MONEY JULY 2018 ISSUE 49

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T H E R E A L E S TAT E E D I T I O N ISSUE 49

10 路 COVER STORY

ROBERT RUNZA WALKING AMONG GIANTS 31 路 OPINION

EMANUEL DELIA THE RESIDENT GHOSTS

12 路 REGULATION

DOUGLAS SALT WHAT GOES UP MUST COME DOWN 14 路 DEVELOPERS

SANDRO CHETCUTI TWO SIDES OF THE SAME COIN

W E LC O M E

A year since the last election…

What exactly is happening on this little island? For decades we have joked that you would never believe that both party television stations were reporting on the same reality, so myopic are they. But has the short-sightedness actually got worse?

The Nationalist Party is still struggling with its brand, trying to work out how to set itself apart ideologically from the Labour Party, with the target audience (votes) of the moment seemingly those who have so far been left empty-handed as the economic manna rained down from heaven.

There is nothing wrong with that, of course, commendable and all that. But it has to ring true, especially to those who believe that they were pushed into dire straits during the Nationalist years in the first place. And it is hardly a broad enough base for a party seeking to lure tens of thousands back to their electoral fold.

Apart from a few Nationalist MPs who have managed to push a pick-n-mix agenda, it means that the analysis of the present government is being debated in the worst possible way: by social media trolls.

They are not going to want to hear this: but, here it is.

How is the government doing? The answer is multiple choice: a) It is doing great things. b) It has great ideas but is failing to deliver on them. c) It is doing good things which benefit some people but devastate others. d) It is doing terrible things. e) It is doing nothing. f) And it is doing too much.

All the above are true, whether the trolls of both parties want to admit it or not. And that is the paradox of this government: that

they have done so much which is positive that they think the electorate will forgive them the rest - with corruption, real or perceived, right at the top of the list. And that is not such an outlandish idea: it is exactly what happened in the election just over a year ago.

The government that has got the Kappara Junction done after decades of navelgazing is the same government that hopes that we will turn a blind eye to the sham that is the American University of Malta.

The government that got Gozo Channel out of its financial mess is also the one that has now got it into a mess with proposals for a fast ferry that is nothing short of a mockery of public procurement rules. The government that managed to sell Enemalta and stave off a debt default that would have rocked the economy is the same one that drew us into Azerbaijan’s greedy paws. The government that managed to get Air Malta, by hook or by crook, in line with state aid rules is the same one which flipped and flopped, wasting time with Alitalia and expanding routes before it had the planes to operate them.

The government is the one which reduced waiting times at Mater Dei hospital but put three others into the hands of a company which whipped off its kid gloves to reveal how to make millions of euro right under

the nose of the minister, who was – perhaps not surprisingly - turning a blind eye.

Roads are being done but trees are getting chopped down. Stagnated building projects are being approved but cranes block dozens of junctions. Households are boosting their disposable income with rentals of property left vacant for years while tenants are being squeezed out of the market.

Alas, this is not what we want to hear. We want the good guys to be always good, and the bad ones to be wicked and beyond redemption. This merely encourages the pro-government trolls to trot out one of the good things every time an anti-government troll highlights something bad.

Then comes the ‘what-aboutism’ about all that had happened under the Nationalist legislatures, which prompts furious howls of protest, until everyone gives up trying to shout over the din and they all go home none the wiser.

They say that people get the government they deserve. In this case, we have got both the government and the Opposition that we deserve. We should be aiming much, much higher.

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4 · MONEY

ISSUE 49

T H E R E A L E S TAT E E D I T I O N

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CONTENTS

10

12

COVER STORY

REGULATION

WALKING AMONG GIANTS

WHAT GOES UP MUST COME DOWN...

OR DOES IT?

The telecommunications market seemed impenetrable a decade ago, but for Ozone managing director Robert Runza this merely meant that there was the need for a new operator with a new approach.

Photo by Chris Sant Fournier

26 ANALYSIS

A VERY BOUTIQUE OFFERING Property manager Thomas Cremona analyses the growth of the boutique hotel concept in Malta, and explains the challenges that smaller properties face.

34

14 DEVELOPERS

ANALYSIS

The head of the Malta Developers’ Association Sandro Chetcuti has very clear ideas about the role – but also the rights – of the various stakeholders in the property industry. He explains to Giselle Borg Olivier that development starts with the owners who want to sell their property, and not with the developers.

Giselle Borg Olivier cuts through the hype and gives a sober analysis of what has happened to the property market over the past years, drawing on statistical and economic data.

OPINION

THE RESIDENT GHOSTS Manuel Delia laments that the take-up of properties by passport-buyers who don’t intend to live here is squeezing out the Maltese looking for their own homes.

COUNTRY REPORT

WHEN IN ROME The spectre of a snap election melted away as quickly as a Neopolitan ice-cream in August a few weeks ago. But will doing away with the uncertainty mean that the problems are over for Italy? MONEY analyses the situation.

GETTING DOWN TO BASICS

31

GREEN BUILDINGS: FROM NICHE TO MAINSTREAM

52

20

TWO SIDES OF THE SAME COIN

ENVIRONMENT

Maria Giulia Pace sympathises with the arguments for and against construction, but argues that the solution does not have to be extreme.

Douglas Salt, the head of the Malta Developers’ Association real estate section, was hopeful that the momentum lost through last year’s electoral campaign would begin to pick up again. He explained what he hoped regulation would achieve.

40 ECONOMY

BUILDING ON SOLID FOUNDATIONS Attempts to define the current property market are all too often not nuanced enough to capture its complexity.

Patrick Debattista breaks the arguments down into their different contexts.

54 OFFICE DESIGN

A BIT OF PLANNING PAYS OFF HANDSOMELY Michael Azzopardi has already shared some of his insight into what makes a design truly special. In this issue of MONEY, he puts the focus on office design.

56

64

MARKETING

HARNESSING THE POWER OF KNOWLEDGE

LAST WORD

Marketing campaigns do not only need to be effective, they also need to be profitable. Richard Muscat Azzopardi has insider tips on how to make sure.

The Bluesman ponders the optimism that started with Woodstock and how it led to the political apathy of the present legislation.

6 · MONEY

STRIKING THE WRONG CHORD

ISSUE 49

T H E R E A L E S TAT E E D I T I O N

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C OV E R S TO RY

The telecommunications market seemed impenetrable a decade ago, but for Ozone managing director Robert Runza this merely meant that there was the need for a new operator with a new approach. → How has your company evolved?

Our roots are grounded in questioning the status quo of the telecoms market.

Our vision at conception as a telephony operator, in 2006, was driven by the evident need for an operator which looked at telecoms as a customer-driven service and not as a mere utility – as had been traditionally shaped by the big incumbent players.

network giving us full control and flexibility of our products, services and channels without having to rely on any other network.

We started by utilising the third-party networks of the operators and, in 2009, we made our next bold step towards network independence, setting up our own infrastructure using fixed wireless technology. By being disruptively innovative we created a new nation-wide

In parallel with this, we took a strategic decision to shift our focus onto the B2B segment and build our organisation entirely around what a business client requires from its telecoms provider. Since then we managed to build a value proposition which today serves some of the largest business operators in the country, while experiencing month-on-month increases in terms of our client-base. This organic growth came about by way of our reputation and the clearly differentiated approach to B2B telecoms, providing material cost-benefits while delivering tailor-made solutions for our clients, leveraging the advent of cloud-based

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T H E R E A L E S TAT E E D I T I O N

services to remove the need for capitalintensive PBX systems on-premises.

This momentum was further propelled by two additional developments. Firstly, as early as 2011, we looked at wi-fi as a potential growth platform which would eventually shift our business model from one based on payment for access to one driven by marketing. Today we own a platform which is second to none in this domain. Secondly, in 2015 we took over the telecoms operations of SIS Ltd which gave us a larger scale of operation and offered evolution into a different league.

This journey has now brought us to the point where we can take our fixed wireless infrastructure to the next stage, leveraging our home-grown B2B specialisation and shifting the gear to grow further and faster.

Without question it has been a great experience to date, with so much more opportunity lying ahead. → What is your understanding of the current situation in the telecoms market?

I believe that telecoms was – and will still continue to be – the vehicle for growth of the digital economy. Any modern country today is banking on its capability to be part of the global digital market since digital

C OV E R S TO RY

creates value-added jobs and industries which pollute much less. Fixed and wireless telecoms make this happen, meaning the market will keep on growing in all its segments.

Nevertheless, the market dynamics and value generation will change and evolve over much shorter cycles, largely influenced by the way technology is applied to use the same telecoms infrastructure. High-speed infrastructure and unified communications frameworks will become the platforms through which disruptive innovation will not only impact the vertical economic sectors in which they are developed, but also shape the demand and pricing models for telecoms going forward. Suffice to say that in a few years, messaging shifted from a revenue-driver to an app-driven operation, revolutionising the way people communicate while practically wiping out massive revenue streams which telecoms operators had based their future models on. → How is the market reacting to disruptive technology?

Connectivity, competition, and convergence are redefining every aspect of the telecoms landscape from the way networks are designed, built and maintained, to the content flowing through, and the channels that enable users to access services. Before long, everyone and everything will be connected, creating an explosion in network traffic, a rapid increase in the number of connected devices and telecom companies racing to upgrade their networks to 5G in an effort to provide the necessary speed and bandwidth. Telecom companies may be accustomed to change – but the accelerated speed of disruption is something they haven’t experienced before, and many are struggling to figure out how to navigate the numerous disruptive technologies and the impact they will have on their organisation.

While most telecom leaders are optimistic about the opportunities disruptive technologies provide, they also have many concerns about the impact of these technologies on their business. Competitive pressures are driving these fears. This includes competitors from within the industry as well as new competition from disruptive technologies brought into the sector from other industries.

Over-the-top (OTT) development is outpacing the ability of telecom companies to adapt. Companies from other sectors, including many technology companies, are expanding their services in this space, in the process consuming a significant proportion of available network bandwidth.

The insatiable demand for content by consumers is forcing operators to invest heavily in increasing network capacity and creates a vicious cycle, with much of this capacity being further exploited by OTT players – rather than the operators themselves. → How do you compare Malta’s telecom industry to the international scenario?

Keeping in constant view our limited size and market, we have made strides over the years. However, along the years the big players shaped the market into one which is more akin to a utility company rather than a technology one. One-size-fits-all packages and rigid approaches were the order of the day. I am extremely averse to the model wherein a customer (especially a business operator) is treated as an account number and in fact built our company on the credo that we have to keep all this in mind and constantly go in the opposite direction.

Our approach has yielded dividends and, more than ever, today we are increasing our client base simply on the basis that companies want a telecoms solution for which they pay fairly and as they go, clearly delivering value and quality.

I also believe that there is ample room for collaboration in the market, especially at

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There is ample room for collaboration in the market, especially at infrastructure level between the major operators.

infrastructure level between the major operators. The country will require massive investment for continuous improvements which may gradually become questionable in terms of return. Hence infrastructuresharing may be a route we have to look at in the future as a digital nation. → How many staff do you employ? How does your business model allow you to compete with the major players who enjoy economies of scale?

Today we employ 22 people who share a common corporate spirit in bringing value to the B2B telecoms market by reinventing the paradigm of how the service is delivered and priced. Our model is based on pricing fairly and ensuring that we transmit the value to our clients and not retain it in our bottom-line. This enables us to attract clients exponentially and leads us to being entrusted with solutiondevelopment for our clients, ensuring that the telecoms infrastructure provides them with the adequate level of support and application. → What have you got planned for the future?

The future is extremely exciting at Ozone.

We are currently assessing our strategic path for growth with a number of routes, all of which will result in one outcome: the evolution of a specialised B2B telecoms operator delivering value to a full range of businesses from small offices to large distributed enterprises.

So, watch this space!

