at prop-
erty from an investor’s point of
view. If one is thinking of in-
vesting in a buy-to-let, they
should definitely speak to Frank
Salt Real Estate first.”
Malta is currently experiencing a boom in rental investments Frank Salt Real Estate
consultants say, ultimately resulting in more investment in property with the aim of
renting rather than selling. Kevin Schembri Orland writes
HSBC helps
industry
navigate next
steps in
transport
and logistics
In 2004, only 11 export corridors
of magnitude greater than $75
billion existed in the world. By
2013, the number of such sub-
stantial trade corridors increased
to 22, intensifying trade routes –
intra-EU and North America –
but also along new routes. The
swelling of numbers is due to the
rise of China in global trade, ac-
cording to a recent report pub-
lished by HSBC.
Malta is perched on one of the
largest of the four trade corridors
between China and the Euro-
pean Union valued at $300 bil-
lion. The country can benefit
greatly by streamlining its ware-
housing capabilities which, in
turn, could become the backbone
of growth in the fast rising sector
of transport and logistics.
Experts from the sector ex-
changed ideas on the way for-
ward for the sector during a
breakout session ‘Logistics: The
next step’ during the recent EY’s
Malta attractiveness survey con-
ference. This breakout session
was supported by HSBC Bank
Malta plc which has been pro-
moting the potential growth of
the transport and logistics sector.
Michel Cordina said: “In 2014,
HSBC Commercial Banking be-
came the main supporter of the
inaugural TransLog Awards,
Malta’s first-ever transport and
logistics awards, and continues
to support the associated
TransLog forums. In June 2015,
HSBC Commercial Banking
launched a new €75 million
Malta Trade for Growth (MTFG)
Fund to help Maltese companies
take their business across the
globe. The new MTFG Fund fol-
lowed the success of the first €50
million trade fund launched in
December 2013.”
Also speaking at the EY confer-
ence was senior HSBC Trade
Economist Douglas Lippoldt
who shared with the audience
the changing pivots of global
trade flows and their connection
with macroeconomics and struc-
tural issues.
HSBC Commercial Banking has been fuelling the debate
around the important sector of transport and logistics and
supporting the TransLog events