MONEY · 11

R E G U L AT I O N

Two years ago, the government proposed a White Paper on how to regulate the real estate agency. Since then, the market has grown dramatically, making the need to avoid amateurs more pressing than ever. Douglas Salt, the head of the Malta Developers’ Association real estate section, was hopeful that the momentum lost through last year’s electoral campaign would begin to pick up again. He explained what he hoped regulation would achieve.

The regulations for real estate agents have not yet been published. Why are they needed?

The estate agents are in agreement that the time has come to formally regulate the industry.

single investment most people make in their lifetime.

A set of rules and guidelines of conduct between agents and clients as well as agents between themselves has therefore become increasingly important, together with a standard for training.

Today, thousands are employed in the industry both local and increasingly foreign.

Not all are necessarily giving the public a professional service deserving of the largest

This will help to ensure that together with the relevant licensing and disciplinary board standards will increase across the industry

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T H E R E A L E S TAT E E D I T I O N

and cowboys will lose the ability to operate.

One of the controversial issues was allowing real estate agents to get involved in valuations. Why is that such a big thing?

I wouldn’t say that the fact that agents want to give valuations is controversial.

The property industry is our profession; we work and live it every day, feel the pulse of what is going on and changing trends in real time, know what is selling and for how

R E G U L AT I O N

much. We can therefore compare to other sales in the area and compare finishes etc., know what demand there is and at what prices, and therefore are the better placed to give a market value to a property.

There are now real estate branches on every corner. The White Paper suggested some sort of filter to ensure that they were trained and professional. How is that actually going to be done in practice?

The White Paper proposes a system of licensing. Obviously, there has to be some form of cut off. It was therefore decided that those with over two years’ experience would be automatically licensed.

Those with two years and under would get a temporary licence and, once they undertook the appropriate course, would get a permanent licence.

The licence could be revoked if multiple cases of malpractice appear in front of the proposed disciplinary committee.

The details and content of the course have yet to be worked out.

Has all this spelled the end of the traditional sensara?

The rental market has passed through a period of undersupply.

Landlords have taken advantage of this and are renting properties at above market value in many cases. properties at above market value in many cases. The building industry took a while to ‘up’ production after a period of slowdown.

Many properties were sold on plan for rental investment and will be coming on the market soon. This will result in a lowering of the overpricing, with most properties returning to market rental value.

What can be done to ensure that the Maltese are not priced out?

The White Paper did not spell the end of the sensara, as long as the sensara remained the traditional word of mouth one. It contemplates that the moment this evolves into advertising, office, website etc., then they would need to fall under the regulations.

The rental market will follow market trends and there is little that can be done, as price regulation is a definite no no.

The Malta Employers’ Association said that the population could rise to 700,000. Is that sustainable in terms of infrastructure?

The demand for rent is driving the construction sector into a frenzy. But prices are now being driven up too, to the extent that foreign workers are being driven away or else leave after a year. Are we at risk of overheating?

700,000 is a large amount of people for such a small island. The number is currently just over 520,000. I can’t see it rising that high. Of course, with tourists put into the equation we exceed that number on a daily basis. The infrastructure is quite clearly struggling to cope and needs upgrading across the board. We also need to learn what maintenance on an ongoing basis is all about and also be more disciplined when

The rental market has passed through a period of undersupply. Landlords have taken advantage of this and are renting

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it comes to cleanliness. More open spaces and parks are a priority.

You suggested in a recent Times Talk interview that smaller apartments should be allowed to reflect the needs of those coming to work here. Could you explain?

People coming to work here in the main have no intention of living here permanently. If they are here alone or with a partner, they are used to - and happy to live in smaller apartments than locals would be. Therefore if size limitations are reduced, on the condition that the block is used exclusively for rental, more apartments can be built on the same piece of land and help ease the problem somewhat.

Economies are cyclical. What happens when the boom is over and we are left with 300,000 empty properties?

One hopes that the economy will continue to perform and that the micro economies within the macro economy are updated and new ones sought to replace the non-viable ones as the economy progresses and its elements change over time.

MONEY · 13

D E V E LO P E R S

Photo by Chris Sant Fournier

TWO SIDES OF THE SAME COIN 14 · MONEY

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T H E R E A L E S TAT E E D I T I O N

Giselle is a freelance writer, proofreader and social media marketer who lives on Instagram and cappuccino. Runs Content for Success.

D E V E LO P E R S

The head of the Malta Developers’ Association Sandro Chetcuti has very clear ideas about the role – but also the rights – of the various stakeholders in the property industry. He explains to Giselle Borg Olivier that development starts with the owners who want to sell their property, and not with the developers.

The MDA had commissioned a study on the property market some months ago. Are you now happy that you have all the information that you need?

We have the information that we need but obviously we must commission a follow-up on that study. Just the study itself is not enough. The follow-up should happen in about two months’ time.

What are you hoping to learn from the follow-up?

The most interesting data that emerged from the study is that around 22 per cent of Maltese families work either directly or indirectly in the property industry. The study found that there was no property bubble, but we are monitoring the industry precisely because we want to ensure that one isn’t being created.

The public outcry against development has grown tremendously...

Everybody is selling property to developers, so I don't believe that statement. This is a perception, not the truth. Property and land owners are not developers: they are the people themselves, and we now know from statistics that more than 80 per cent of people in Malta own property/land. Those people, besides wanting to live in their ordinary residence, also want their property to appreciate. A terraced house which used to cost €200,000 a few years ago, and

which could not be sold, is now being put on the market for €500,000 and is selling immediately.

everyone. It is crucial: when somebody gets away with ignoring some policies that gives a very bad image to the industry in general.

... to be developed?

What is the association’s role? To urge your members to be prudent? Or to lobby the government to allow them to get what they want?

Yes, to be developed. The developer is only the mastermind who buys land and properties; he buys the services from the people and the contractors, and he will make ends meet. It's unfair to perceive developers as the culprits because without developers nothing can be done in the property market. A few years ago, I remember hearing people grumbling and moaning because there were a lot of vacant properties; now we are hearing the same moaning and grumbling because those vacant properties are being restored or developed. So what do we want? Do we want building eyesores? Or do we want to make use of these properties? The media continues trying to politicise the property industry, which isn't fair.

Town Square was stopped, and there were 4,000 objections to the db project in Pembroke…

In fact, we are the opposite of how some people try to paint us. We lobby in the interest of the people and of the nation and we are very fair and prudent as an association, or at least, we work towards it.

But we believe that a healthy investment and a healthy atmosphere needs a code of ethics. We need to lobby for people who are end users, for a better infrastructure, for a better environment, and we need to incentivise all those developers who are doing a good and professional job. So, we don't lobby only in the interest of the developers. In fact, we asked for incentives like the first-time buyer scheme and the second-time buyer scheme, and a better and fairer taxation for landlords – who are not developers, they are end users who invest in apartments.

Townsquare wasn't stopped because there were objectors; it was stopped because there was missing information vis-a-vis the Environment Impact Assessment and other studies. The Planning Authority cannot grant permission if there is not compliance with all the policies. That's why the MDA insists that policies need to be respected by

We tried to lobby for the PA to have grounds on which to protect our heritage like village cores and old houses of character – I believe that we managed to succeed there because there is now a scheme through which you can acquire a grant of up to €25,000 for each property for restoration. We are also urging the

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MONEY · 15

D E V E LO P E R S

government and the authorities not to extend the boundaries of the building zones. These proposals are all coming from the MDA and people don't appreciate that. We don't want to extend the building zones.

Our members are trained, and we insist that our members observe the rules; so, if a property is scheduled and cannot be touched, then they just won't buy it.

However, if it can be renovated and it's feasible then they'll go for it.

Why do you think that there's this negative perception about the MDA?

We respect the rules and we insist that the rules should be the same for everyone.

The perception was created because there was such bad planning over the past 40-50 years. People are afraid because they do not believe that there is actually a lobby group that cares for the country. In the past, there were politicians from both sides who managed to ruin the streetscapes and the natural heritage like the valleys. Most of our valleys are built up because there were bad decisions made.

...and are they the same for everyone?

We are against all that but it's never too late. We hear a lot of people just observing and pointing fingers. We must learn from the past and we must find a way to move forward.

I am not here to try and put doubts on that.

I can only speak about facts, so if I don't have the facts then I cannot comment.

Who are you referring to when you say 'experts'?

There is the Superintendence of Cultural Heritage, the Cultural Heritage Advisory Committee and the Planning Authority

The scheduling of properties depends on the experts, not on us. They know how and why they schedule such properties.

who decide which properties can be demolished, developed or restored. What I can tell you is that the people who own these properties try their hardest to sell these buildings to developers. They even include a condition on the preliminary agreement which is subject to demolition and re-building. The property owners sometimes know that their houses cannot be demolished but they keep insisting and go from one developer to another to try and find an investor. So who's to blame here?

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Is there one consistent rule for everyone?

How did that rule apply for Villa St Ignatius and for the Sea Malta building?

I can inform you that the developers sell nearly everything on plan, so the problem is not the developers. If there is a problem, then it's a planning issue. Developers will not build until they sell their properties.

Developers pay the contributions related to infrastructure, drainage and main sewers, parking, etc; however, the issue is that for several years all these monies were paid yet we hardly saw any results.

To get a permit you need to pay a lot of money to the PA – not simply for

A few years ago, I remember hearing people grumbling and moaning because there were a lot of vacant properties; now we are hearing the same moaning and grumbling because those vacant properties are being restored or developed.

So why are applications still being granted for developments in valleys?

Because there are now schemes in place and if the valley is already committed and is within a building zone then permits must be granted, as long as people are respecting the policies. Some people paid a lot of money to buy properties to be developed, but if the original development decision was wrong, it's not the fault of the proprietor. This is common sense. If I buy a car and pay for the driving licence and the insurance, then don't tell me that there are too many cars on the road because it is within my rights to drive that car.

Many of today’s developments are being advertised as offering a ‘lifestyle’. Surely it is not in your members’ interest to have fabulous apartments which will remain empty because of the surrounding infrastructure with regards to parking, open spaces, sewage and poor water pressure?

What is the MDA doing to prevent this?

T H E R E A L E S TAT E E D I T I O N

the planning permit but also for all the infrastructure contributions – so why do we argue with the developer when he's paying upfront?

You cannot stop development: houses and properties which were built 40-50 years ago must be demolished and rebuilt because people used to live differently before. Families used to own big houses but today our lifestyle has changed; both parents go out to work, and children attend school (or child care) from an earlier age.

D E V E LO P E R S

If I buy a car and pay for the driving licence and the insurance, then don't tell me that there are too many cars on the road because it is within my rights to drive that car.

People can no longer afford to own large houses which will only be used at the weekend or just for them to have dinner in the evening and sleep, meaning that a lot of big houses are completely unsaleable for individual use.

Do we want to continue building in the countryside? No. But we must make use of already-built property which is not being used and re-develop it. Even if we don't demolish and rebuild, everything has a time span, so every 10-15 years you need to refurbish a property.

You mentioned the traffic impact assessment earlier. How is the St Julians/Paceville area going to cope with the traffic that is already being generated by the large developments in the area such as Portomaso, Pender Gardens, the Zaha Hadid development?

I’m not competent to say what can or cannot be done, I can just give my opinion.

Although we hear many people who say that they are disappointed by these plans, the location remains the most sought-after and most valuable area in Malta. Some people despair because they don't want such density, yet there are many others ready to put their hands in their pocket and pay for the location. For every person who is grumbling, there is another person who is investing, and we're talking about millions

of euros. So how is it that such places, which we deem to be horrible, are the first to be sold?

Do you think that these apartments are worth that price tag?

It's demand and supply. It's not for me to say what their worth is. At this time people are buying so it must be worth it. I really believe that the best formula is to let the market run its course. People are coming from abroad to buy property in those areas.

When we try to take them to more rural areas like Zebbug, Siggiewi or Qrendi, they refuse.

What is the MDA’s relationship with the Environment and Resources Authority?

Last week we had a very fruitful meeting with the ERA where we gave tangible and effective opinions and ideas on how to recycle construction material and waste.

We believe ERA is an important tool for the environment and that without a good and healthy environment our investment means zero. We don't want people to invest and then ruin the environment because everything will be worthless. And this doesn’t relate only to the environment, but even to the overall security of the country.

Traffic, which is already a problem, needs to be addressed. Education is important for the country to continue being competitive.

Our attitude as a population towards keeping our country clean all contributes.

The Kamra tal-Periti has taken the side of the eNGOs when it comes to protecting the country’s heritage. How has that affected the MDA’s members? Has it caused friction between the developer and his architect?

We are always in touch with some eNGOs and even with the Kamra tal-Periti but most of the architects are also members of the MDA. We have prominent members in the association who are architects and who are

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also developers or work in construction.

I believe that the Kamra tal-Periti and the MDA should work together because at the end of the day we are their clients. With Prof. Torpiano and with recent presidents, we've come a long way and have had very valid arguments in common, so I don't know why they don't choose us as the main key player to lobby in the national interest.

Sometimes there are agendas which we might not know about, but the most professional architects in Malta are part of our consultancy team.

Describe Malta in 2028…

It will not be recognised. ... and is that good or bad?

It depends on how you see it. If you ask me what I’m going to look like in 20 years' time you could either see a wrinkled, old man and say, 'you're finished', or you could see a man who is full of experience.

People trying to stop change will be disillusioned. We cannot stop the world from turning. The most important thing is that with change comes improvement: we should improve planning, the way we build, the method statement of projects, respect people living in their houses and improve how we work to avoid damage to third parties. We must do things in the right manner and more professionally; however, the Maltese islands will change, and nobody can stop that.

Do you include Gozo with this change?

Gozo is also changing, but at a slower pace.

If there is a physical link built between the islands and the economy in Gozo booms, we will see a lot of change there too.

People want progress; some people cry with nostalgia. We must accept that times move on.

MONEY · 17

PROMO

Together We're Better A team is only as good as its members.

Meet some of the people who are building on RE/MAX Alliance’s success.

Michael Bonello Franchise Owner, RE/MAX Alliance

Michael Bonello, founder of RE/MAX Alliance, opened his first RE/MAX Alliance outlet back in 2006 at the Tigne seafront in Sliema. Over the past 12 years, he has managed to attract the industry’s leading managers, worth a whopping 246 years of experience between them, building up a family of 165 members operating from seven strategically-located outlets around the Maltese islands.

Michael – along with his business partners Paul Sammut, Gordon Valentino, Angelo D’Arrigo, Duncan Stivala, Aidan Xuereb, Michael Galea, Neil Carter, Matthew Pace, Fabien Debono, Jay Jay Micallef and Brian Magri – has managed to build and drive the Alliance family towards a successful and secure future which today has become “the team to do business with” in the real estate

industry. The third quarter of 2018 will see the birth of another two RE/MAX Alliance outlets in Santa Venera and the lovely Xemxija seafront.

At RE/MAX Alliance we believe in business transformation and this all starts from understanding our purpose, vision and mission.

Our purpose: At RE/MAX Alliance, we are a workforce of individuals with a common denominator: PURPOSE. Business values are the core principles or standards that guide the way we do business. They sum up what our business stands for and what makes it special. Our business values are our constant, that gives us stability and above all makes us members of ONE FAMILY. Our vision: Every individual at RE/MAX Alliance must have the qualities and attributes to only focus on our customer’s wealth and peace of mind, whether

buyers or sellers. We will always deliver this thanks to our ability to facilitate real estate transactions through a transparent professional process, in line with European standards that are second to none.

Our mission: To maximise our customer’s wealth through our ability to facilitate a balance between property market value and emotional empathy. We secure our customers' peace of mind by satisfying their true needs, including budget, timing, the quality of the property and a positive experience of the process. We provide job security and financial stability to our workforce through our continual investment in people innovation and in our brand.

Frank Borg

Alliance Training Academy Manager, RE/MAX Alliance Frank Borg has founded his career on relationship building, creative problem solving, and strategic thinking in the field of sales and customer service, with the one aim of achieving win-win results for buyers and sellers. He studied in the UK and received further specialised training in the US. Frank has instructed groups via lectures and workshops throughout parts of Europe, Asia and North and South America. He has authored and published books and formatted a variety of audio

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content specifically focusing on sales and related topics.

Earlier this year, Frank took on the role of managing the newly launched RE/MAX Alliance Academy. Some of the academy’s objectives are to ensure that new sales associates are given the necessary knowledge and skills to make a success of their new career. In this way, individuals joining the real estate industry with RE/ MAX Alliance are equipped with practical and innovative performance-based skills that will give them the best foundation from which to springboard into the industry and hit the ground running.

Knowing the choice of companies available in the local real estate arena, Frank enthusiastically affirms that “RE/ MAX Alliance is a clear leader in the field, offering new and established associates an unparalleled advantage for success in this field”.

Anyone interested in joining RE/MAX Alliance, or who simply wants to find out more about joining the real estate industry should feel free to contact the academy on 2265 0000 or e-mail academy@remaxalliance.com.mt.

Gordon Attard

Corporate Operations Manager, RE/MAX Alliance Earlier this year, RE/MAX Alliance proudly introduced Gordon Attard as its new corporate operations manager. Gordon will continue to strengthen and sustain the company’s purpose, vision and mission with the aim of continuous growth. Gordon joined RE/MAX Alliance in 2015, where from day one he demonstrated his capability on various levels including technical, organisational and customer relations. His new role will focus around systems and operations, structural planning and implementation for the nine RE/MAX Alliance outlets, as well as performance analysis, guidance and management of the company’s administration team.

“Over the past 24 years I had the opportunity to work with Malta's leading companies both in the real estate and hospitality industries. This is where I managed to accumulate an abundance of experience and knowledge in areas such as business development, sales, training and induction delivery, marketing, and

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corporate management systems. My passion in what I do drives my commitment to help others achieve their goals and bring results home.”

Ivan Bartolo

Group Mentor, RE/MAX Alliance In a world where technology is positively disruptive, RE/MAX Alliance has the pleasure of welcoming Ivan Bartolo to the group. Ivan is a specialist in the field of technology and business, offering tremendous value through his knowledge and experience. He will be assisting the management team at RE/MAX Alliance by delivering cutting edge skills on leadership and management. Parallel to this, Ivan will be working with the core team to improve the business infrastructure by implementing technological and digital processes. Ivan’s mentoring will strengthen and sustain the company’s mission and vision, and further develop the growth of the RE/MAX Alliance Group.

MONEY · 19

Giselle is a freelance writer, proofreader and social media marketer who lives on Instagram and cappuccino. Runs Content for Success.

A N A LYS I S

GETTING DOWN TO

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A N A LYS I S

Giselle Borg Olivier cuts through the hype and gives a sober analysis of what has happened to the property market over the past years, drawing on statistical and economic data.

Anyone with a functioning pair of eyes can see that the rate of construction has skyrocketed in Malta, if you excuse the pun.

Cranes are a permanent fixture of our skyline and construction vehicles are a common sight on our roads as they trundle off to their designated sites for another construction job.

However, while the actual buildings are rising, what is happening to the property market in terms of pricing?

According to 2017 figures from the National Statistics Office (NSO) which were released in early 2018, the Property Price Index (PPI) increased by 4.8 per cent during the first quarter of 2017 when compared to Q1 /2016.

There was a 4.5 per cent increase in the second quarter of the year, which slowed to 4.1 per cent between the months of July and September 2017. This rate of increase was in line with that registered in the eurozone, which also stood at 4.1 per cent in Q3/2017.

The PPI shows the price changes of residential properties purchased by households. PPI data covers apartments, maisonettes and terraced houses, accounting for 75.6 per cent, 20 per cent, and 4.4 per cent respectively of the properties considered for the compilation of data.

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When it comes to locality, it likely comes as no surprise that the largest share of property transactions occurred in the areas of Birkirkara, Msida, Gzira, Ta’ Xbiex, San Ġwann, Pembroke, St Julians, Sliema, Swieqi and Għargħur (these are grouped into two regions respectively).

The other top three locations for property transactions occurred in the region comprising Zabbar, Xgħajra, Zejtun, Birzebbuga, Marsascala and Marsaxlokk.

Meanwhile, the lowest transactions were recorded in the region of the Three Cities plus Kalkara.

Studies from the Central Bank of Malta explain that the residential property market continues to be propelled by strong economic growth and an environment of low interest rates. Since the introduction of the Individual Investor Programme (more familiar as the passport programme), there has been an increase in demand for property, while the fiscal incentives for first-time buyers also contributed to this higher requirement.

Data shows that there was no decline in Maltese property ownership.

MONEY · 21

A N A LYS I S

Both house prices and rents have risen by around the same amount since 2006.

Taking the IIP impact into account on a sole basis, the results show that the properties affected are on the high-end segment of the market and therefore the impact is more contained.

The increase of foreign workers on the island has also had an impact on the property market with more dwellings required in certain areas of the island.

Central Bank data shows that 2017 was a lucrative year in terms of the property market for sellers; however, it also means that property prices have been slowly, but steadily, increasing.

This is corroborated by Eurostat data which shows that house prices in Malta increased by 4.3 per cent during the third quarter of 2017, when compared to the previous quarter of the same year – this was the second highest increase in the EU. And it is not entirely a recent phenomenon.

The trends have been slowly but steadily upwards: a Central Bank assessment on the Maltese housing market states that house prices in Malta nearly doubled between 2000 and 2015 which has led to growing concerns about the possible existence of a housing bubble.

The growth has not all been passive: the housing market in Malta was given a boost over the years with the introduction of a few government measures implemented in 2013 to stimulate the market. The appeal to increase home ownership in Malta, however, began way back in the 1980s with this being one of the government’s targets.

22 · MONEY

While these initial units were provided through the Housing Authority, government assistance declined by the early ‘90s with people using property as a means of investing their savings due to the limited alternatives available. This development led to a surge in house prices for that decade.

According to advertised prices, the market hit a peak in 2007.

Despite the high price tag, data shows that home ownership grew from 60 per cent in 1995 to around 75 per cent in 2005. Eurostat figures for 2014 put home ownership at 80 per cent, which still stands today.

Interesting results from the Central Bank’s index of advertised prices for today’s residential property market show that, despite these figures rising at a faster rate than those based on contract prices in recent quarters, these might be due to the tendency to boost asking prices during periods of relatively high economic growth, and they are therefore not necessarily indicative of the actual selling price.

This above point is probably the crux of how people view the property market with the general feeling being that both the buildings as well as the prices have risen tremendously and many asking whether there is the actual demand for such a construction boom.

Developers certainly seem to think so, with highrise luxury apartments being erected in the most sought-after regions in an effort to attract the IIP crowd, and apartments

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filling in every nook and cranny to make the most of the inflated rental market that is being fed by the influx of foreign workers.

Aaron Grech, chief economics officer at the Central Bank of Malta, views this construction boom with a different mindset, arguing that it is the availability of property which will actually stabilise the rental prices and make housing more affordable generally. Answering questions put forward during the presentation of the 2017 Central Bank of Malta annual report, Mr Grech pointed out that money being made through rents was being injected into the economy, thus helping it overall.

Furthermore, he said that data showed that there was no decline in Maltese property ownership.

Data shows that rental prices have increased cumulatively by around 23 per cent over the past six years – different regions command different prices and therefore increases. However, both house prices and rents have risen by around the same amount since 2006, which suggests that the more recent increases in rent prices are actually not out of line with fundamentals.

As buildings continue to rise and the crane remains our ‘national bird’, it will be interesting to see whether the basic economic principle of supply and demand remains one of the determining factors when it comes to the price tag for a property.

PROMO

Diane Izzo’s company DIZZ seems to be opening new stores everywhere that matters. She spoke to MONEY about her business model.

You seem to have exploded onto the fashion retail scene. What were you doing before?

Before what you describe as my “explosion on the market”, I was employed in a retail company and responsible for sales. One day, during a trip overseas with my husband Karl, we came across a Terranova store and we immediately thought this could be interesting concept for the Maltese market.

We immediately got in touch with the mother company and a few months later we inaugurated the first store.

24 · MONEY

I had always dreamt of being involved in business following in both my father’s and grandfather’s footsteps and now it is actually happening.

What made you decide to get into this very competitive scene?

In truth, every business is very competitive.

Possibly, retail fashion is a more aggressive business to be involved in than others.

Nonetheless, I was always determined to continue growing within this sector because I was convinced that we had a

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winning formula here. After the opening of the first store, we successfully opened more stores under the Terranova & Calliope brands and introduced LIU.JO and Caffe Pascucci to the local market.

How do you choose your brands to make sure that they complement rather than compete with each other?

We keep a constant watchful eye on international market trends in the business and follow carefully which brands are becoming more popular through their

PROMO

We must ensure that our offering is as complete as possible in order to always satisfy the desires and demands of our loyal customers. design and marketing strategies. We do have brands that appear to compete with one another but, on the other hand, we must also ensure that our offering is as complete as possible in order to always satisfy the desires and demands of our loyal customers.

Hence, we do everything possible to have ‘something special’ for ‘that someone special’ whenever it may be required. This is why I feel that our brands complement one another. Whatever we do is aimed at meeting the expectations of those persons who make our business thrive.

All the surveys in the past few years indicated that malls were beating high street shops hands down. What is your philosophy?

We agree with this belief which is scientifically proven. This is why we have a large presence in the most important shopping malls in Malta and will continue to make our presence even more dominant in these areas.

Nonetheless, I recognise the fact that some customers feel they want to experience the ‘boutique feel’ when they are choosing some piece which is important to them for a special occasion. This is why we have a number of stores dedicated to our higherend brands. People love walking into a store where they are treated with that extra bit of attention and that is what we want to provide.

We still do not have any true couture labels in Malta. Will it ever happen?

Personally, I feel this is something outside the reach of our market. Considering the

exclusivity of the brands and the extremely limited market in Malta, I believe this is an area which will remain available only in the very high market exclusive and select shopping streets of the major fashion capitals. Milan is a perfect example as you won’t even find such an offering in Rome.

The same with Paris and London, as you will not find anything of the sort in any other major cities of either France or England.

In September 2016, you took the plunge and issued a bond. Was it a tough decision for someone used to working in a family company?

The bond issue was made at a time when the continuous expansion of the DIZZ Group required support in order to positively conclude the great opportunities which suddenly became available and saw the addition of a significant number of leading brands to our portfolio. This was also a means to sustain the development of the new operational hub from where the hroup will shortly be operating. These are not difficult decisions to take, they are simply based on what is necessary at certain specific times. There may be other opportunities in future which will necessitate taking a similar approach on the market.

What is your future strategy for growth?

What do you see as DIZZ's greatest strength and greatest threat?

The group is now at a point where we must concentrate on the consolidation of our current business. I must stress that should important opportunities present themselves we shall certainly consider them. We are actually working on a couple of possible prospects at the moment and

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they must be truly important in order not to detract from our present focus.

The strength of the DIZZ Group is the passion with which we run our business and the people who help us do so on a daily basis in every one of our stores. The biggest threat is complacency and it is my task to ensure this does not set in by keeping all my staff extremely motivated for the common good of the company.

MONEY · 25

Thomas, together with his partner Frankie Spiteri, is the founder and director of Casa Boutiques Ltd, a hotel management company, focused on the launch and operation of local boutique hotels.

A N A LYS I S

A VERY OFFERING Property manager Thomas Cremona analyses the growth of the boutique hotel concept in Malta, and explains the challenges that smaller properties face.

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Malta’s continued growth in tourist arrivals has led to an increase in the supply of beds through the expansion of mainstream hotels, as well as in boutique accommodation. Boutique accommodation is often defined as a chic hotel or guesthouse that hosts fewer than 100 rooms in an urban environment.

The majority of the Maltese boutique accommodation that launched in the last few years comprises approximately 20 rooms. In addition, boutique accommodation often has a stand-alone brand, defined by its particular design and characteristics.

A N A LYS I S

Development A boutique hotel, especially one located in a city centre, contributes to the gentrification of the area, such that with the investment undertaken by the entrepreneur and the increased activity by the comings and goings of the guests, there will be an increase in the utilisation of the local cafés, supermarkets, and a general focus on the upkeep of the area surrounding the property.

In November 2017, the Times of Malta reported that 98 applications had been filed with the Planning Authority for boutique hotels. A number of hotel developers are particularly encouraged by the Planning Authority allowing for increased hotel height in comparison to a residential development. Through such a regulation, a hotelier is able to increase the number of rooms available or increase the

Today, guests are looking for moments and characteristics that can be easily conveyed onto their social media accounts, and the accommodation provider should acknowledge that every guest has the potential to become a brand ambassador.

facilities on offer, thus assisting with the boutique hotel’s financial feasibility.

Benefits

when assessing the property’s target market. For example, such a property may not be ideal for those travelling as a large group or seeking resort style facilities.

Further benefits to developing a boutique hotel are the reduced VAT rate, and frequent initiatives by Malta Enterprise to assist with sector-specific initiatives, such as the “Refurbishment of Hotels, Accommodation Facilities and Restaurants”, “Energy Efficiency Measures for the Hospitality Sector” and the current “Catering Capacity Building”.

Unique boutique hotel challenges

Malta Tourism Authority

The hospitality industry continues to evolve and, at its core, seeks to provide an enjoyable ambiance at a pleasant location to ensure guests experience a restful night in a place outside of their home. Hospitality is a labour-intensive endeavour and ensuring that the boutique accommodation is operated in the most efficient manner can only be undertaken through a detailed understanding of the guest needs and wants – and efficiently catering for their expectations.

From a legal perspective, the Malta Tourism Authority does not, as yet, have a specific definition for a boutique hotel. To date, they may be categorised with the MTA as a hostel, guesthouse, or other star ratings.

For example, although there has been mention of a six-star and seven-star hotel being launched in Malta, from a regulatory perspective there is no such designation.

Guest category

Third party management

Boutique hotels cater to the current travel trends offering guests an experience that is unique and individualised. A personalised service is often provided through the hands-on front desk who, by managing a smaller scale property, is able to assist in greater detail with the guests’ ongoing needs.

Today, guests are looking for moments and characteristics that can be easily conveyed onto their social media accounts, and the accommodation provider should acknowledge that every guest has the potential to become a brand ambassador for the property and the experience offered by that location. This is in addition to the continued feedback provided in the form of reviews on online booking platforms.

Furthermore, the size of the boutique hotel must also be factored into consideration

T H E R E A L E S TAT E E D I T I O N

Boutique accommodation presents unique challenges, being that such establishments are often unable to achieve the economies of scale to hire a top-rated general manager, and if they do, the general manager will not find the resources available in a larger-sized hotel.

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Through careful market analysis on the boutique hotel’s competitive set, the property will be able to assess its unique selling points and develop its branding on such a basis, and thus optimise its earning potential.

A number of property owners have decided to rent their property to third parties where the operator is responsible to develop the brand and operate as they see fit. A more popular option, that allows the owner to retain a certain level of control and input, is to hire a third-party management company to run the property’s operations, such as budgeting, marketing, personnel, cleaning, laundry, guest relations, and a host of other issues. The nature of the management agreement delves into allowing the owner and the management team to form a mutually-beneficial working relationship.

MONEY · 27

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PROMO

KICK STARTING GREEN TRANSPORT PROJECTS A national green transport fund has been set up by the planning authority for the purpose of supporting capital projects that will improve the land transportation situation in Malta and Gozo.

The monies for this fund will be generated from part of the revised fees that developers have to pay should they not provide car park facilities within their development.

The new revised rates will better reflect the market value of garage spaces and will be homogenous for all localities. A three-tier rate system is being introduced whereby if an on-site car space is not provided by the developer a contribution of €2,500 must be paid. If three to nine on-site car spaces are not provided, then the developer must contribute €6,000 per car space. If 10 or more on-sight car spaces are not provided, then a contribution of €10,000 per car space will be imposed.

The old contribution system, whose fees were established in the 1990s, used a model which differentiated between those localities which were part of the Commuters Parking Provisions System

(CPPS) and those that were part of the Urban Improvement Fund (UIF) system.

A developer who did not provide on-site parking within a CPPS area, except for Mosta and St Paul’s Bay, had to contribute €2,096.43 per car space. If in Mosta or St Paul’s Bay the contribution had to be of €1,863.49 and €1,164.68 respectively.

Within those localities which were part of the UIF system, a developer was requested to pay €1,164.68 per car space.

So as not to adversely affect small businesses, the authority did not drastically raise the fees where there is a shortfall of up to two cars. The contribution is significantly steeper for larger developments and should act as a deterrent for developers that opt out of providing on-site parking.

While 70% of the generated fees will still be directed towards the locality-based Development Planning Fund, the remaining 30% will be directed towards green

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transport proposals called the Island-wide Green Transport Fund (IGTF).

The Green Transport Fund will be open to all (including ministries, departments, local councils, NGOs, private sector and private individuals) on a competitive basis with the Planning Authority then selecting the best projects for funding. Proposals would need to tangibly show a reduction in traffic and parking related impacts.

The authority is also introducing for the first time a mechanism which will allow applicants to request a refund from the on-street parking contribution they would have paid. The request can only be made under two circumstances: when an applicant with a valid development permit signs a declaration that he/she will not be ‘using’ the planning permission; or where the applicant, through a new valid permit, provides additional parking spaces on site.

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MONEY · 29

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Manuel worked for several years in Maltese politics including as press secretary to then prime minister Eddie Fenech Adami and chief of staff for senior government ministers in PN administrations.

OPINION

Manuel Delia laments that the take-up of properties by passport-buyers who don’t intend to live here is squeezing out the Maltese looking for their own homes.

Not much information is provided by the government on the sale of citizenship. But in an interview with an industry magazine recently they did say sales are on the increase and now they’re handling an average of 20 applications a week.

That’s 1,000 more passports a year, a sales rate which is double that of 2017, by any measure an exponential growth.

The interviewee, Roderick Cutajar, who heads the citizenship program, said most of the new applicants chose to purchase property in Malta rather than rent it.

And 100 applications approved in 2018 yielded €16 million of what Mr Cutajar called “investment”, by which he means contracted expenditure in purchasing property.

Traditionally foreigners buying property here were not deemed investors as such. The purchase of property as an economic activity does not create jobs or a sustainable turnover beyond the construction, finishing and furnishing of the

location. That is obviously good money but, like mining, once you extract the value from a property, that’s it, you’ll need to move to the next plot.

Mr Cutajar does not give a statistical split of purchased property compared with leased but he does say it’s a considerable majority, so let’s work it out using the 80-20 rule: €16 million for 80 properties means the properties purchased by these high net worth ‘investors’ cost an average of €200,000 each.

We know what €200,000 buys you these days in Malta. If Mr Cutajar’s figures are to be believed — and who’s better placed to know? — the citizenship scheme is not creating a demand boom in the higher end of property development. Rather it is eating into the sort of value local first time buyers are more likely to be interested in.

passports to people who have lived here for at least a year.

This rule was not there in the first law setting up the passport sales scheme in 2013. It was introduced after the Commission had to respond to European Parliament complaints that Malta was selling European citizenship to people who had nothing to do with it.

Now the Commission is recognising, and loudly complaining, that the residency rule is largely ignored by Malta.

It is therefore reasonable to conclude that even for the European Commission it is blindingly obvious that the ‘investors’ buying €200,000 apartments (some eight apartments a week) are not actually living in them.

Let’s sum that up, shall we?

A recent visit to Malta by the EU Justice Commissioner Věra Jourová reminded us of the EU Commission’s concern that Malta is not fulfilling its promise to only give

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Eight apartments in the first time buyer’s bracket are sold to people that are not going to live in them. And that rate can

MONEY · 31

OPINION

That’s eight apartments every week added to the infrastructural and construction pressure on the country and eight fewer apartments in the supply range for first time buyers. only be expected to grow. That’s eight apartments every week added to the infrastructural and construction pressure on the country and eight fewer apartments in the supply range for first time buyers ensuring prices are kept high not through the lack of physical supply but the lack of available keys to doors that are permanently shut.

it away, are ignoring the already palpable consequences that will only get worse.

Property developers have orders lined up to deliver eight apartments a week at the low end of the market with handsome margins for them and their contractors. Real estate agents work over-time to collect commissions on low effort transactions.

When Malta joined the EU that was one of the few permanent exceptions it negotiated in its terms of membership: purchasing property in Malta by non-residents would continue to be regulated in case it got too much and the behaviour of a very restricted market, a very fragile environment, and a social fabric built around the levelling value of home ownership would start acting up.

But presumably these people are seeing that this can’t possibly last forever, unless we’re considering annexing Libya.

The key word here is sustainability. I am all for economic openness and reducing restrictions to investment and trade.

But there was some wisdom in old age restrictions on the purchase of property by foreigners.

It is now more than acting up.

People who ‘invest’ in Malta with no interest in it are indifferent to overdevelopment. Environmental degradation and social exclusion are not something people who only fly here to sign papers and collect their passport are going to be much bothered with.

It is unrealistic for first time buyers, or even worse middle-aged people in their second marriage, to secure funding to purchase decent housing. The first rung of this ladder is getting higher and higher.

And, sadly, people who are seeing the ongoing boom as a momentary cash cow that they must gobble up before someone realises it is too good to be true and take

The beneficiaries of the construction boom may care little but the reduction in the economic security of the domestic market is a threat to the entire economic fabric here. With more people exposed to the

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insecurity of febrile rent costs, people are less confident making prudent investments and often find themselves with less money than they need to sustain their lifestyle.

A widening gap between property owners and the rest creates economic disparities that quite apart from the unfairness of it all start firming up other very expensive disparities: social dependencies, gaps in the provision of health services, differences and degradations in education for a portion of the community.

Above all the degeneration of our environmental fabric – urban and rural – is a direct threat to the sustainability of other very important economic sectors: tourism, and services that are relocated to Malta not for its passport sales but for the quality of life here. People will not choose to work and live in Malta if it used to be beautiful.

Nostalgia trips don’t pay the bills.

The test of our mettle as prudent and wise guardians of our heritage is now. Are we able to restrain greed and manage the economy of our country to do more than get rich quick?

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Maria is an economist at EY Malta, and part of the Economic Advisory and Climate Change and Sustainability Services team.

ENVIRONMENT

Green Buildings F R O M N I C H E TO M A I N S T R E A M

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ENVIRONMENT

Maria Giulia Pace sympathises with the arguments for and against construction, but argues that the solution does not have to be extreme.

With a booming economy, an ever expanding community of expats and very few alternative financial instruments to invest in, the Maltese real estate market and construction industry continues to thrive. Contrary to expectations, property price hikes over the last decade persisted and the much touted ‘bubble’ is showing no signs of bursting.

buildings qualify as “sustainable”. In Malta, as reported by ‘The Green Building Information Gateway’, there are only seven certified green buildings, indicating a great untapped potential, especially when considering the extensive development planned for the years to come.

Yet this real estate development frenzy has repeatedly stirred up the wrath of residents directed against construction sites, shrinking of open spaces, cranes ruining skylines and the greater pressure put on our already strained infrastructure network. This has served to polarise public opinion, with those in favour of continued development with minimal restrictions pitted against those arguing for full conservation and limited development.

Both positions are unrealistic.

Various elements qualify a structure as ‘green’. Using sustainable materials such as recycled glass, steel or reconstituted stone allows for the creation of a more circular economy, whereby an industry waste is recycled and reused for other purposes.

This effectively extends the economically useful life of material. Renewable raw materials such as rubber could also be used to ensure that the development of new buildings is not depleting finite resources.

Happily, there actually is an intermediate solution which is still in its infancy in Malta. It is the global trending niche of Green Buildings. The US’s Environmental Protection Agency (EPA) defines it as the “practice of creating structures and using processes that are environmentally responsible and resource-efficient throughout a building’s life-cycle”.

Certifications such as BREEAM (Building Research Establishment Environmental Assessment Method) and LEED (Leadership in Energy and Environmental Design) are also available so as to signal to the public and prospective buyers which

What makes a building “green”?

Sustainable designs help to make full use of the surrounding climatic and environmental conditions, such as fitting windows where natural sunlight usage is maximised.

Sustainable technologies such as optimised lighting, proper insulation (to minimise need for cooling/heating), adequate indoor ventilation and air quality, water harvesting measures as well as the use of renewable energy sources (e.g. solar panels and water heaters) further enhance buildings.

The installation of green roofs can help protect ceilings from UV rays, extending the ceiling’s lifetime while cooling the top floors. Plants also help to control water runoff and to filter carbon dioxide.

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Good for the earth and for the coffers What are the advantages of going “green” in our building structures? It is often argued that the initial capital cost of green buildings might be higher than of traditional ones, with developers not being able to “transfer” this difference to buyers through higher prices driven by these green aspects.

In fact, the World Green Building Council (2013) reports that the green cost premium could go up to 4 per cent.

While the obvious benefit is that green buildings help to reduce the negative environmental impacts of construction, there are other benefits that are far more wide-reaching, and which are of benefit to both developers and occupants; and these benefits have a longer-term impact which ends up outweighing the initial cost premium.

Green buildings lead to great savings on operational costs, especially in terms of water and electricity bills. Optimised lighting, the use of renewable energy resources (e.g. solar panels), water harvesting and proper insulation all lead to lower energy consumption.

A study carried out by Capital E (2016) showed that LEED certified schools had “an average energy reduction of 33 per cent compared with conventional design” schools. Sustainable materials are also designed to be more adaptable and hence replacement costs are usually lower.

Moreover, the decreased reliance

MONEY · 35

ENVIRONMENT

I N M A LTA , T H E R E A R E O N LY S E V E N C E RT I F I E D G R E E N B U I L D I N G S , I N D I C AT I N G A G R E AT U N TA P P E D P OT E N T I A L . on power and electricity from the grid line also helps occupants to mitigate supply security risks while also mitigating risks of price fluctuations which might result in unexpected increase in expenses.

These are just financial benefits – what about wider economic benefits?

Sustainable buildings also improve the wellbeing of their occupants. Various studies claim higher productivity of staff working in green buildings. The Global COGfx study found that that occupants of green certified buildings scored 26 per cent higher in terms of cognitive functioning, reported fewer health problems and better sleep. In terms of shopping centres, the report ‘Health, Wellbeing & Productivity in Retail: The Impact of Green Buildings on People and Profit’ by WorldGBC indicated that green buildings can also improve retail metrics such as footfall, dwelling time and in turn sales figures. An experiment has shown that increasing the daylight in a store could lead to up to a 40 per cent increase in sales. Hence the initial investment would eventually pay off in happier and healthier workforces and clients.

This new construction concept will also allow environmental and energy efficiency regulatory requirements to be met. This is imperative as rules and enforcement become stricter and as communities demand higher standards. Additionally, developers and corporations occupying such properties could use the certifications to signal to the public their commitment towards a better environment, a signal

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which is appreciated by both clients and investors. Eventually, a larger number of consumers (especially millennials) will be willing to pay a premium for sustainable brands. In return, this leads to more funding opportunities for sustainable ventures.

All these benefits will increase the asset value of certified buildings – both in terms of sales price and rental rates. The World GBC’s report, ‘Business case for Green Buildings’, states that certified green buildings’ sales price premium rate reaches up to 30 per cent while rental rates reach up to 17.3 per cent. There are various levels of certifications and usually the premiums in price or rent increase in line with such levels of certification awarded.

These “green” premiums are unlikely to be observed in the current local market, possibly indicating a lack of demand for such features, and/or lack of appreciation and awareness.

Conclusion The current lack of awareness means that the local market is losing out on many of the potential benefits which it could be enjoying. It is imperative that green buildings are no longer seen as part of an exclusive niche but rather viewed as the inevitable way forward for our construction industry. By focusing on the long-term cost savings and benefits over and above the initial capital outlay both developers and dwellers will be able to appreciate the superiority of such properties, while simultaneously safeguarding the environment: a win-win for all.

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PROMO

RECRUITMENT

WHO WE ARE M Recruitment employment agency is a recently founded company that supplies various categories of labour. We specialise in catering and restaurant placement services, nursing services, skilled-labour, construction and Information Technology. Our philosophy is to help businesses find the talent they need to drive their success and at the same time place the right professional at the best market conditions.

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CONTACT

We are always looking for brilliant people to help us shape the industry and sector we serve. If you are self-motivated, positive, goal oriented and a team player, we would love to help you achieve your career goals.

M E W A

7788 0202 info@mrecruitment.eu www.mrecruitment.eu No. 6, Triq Il-Kurat Bezzina, Mosta

If you would like to learn more, contact Duncan on 7788 0202, info@mrecruitment.eu, or visit www.mrecruitment.eu.

WHAT OUR CLIENTS SAY “Just like the food and beverage sector, effective recruitment is more art than science. Having the support of human resources professionals such as those at M Recruitment is essential to the success of any quality establishment in high-intensity industries such as ours.”

ALEX INCORVAJA

General Manager, Le Meridien St Julians Hotel & Spa

“In these past two years we have started collaborating with M Recruitment owned

by Duncan Fenech and thanks to his expertise we are finding the right team players for our outlets.”

MARK PACE

Marketing director, Marine Aquatic Ltd (operators of Café del Mar and Malta National Aquarium)

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MONEY · 39

Patrick has worked in the financial sector for ten years. His job as Private Equity Associate includes evaluating new investment opportunities and optimising portfolio performance. Patrick holds a CPA warrant and is a CFA charterholder.

ECONOMY

BUILDING ON SOLID FOUNDATIONS Attempts to define the current property market are all too often not nuanced enough to capture its complexity.

Patrick Debattista breaks the arguments down into their different contexts.

After a period of almost-uninterrupted increases in property price growth, data from the Central Bank of Malta points to a slight slowdown in 2017. But does this represent a turning point in the property market, and if so, should investors be worried?

While we might have reached a new state of “normality” in the market, this is by no means the end of the road for investors and property owners, and there may still be upside to be gained.

Tailwinds: what will keep prices growing?

The current low interest rate environment makes property more attractive as an investment because the return from property rentals and sales is likelier to exceed the “cost of borrowing”, i.e. the loan interest rate.

The European Central Bank has plans to scale back on its “quantitative easing” programme (which involves increasing the supply of money and buying EU

10 8 6 4 2 0 -2 -4

2011

2012

2013

2014

2015

2016

2017

Figure 1 Movements in residential property prices (annual % changes)

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ECONOMY

government bonds, thus increasing liquidity in the financial system). However, interest rate increases seem to be more of a medium-term goal for now, with the inflation outlook looking less than convincing and eurozone growth still tepid.

This should keep it more affordable to buy or invest in property by taking on debt, which in turn should sustain existing levels of demand for real estate.

in theory, this also has an expiry date.

Residential property demand also continues to benefit from favourable labour market dynamics and an increase in foreign workers.

The reason is that a potential slowdown in demand in these areas, say as the result of gaming companies exiting the island, is likely to be mitigated by other sources of demand, such as tourism.

The government’s drive to create and regulate new industries in Malta, particularly in the DLT or blockchain space, seems to be paying off. This move is reminiscent of previous efforts made in the remote gaming sector back in 2004, which have ultimately proven successful. If, as in 2004, the government manages to turn Malta into a European DLT or blockchain centre, this would serve to bring more foreign workers to our shores and, in turn, fuel even greater demand for real estate.

The fiscal incentives currently in place, such as the first and second-home buyer schemes, as well as the Individual Investor Programme (IIP), should continue to contribute to the bullish market conditions.

However, the IIP’s impact has been limited to the high-end segment of the market and,

Of course, when analysing the sources of property demand and potential tailwinds, one must distinguish between “core” parts of the island and “peripheral” ones. For example, the coastal areas such as Sliema and St Julian’s (the core) will be the last parts of the country to be affected by a general decline in price growth, if at all.

Therefore, “core” areas should enjoy a “natural hedge”, protecting them from an economic downturn.

Headwinds: what will hold price growth back?

The large increase in residential permits issued in the last 12 months should alleviate Malta’s supply shortage, as new construction activity counters excess demand for property. Other things being equal, this would bring prices down once all the properties are placed on the market. This will take a number of years to materialise, though. Residential projects often take years to complete, and the industry is currently operating at close to full capacity, meaning that it would take

Residential projects often take years to complete, and the industry is currently operating at close to full capacity, meaning that it would take months, at least, to plan for labour and other resources in a project.

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months, at least, to plan for labour and other resources in a project.

An important trend that could lower demand is that salary growth does not appear to be catching up with rental hikes.

Malta used to be attractive to foreigners because although average salaries were typically lower than the “core EU” countries, this was compensated by a lower cost of living, mainly rent. The narrower the gap becomes between rental costs and salaries, the less likely the country is to attract the employees it needs to keep sustaining rental and property price growth.

Over the years, Malta has managed to attract foreign companies to its shores thanks in part to a favourable corporate tax framework. There has recently been a push by certain EU member states to harmonise corporate tax rates at an EU level. This would be detrimental to our economy as foreign companies who re-located to Malta due to its tax competitiveness would likely return to their home countries, leaving offices vacated. Employees, upon whom we depend to sustain rental occupancy, would follow.

Unfortunately, Brexit has meant that Malta will lose a close ally in its fight against EU tax harmonisation. The key here is for authorities to try and negotiate some special treatment, given that tax is one of only a few areas where Malta could “level the playing field” with its much larger, more-connected continental neighbours.

For example, although Cyprus was made to increase its corporate tax rate to 12.5 per cent following its banking crisis, it still managed to hold it at a rate significantly lower than the 19 per cent European average. Time will tell whether this scenario will materialise, but Malta would do well to start behind-the-scenes preparations for a potential showdown with the EU. Local banks are increasingly exposed to real estate loans (see Figure 2), which means that any weakness in the real estate

MONEY · 41

ECONOMY

sector could spill over into the banking system. However, this risk is mitigated by the small fraction of buy-to-rent loans (as opposed to home-owning), the diversification of credit risk among many small borrowers, and conservative bank lending practices.

redress the equilibrium and ensure we do not become victims of our own success.

The government’s attempts to regulate the rental sector is a good first step, but much more needs to be done to protect the average tenant without disincentivising the property owner.

Also, Figure 3 shows that Malta’s share of households with debt is well below the eurozone average, and the portion of households with negative equity (i.e. property market values lower than the respective loan values) is actually the lowest in the eurozone. This means that

One such initiative would be to introduce a capped deduction for rent paid in tenants’ tax returns. This could achieve as many as four objectives:

government is looking to increase the availability of social housing units to lowincome groups, including by incentivising private investment through tax exemptions.

Conclusion Over the last 10 years, the Maltese property market has out-performed the eurozone average, particularly during the 2012-2014 eurozone financial crisis. One cannot expect this out-performance to last forever, and it appears that the market has now reached a “steady state” of annual capital growth around the 4 per cent mark.

−− it partially protects the tenant from price increases;

80

70

16 Share of household with debt (LHS)

60 60

14

Share of household with negative equity

50

12 10

40

40

8

30

6

20

Figure 2 Exposure to the housing market (% share of total loans to the private sector)

the average Maltese property owner has leeway for protection in the case of a property price decline.

Social impact of the property boom As we focus our efforts on generating economic growth, we often tend to neglect the social impact that increased property prices (and rents) have on home owners or tenants. We sometimes hear about students having to share rooms in sub-standard conditions or working-class families being priced out of their rented properties. More needs to be done to

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Cyprus

Netherlands

Ireland

Finland

Spain

France

Belgium

Portugal

Malta

Slovenia

Poland

Figure 3 Percentage of households with debt and negative equity

−− it does not do so at the detriment of the property owner (which would have a negative effect on prices); −− it could release the most vulnerable members of society from a “poverty trap” by incentivising them to work; and −− it could make the financial difference to those expatriates who find that rental costs are not sufficiently offset by their salary if they moved to or stayed in Malta.

The construction of social housing would also mitigate the impact of rising housing prices on the poor. To its credit, the

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Luxembourg

Total

Estonia

0

Germany

Real estate

2017

Euro area

Construction

2016

Hungary

2015

Latvia

2014

Slovak Rep.

House purchase

2013

Austria

2012

2

0

Italy

0

4

10 Greece

20

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This is a fair return when you compare it to other similar investments in today’s lowyielding environment. However, it remains to be seen whether the headwinds facing the sector will be strong enough to finally do the unthinkable: slow down the pace of demand.

Watch this space…

Sources: Eurostat, Household Finance and Consumption Survey (2016), Central Bank of Malta, European Central Bank International Monetary Fund

PROMO

When is a scan not just a scan? Avantech recently launched their own software product throughout Europe, Africa and the Middle East in partnership with a major technology multinational, allowing them to expand beyond Malta’s shores.

MONEY asks Nick Camilleri, Avantech’s manging director, how they achieved this major milestone.

As to what it does, it simply and easily converts paper documents to digital ones, but that’s just the beginning. Once they are digital we can do almost anything with them.

Ok. But surely document scanning or archiving is not new… What makes Scan2x so special?

What is your software called and what does it do?

It’s funny you should ask that because up until a month ago it was called ScanStation.

But as part of the software’s international launch by Canon we needed to rebrand it to differentiate it from other products and we have just launched it with its new name of Scan2x.

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In short, the fact that everyone can use it... Most systems are designed for experts to use; this is designed like a bank ATM machine, and requires zero training.

However, its capability to analyse and process the documents being scanned rival the best software packages available anywhere.

You don’t have to be a scanning expert because everything is pre-set and all the work happens in the background. In reality it’s less about the features and more the

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ease of use that sets us apart.

So its user friendliness was enough to enable you to sell it to a worldwide brand?

We didn’t sell it; we licensed it. Canon recognised that Scan2x’s ease of use and hidden power would enable them to create major opportunities throughout the EMEA region. It adds a powerful yet affordable product to their portfolio that, when combined with their existing hardware and software products, creates unique propositions for their customers. This was proved by us in Malta with customers both big and small.

Isn’t Avantech a Canon dealer? How did you end up creating software?

Avantech is known as the Canon distributor in Malta, and we have been since 1972.

However, we have also been in the

PROMO

software development business for the past 25 years, mostly creating applications for the financial services industry.

We provided a large document management installation for one of our bigger clients. During the implementation, the client wanted to involve all the staff in the process of scanning as early as possible in the document lifecycle, instead of the more traditional approach of scanning the document at the end of its life for archival purposes only. Unfortunately, this just didn’t work as different people all chose different settings when they were scanning.

We needed an “ATM machine” for scanning, so people could just walk up scan and walk away without being asked what, where and how!

Scan2x can literally scan to almost any destination. From the cloud to your local file servers to a document management system to e-mail or database or webservice or FTP.

to your local file servers to a document management system to e-mail or database or webservice or FTP. As I said, almost anything.

What’s next for Scan2x?

How is it used?

Why Scan2x?

We are working with our technology partners to expand the portfolio of devices that Scan2x will run on. In the near future, it will not only run on your PC, but also on your photocopier, scanner and even your mobile phone to provide users with one consistent look and feel, irrespective of what device they are using. We are also constantly adding new features and functions in response to requests from our customers.

Exactly like a bank ATM. Log in, press one button, walk away, it’s that simple. Scan2x

Simply because Scan2x can literally scan to almost any destination. From the cloud

This feedback has really driven us to make the product as fully featured as it is.

will then analyse the document, recognise what type of document it is, do any type of processing that is required and save it to the appropriate storage location. All these settings are configured by the client’s administrators, who themselves need no prior technical programming knowledge.

Simple to set up, simpler to use.

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MONEY · 45

3 REASONS TO CHOOSE COMPUTIME SOFTWARE Multifaceted in nature, business software projects necessitate a high level of commitment both from the customer and supplier. This is where Computime Software comes into the picture.

Having a positive track record of over 35 years in successful business software implementations and software development projects, our company’s ethos revolves around transparency and quality.

We are completely crystal clear with our clients from day one to project completion, confirming they understand the amount of time, effort and cost required to implement an effective software project.

So why entrust Computime Software with your company’s business solutions? #1 Cutting edge technology We utilise innovative technologies from top suppliers to guarantee maximum use of the various cloud services, browsers, and devices available to everyone in this day and age.

Simultaneously, we provide choices: if a customer prefers to run their solution from a more traditional on-premises server as opposed to a cloud-based solution, then this can also be accomplished.

Offering top-of-the-range software solutions such as Acumatica Cloud ERP and AXON Gaming, our products are

specifically designed to offer a multitude of different features, which include, but are not limited to: −− Financial management and project accounting −− Distribution management −− Manufacturing management −− Field service management −− Customer management −− Mobile commerce platform and merchandising −− Mobile order taking and order management −− AML compliance and transaction monitoring −− Marketing automation and optimisation We strongly believe that most projects should deliver value in stages, and expecting a project to meet all objectives in one single ‘big bang’ is often a recipe for disaster, because this method burdens both our customer and implementation team. Thus, we primarily recommend concentrating on delivering a few incremental, yet gaugeable objectives, while ensuring our customer that these are met, and eventually moving onto subsequent phases, at the customer’s pace. #2 Multidisciplinary team Having an experienced and multidisciplined team of experts is quintessential. Our business and technical experts are there to validate that the solution is built using technology that’s fit for purpose, fully-functional, integrates into environment and, above B u sthe i n e s s customer’s Software & Integration Solutions all, offers an easily-accessible software solution to the non-technical users. Our team of consultants ensure this is achieved by interfacing with the customer’s business users to meet their objectives. Moreover, our project managers oversee the entire process, liaising with our account manager and the customer to keep the project on target.

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PROMO

Expecting a project to meet all objectives in one single ‘big bang’ is often a recipe for disaster. #3 Customer engagement With the hustle and bustle our daily work routine brings, we understand that customers are usually caught up with their everyday tasks and meetings, so planning a project in bite-sized phases is very often a sought-after approach. At inception stage, the customer engagement process begins with an initial requirements gathering meeting, building gradually – one layer at a time.

We have an ongoing objective of delivering the maximum benefit at the minimum risk and cost to the customer. While borrowing from standard methodologies such as PRINCE II and Agile, we try our best to ensure that our primary approach is pragmatic, rather than technical or prescribed and, most importantly, fit for purpose. So, it’s really no wonder that Computime Software enjoys an unswervingly high customer satisfaction rating. Indeed, 96 per cent of our clients claim that we exceed their expectations, while 99 per cent would recommend Computime to their peers.

Business Software & Integration Solutions

If you’re interested in investing in quality software solutions for your company, contact Computime Software today and we’ll be more than happy to help take your business to the next level. (+356) 2149 0700 www.computimesoftware.com info@computimesoftware.com

MONEY · 47

PROMO

Someday… everything will make perfect sense.

The “Someday…everything will make perfect sense” campaign will see Edwards Lowell collaborating with people who have reached the peak of their careers and set a benchmark for future generations. The first is none other than lateral thinker Edward de Bono.

Born on May 19, 1933, there are few people who have lived as many lives as Edward de Bono. Following his completion of a medical degree at the University of Malta, his continued thirst for excellence led him to pursue a Master’s degree in psychology and physiology at the University of Oxford where he also set two canoeing records and was part of the Oxford polo team. He later read for a PhD in medicine at Trinity College in Cambridge

and has written over 50 books, his most acclaimed being the ‘Six Thinking Hats’.

Much like the planet named after him, he carries his own gravity!

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As an internationally recognised symbol of Maltese excellence who has reached iconic status both in his field and off, Edwards Lowell felt a resonance with de Bono’s vision for all encompassing excellence and it is for this reason that he was chosen to

T H E R E A L E S TAT E E D I T I O N

be the first in their series of achievers of excellence.

Having himself coined the widely-used term ‘lateral thinking’ to explain thinking outside of the box, de Bono is nothing if not an innovator. Always striving to refine his thoughts and ideas and present them in a new way, his recent conference at Verdala Palace under the patronage of President of Malta Marie-Louise Coleiro Preca saw

PROMO

de Bono use the palace as the setting for his first ever ‘Palace of New Thinking’ conference.

Believing that new ideas and a fresh approach can better solve conflict, the ‘Palace of New Thinking’ conference is to be held once every year and will focus on discussing creative ideas about different world issues.

The choice of venue was carefully thought through: de Bono pointed out that for people to be able to discuss stubborn issues of international concern, the place must have dignity and importance, and a very clear function. The setting plays a big part in the formulation of a higher and more innovative way of thinking, he believes.

A name synonymous with setting new, high standards both here as well as abroad,

The Campaign

Synonymous with luxury since 1925, Edwards Lowell is launching its new promotional campaign named: “Someday... everything will make perfect sense.”

Featuring local achievers and their creative approaches to their work and unwavering

Edward de Bono has been nominated as one of the 150 people who have contributed the most to the whole history of humanity.

Edwards Lowell have long been pioneers in their own field when it comes to both luxury goods as well as service and, like de Bono who is defined by his work and passion, they have succeeded in constantly coming up with innovative, state-of-theart concepts executed to the highest of standards.

Established in 1925 by Charles E. Lowell, the company has always strived for quality and excellence within the luxury goods field and has not only succeeded in holding onto the sterling reputation that its founding father forged, but it has gone from strength to strength since its conception. Today, the company is still the exclusive Maltese distributor for all the luxury brands it represents, paying great attention to detail and perfecting every facet of the impeccable service it offers.

passion, the campaign’s subjects have all broken the mould in their own respective fields, succeeding both in Malta as well as internationally by building unique as well as thought-provoking legacies. Like Edwards Lowell, these remarkable individuals have set the benchmark for the next generation and without their input, many things we

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Edwards Lowell felt that the “Someday… everything will make perfect sense” slogan would be an ideal title for their campaign to illustrate the importance of patience, resilience and a willingness to grow and achieve. Success like that of de Bono, who has been nominated as one of the 150 people who have contributed the most to the whole history of humanity, is not achieved overnight; however, if one is willing to put time and effort into their work, everything will, naturally, make perfect sense.

all know and enjoy would not be possible.

They are not just leaders, but they are innovators who have gone above and beyond that which is expected of them. In short, they are living legends.

For more info, visit www.elcol.com/someday.

MONEY · 49

I N N OVAT I O N

FINDING THE STRONGEST LINK The Malta Blockchain Summit being held in Malta next November was launched in style, setting the tone for what attendees can expect.

The Malta Blockchain Summit being held in November was given a spectacular official launch over four days, starting on June 15.

The weekend festivities would set the tone for the scale of the show, and lead up to the official launch of the event on Monday 18 June, as no less a figure than the Maltese Prime Minister would go on to give the Malta Blockchain Summit a christening.

The weekend started with a Michelin dinner, where a carefully selected guest list ensured an intimate environment and kicked off the weekend in classic fashion.

A massive pool party was thrown for 400 guests: an all-star cast of Blockchainminded individuals. The ‘Proof of Steak’ pool party provided a very informal networking environment for some of the best and the brightest in the industry and featured all the trappings we’ve come to expect from events of Malta Blockchain Summit calibre – including great food and drink, and an outstanding atmosphere at Hugo’s Infinity.

Saturday saw the merry band of cryptominded sophisticates put away their suits and dresses for more relaxed activities.

On Sunday, it was all about a Crypto Cruise.

An elite and swashbuckling group of sophisticated venture capitalists was taken out on several yachts for a relaxing cruise around the Maltese coastline. On Monday, it was time to get ‘suited and booted’ once more, as the Malta Blockchain Summit was officially launched by Prime Minister Joseph Muscat, a leading architect of the Maltese blockchain scene, in his offices in Castille.

The festivities that surrounded the launch are expected to increase the expectation around the event itself. As things stand, the Malta Blockchain Summit promises to be the hottest ticket around for anyone who’s already in blockchain and DLT, or is looking

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Several blockchain industry elites were flown in for the occasion, including Olaf Carlsson Wee, who’s made himself a fortune many times over on the back of his crypto savvy, and is something of a Silicon Valley celebrity. He would go on to be a mainstay of the launch weekender, lending credence to the lofty ambitions of the organisers of the Malta Blockchain Summit.

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to take the plunge. As Malta positions itself as a primary hub for blockchain and DLT, progress on the legislative front has been exceptionally brisk – and government backing for this emerging tech has also been consistent.

It’s becoming increasingly crucial to lure the best entrepreneurial minds to our burgeoning blockchain Island, as well as developers with the technical chops to sustain future technical innovation. The Malta Blockchain Summit is expected to give the Maltese blockchain and DLT ecosystem roots, as well as the opportunity to come together and talk shop. Its role at

I N N OVAT I O N

TH E M A LTA B LO C KC H AI N S U M M IT IS A L AND M ARK SHOW THAT WILL S H I N E A L I G H T O N M ALTA, A S IT POSITIONS ITSEL F AS A PRIM A RY J UR I SD I CTI O N O N B LO C KC H A IN AND D LT, AND C ONTINU ES TO J UST I FY I TS ‘ B LO C KC H AI N I SL AND’ STATU S. this early stage of the blockchain and DLT revolution cannot be understated.

At this stage, every blockchain-minded company that decides to open shop on our shores gives the Maltese scene crucial additional momentum, as we inch closer to the necessary critical mass required for self-sustaining progress. The importance of attracting the movers and shakers of this emerging tech to Malta, and having them experience the advantages the island offers first hand, simply cannot be understated.

However, the Malta Blockchain Summit will be more than a networking-oriented show-and-tell. The organisers are covering all angles of the Blockchain revolution and are planning some outstanding content for the conferences that are accompanying the expo itself. Furthermore, there will be some friendly competition going on – a buzzing ICO Pitch and a finely-tuned, highlycompetitive hackathon are expected to be among the crown jewels of the show.

The ICO Pitch stands to lure some of the finest blockchain entrepreneurs extant all the way to Malta, and currently stands out as one of the highlights of the inaugural edition of the Malta Blockchain Summit.

It stands as proof of the organisers’ commitment to a truly holistic approach to the emerging tech, as they try to cover all possible angles – starting with the fundamental ones.

The Malta Blockchain Summit hackathon is already looking like the real deal. It has recently received a welcome boon, with Major League Hacking signed on as partners to coordinate the event. Major League Hacking will provide their input on the event, drawing from a wealth of industry experience, having supported numerous hackathons, of varying scale, around the globe. This move is expected to generate a very definite buzz around the Malta Blockchain Summit. Major League Hacking will also provide event

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assistance, consulting, promotional and on-site services – as well as resources for the Malta Blockchain Summit & Hackathon, ensuring that they utilise best practice and provide an exceptional experience for all attendees and staff. This agreement will also see the Malta Blockchain Summit reach a wider audience outside of Europe, parlaying the strength of Major League Hacking in New World markets.

The stage is set. The Malta Blockchain Summit is a landmark show that will shine a light on Malta, as it positions itself as a primary jurisdiction on Blockchain and DLT and continues to justify its ‘Blockchain Island’ status. With a projected crowd of 4,000 delegates, the show’s size is going to be quite significant. Furthermore, the care being shown to this showcase is indicative of a larger commitment on the part of the Malta Blockchain Summit to the ecosystem it depends on, as it addresses one of its most pressing needs – coalescing its key players, present and future, around one outstanding and definitive event.

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C O U N T RY R E P O R T

Rome

WHEN IN

The spectre of a snap election melted away as quickly as a Neopolitan icecream in August a few weeks ago. But will doing away with the uncertainty mean that the problems are over for Italy? MONEY analyses the situation.

It took three months and more twists than a column in St Peter’s, but eventually a low-profile law professor has been made Italy’s prime minister, putting an end to the uncertainty that had roiled eurozone financial markets since the inconclusive March election.

Bickering parties, divergent opinions, a populist mandate. No pressure on Giuseppe Conte then…

What he needs to do is nothing short of a miracle: to bring all Italy’s systems up to scratch (and uniformly from north to south): political, economic, industrial and social.

This means not only that they actually have to work with relative efficiency and transparency, but they must also do so free of links to organised crime and corruption.

President Sergio Mattarella did try to keep out the populist parties that won the majority of votes, wary of what they would decide to do with regards to not only use of the euro but to membership of the European Union (of which it was a founding member). He could not hold back the tide, however.

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John Lloyd, who co-founded the Reuters Institute for the Study of Journalism at the University of Oxford, summarised the failures of various legislatures quite succinctly on Reuters: “The politicians’ failure to allow necessary reforms has meant, over the past quarter of a century, the demagogic and aimless premierships of Silvio Berlusconi, the floundering of centreleft governments, reformist but continually undercut from within their own ranks, and technocratic governments with no popular base and thus limited leverage.”

Businesses, banks and the financial and industrial establishment greatly fear any government not committed to what they see as Italy’s destiny within the EU, of which it was a founder member. Ignazio Visco, the governor of the Banca d’Italia, issued a rare warning in June that Italy risks the loss of “the irreplaceable asset of trust”.

Why would it matter to the EU how Italy fares, let alone to the rest of the world? For a start, Italy is the third-largest economy in the eurozone, and the world’s ninth.

To understand the impact of failure, you first need to understand how the

C O U N T RY R E P O R T

economy is working (or not, depending on how you look at it). The previous centreleft government had actually rolled up its sleeves and made a start, with some reforms (labour, political and judicial), some tough decisions, and some ideas as to the way ahead. Alas, the voice of the people was raised, fed up of reforms, of austerity, of what is seen as an overwhelming influx of migrants to be housed, fed and cared for.

The country has a huge public debt - €2.4 trillion or 132 per cent of GDP - but that is mostly the accumulated baggage of the past as it is now largely living within its means with a budget deficit below the EU target of three per cent, having exited the EU’s Excessive Deficit Procedure in 2012.

Its banks reflected this national position, with crippling levels of non-performing loans, but which are on a day-to-day basis doing fairly well.

Italian voters want to have it all. They want to cut taxes, which would raise the debt even further and make it even harder for the EU to turn a blind eye for much longer.

That would be bad enough but the coalition also wants to spend more – almost 7 per cent of GDP - which would, of course, make the debt even worse. And how would they pay for it? With ‘special new debt’, which sounds suspiciously like ‘old debt repackaged’. Oh, and by ‘writing off old loans’, which is suspiciously like… well, ‘writing off old loans’.

That has really gone down well with the entities that were owed money: is Italy going to refuse to pay its debts? No wonder the markets got jittery: at one stage Italy was paying twice as much interest as it was just a few weeks earlier, and that was already high. At one point, it was paying seven times as much as Germany for 10year bonds.

The economy is, however, hampered by the double-whammy of high unemployment and low productivity. And all those tax cuts

and higher spending would do very little to boost productivity, or to even out income inequality.

the south, resulting in a very unequal distribution of the country’s wealth across the two ends of the country.

What could the EU do about it? The European Commission could reprimand it and issue fines, but the Italians already know that, and have not exactly been quaking at the prospect. The European Central Bank could restrict access to euros for Italian banks if it decided that the sovereign dent they held might turn into dust, exacerbated by the possibility that Italy's credit rating would drop below investment grade, making interest rates even higher. This is bad news for banks: 60 per cent of the Treasury debt is held locally, and three-quarters of it by banks.

So how has the country fared through the post-election period? Economic growth was broadly unchanged in the first quarter, supported by strong growth in inventories and a rebound in private consumption.

Consumer prices rose 0.4% on a monthly basis in May, up from a 0.1% increase in April.

This is why the whispers started: is Italy the new Greece?

Reuters put it into context just before the new government was formed: Italy’s economy is 10 times that of Greece, and its current debt is almost as much as the national annual income of France.

“In other words, Italy is ‘too big to fail’ – the eurozone simply cannot afford to bail out its third-biggest member,” it explained.

The consumer confidence index released by the National Institute of Statistics fell to 113.7 points in May from a revised 116.9 points in April. The business confidence indicator, in the meantime, declined to 104.7 points in May, below April’s revised 105.0 points.

Oh, for a crystal ball! The knee-jerk reaction to a migrant ship being refused entry to Italian ports in mid-June merely served to show that populist rhetoric might work well with an election crowd but that real life has consequences.

Economies are slow and heavy, but there are time-tested rules – and no quick fixes.

Italy’s new government should ignore this at its peril.

What about the other economic performance indicators? FocusEconomics panelists project a reasonable growth of 1.4% in 2018, and of 1.3% in 2019.

The services sector accounts for almost 75 per cent of total GDP and employs around two thirds of the country’s workforce. The remainder is taken up by industry, mostly by manufacturing at the higher-end of the value-added scale, and most of it in the north.

The country ran a trade deficit from 2002 to 2011, but thanks to a surge in exports it now has a fairly healthy surplus.

Agriculture is no longer as important and only employs around 4% of the workforce, but this is largely skewed towards

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MONEY · 53

Michael graduated in design from Kingston University in London. He leads Miko, a spatial and interior design company, and loves marrying form and function to create lasting beauty and value.

OFFICE DESIGN

A BIT OF PLANNING PAYS OFF HANDSOMELY Michael Azzopardi has already shared some of his insight into what makes a design truly special. In this issue of MONEY, he puts the focus on office design.

Good design is important everywhere.

It transcends taste and decoration, the result of a harmonious marriage between function and beauty. We briefly dealt with this in a past article, but today I’m going to zoom in on one of the tasks we face most frequently: the design of office spaces.

Office spaces might seem like an easy enough task if you look at them superficially. However, there are a lot of nuances you have to look into to ensure that the space is not only pretty to look at but one that can fulfil the essential function of being a working space that most people will spend countless hours in.

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Let’s start with a look at the primary considerations to tackle before approaching any office space project: The nature of work · This is probably the most important first step, which is why we always start with it. Different tasks require different setups; sometimes different teams within the same organisation need varied layouts. We do our best to understand how the office space will be used by every person who will interact with it.

Employees · The most crucial aspect in any office design is the wellbeing and comfort of your employees. At the end of the day (or

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even as early as breakfast time!), most of our capital lies in the people who work with – and for – us. This means that they should always be at the very heart of what we do, of any decision we take, and therefore, of any space we’re designing.

A good office can help you recruit and keep talent; a shabby one which is far too packed will be the reason you lose talented people who would otherwise be happy in the environment.

Clients/stakeholders · If clients come over to your business, the first thing that will help them form an opinion of your organisation is the office space they walk into. You need to be very careful to project the right message when they approach your business the first time. This does not necessarily mean it has to look like you have spent loads of money on it, but it has to match your brand to a tee. If you claim that you promote collaboration, for example, but have an office full of singleperson cubicles, then you might actually be damaging your message.

OFFICE DESIGN

I also mentioned stakeholders because sometimes offices never actually host clients – this does not mean you should not care. If a potential partner walks into your office and finds it does not match your brand, they’ll still be put off.

Budgets · We find that well-established budgets help everyone with expectations.

We don’t always get massive budgets to work with, but that does not hold us back. The most important thing here is that expectations are set out from the very beginning. This helps everyone in the process move in the same direction without nasty surprises later on.

Once you’ve established and documented the above you need to move into planning and design phases. This is roughly how we would recommend the way in which the process should move. It might not necessarily be the only good way, but we find that it works for us every time.

Requirements · Your first step in planning out your next office is to list your requirements. How many desks will you need, how much light does every department need? Will natural light be a benefit for all of them, or will some areas need to be darker?

We then ask loads of questions to understand the exact use of the space.

You should start by asking these (and other questions) too. How will the teams work? Is this the kind of office in which it’s important for people to be as undisturbed as possible, or is this a space where most tasks are done collaboratively? Will certain teams be moving in and out of the office more frequently than others? Will it be good to have chilled-out spaces for people to work away from their desks, or would this be disruptive?

Zoning · Next make sure that you’re splitting the space you have into logical units that allow you to have enough space for all the areas you need. It’s no use

dreaming of large game rooms if it will leave you with restricted desk space. When thinking of zoning, also make sure you consider the flow between the spaces. You can’t, for example, have a bunch of desks trapped between two areas that are nonworking spaces (like your canteen and your chill-out area).

Story · Once you have the zones set up in a practical manner, move onto the story that you need to tell. This is where you look into your brand values to make sure your design is going to express you in a way that’s unequivocal. The office must represent your brand, both functionally and aesthetically.

Design · After all the hard work it’s time for the fun stuff. We’ll work on moodboards that match the three steps before this, present them to clients and then move onto the next stage. Once we are sure what we need, we know what it needs to look like, we know the budgets, we know how we’re going to use each and every space, and what story we want to tell, we get to work designing the best space possible for the brand. Time to get cracking…

Decoration · This phase determines the way the office will look. It is a delicate

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If clients come over to your business, the first thing that will help them form an opinion of your organisation is the office space they walk into. balancing act that ensures that all the above considerations are met within a space that looks beautiful. Decorative considerations are done in a way that embraces the nature of a working environment that is ultimately a living space: we spend most of our working hours within the confines of an office so the lines between a working space and living space are necessarily blurred.

You might think that this is an oversimplification of a very complicated process, but it’s actually a very strong model that helps us avoid pitfalls that could turn out to be very costly. Fixing errors that could have been prevented by planning well is always an incredible waste of money.

It’s cheaper in the long run to have the job done well the first time around.

MONEY · 55

Richard is the CEO of Switch – Digital & Brand, a marketing agency that forms part of ICOM, the world's largest network of independent agencies.

MARKETING

HARNESSING THE POWER OF KNOWLEDGE Marketing campaigns do not only need to be effective, they also need to be profitable. Richard Muscat Azzopardi has insider tips on how to make sure.

The vast majority of real estate agencies in Malta are running digital marketing campaigns. Those that aren’t are pretty few and far between. But even among those that do run digital marketing campaigns to grow their deal-flow or recruit new agents, the majority might as well be throwing their money away.

You could be spending several hundred to thousand euros every month across channels like Facebook, Google, and maybe even print and radio. Some months you see a bump in deal-flow and in others everything remains stagnant.

The true power of digital marketing is the ability to test different campaigns, convert leads into customers, track those conversions, and scale a working formula.

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This is the foundation of a profitable marketing campaign.

Any real estate agency not already doing this won’t be able to tell if they’re actually running a profitable campaign. This probably encompasses the majority of estate agencies, as proper digital marketing is still somewhat of a mystery for most.

So, let’s change that. Here is a how-toguide on setting up a proper foundation for tracking, converting, testing and scaling your marketing machine: 1. Determine your main goals at a granular level. Do you want users to fill out a property inquiry on your website? Or do you prefer that they call your office?

Once you understand the exact goals for

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MARKETING

your website visitors will be confused and leave. Another possible issue can be that your offering simply isn’t compelling enough.

If users are visiting your website and not taking your desired actions, your website must be distracting. your campaign, you can start tracking how often users convert into taking these actions.

at the ad set level. Audiences can be set using demographics, e-mails, or remarketing to previous website visitors.

2. To properly track these actions, you will need to set up analytics software on your website. We always go with Google Analytics and the Facebook Pixel. These tools can track much more than traffic volume on your site.

They can track traffic sources and conversion events. Both Facebook Pixel and Google Analytics can help you track conversions. The easiest way to track a conversion is to redirect form submission to thank you pages, then track the traffic and traffic sources related to those pages.

5. Design your creatives. This is done at the ad level. As you get started designing your creatives, start testing out different headlines and descriptions.

Certain phrases in your copy have the potential to encourage users to take action on your site. Test different copy and visuals to determine which messages are the most effective.

3. Choose your campaign goal. Your campaign should consist of one and only one goal. Is it filling out a contact form or calling the office? Other examples include reading a blog post, registering for an event, or applying for a job on your website. You can run multiple campaigns to test different goals as needed.

a) Are people clicking on your ad? If your click-through-rate is low (<3%) and your cost-per-click is expensive (>€0.70), your ads are simply not compelling enough to your target audience. To fix this, you can test different audiences or revise your creatives and messaging completely.

4. Determine your target audiences.

Whether you’re building out your campaigns on Google or Facebook, you will determine your target audiences

6. Track the results of your campaign. You should be looking at all sorts of metrics to track the effectiveness of your campaign.

b) Are people leaving your website as soon as they land? If so, this is indicative that your website is not consistent with your ad. If the ad and website look and feel completely different from one another,

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c) Are people not actually taking your desired actions? If users are visiting your website and not taking your desired actions, your website must be distracting. If your goal is to collect leads for rentals, then the landing page you direct your visitors to should not include any other information other than that for rentals. Far too often, campaigns lead users to the homepage of the website which directs users to the fullscope of services offered by an agency.

With too many choices to make, the end result is inevitable: no actions are made.

7. Calculate your cost-per-acquisition.

If you have set up tracking properly, Google and Facebook should be able to calculate your actual cost-peracquisition. This refers to the cost of getting a user to take a specific action on your website, such as filling out an inquiry form and becoming a lead. But this can also be done with basic math: a) Let’s say you’re spending €0.30 per click.

For every 300 clicks, you generate one lead. Now you’re paying €9 per lead. For every 10 leads you generate one rental transaction. Now you’re paying €90 per rental transaction.

8. Once you identify an audience and creative combination that drives a desirable cost-per-acquisition, you can start steadily increasing your advertising spends to generate as many leads and sales as possible.

Any and every real estate agency leveraging digital marketing campaigns as a channel should be measuring their failures and successes using this method. If you have any questions, feel free to reach out to us; we’ll be glad to help you understand this better without any obligations.

MONEY · 57

COOL THINGS

This is it.

MONEY’s coolest pick.

Things El Purista smoker’s armchair You can enjoy a fat cigar any place you sit down in the house.

If you want to savour every moment you huff and puff on that sweet-smelling Cuban, though, might as well look classy and feel comfortable doing it in the El Purista Smoker’s Armchair.

Mobilite chair’s Designed by Tim Defleur and Benjamin Helle, the chair is divided into two main parts: a padded stool and a padded skateboard that can be inserted into a slot on the seat, immediately turning it into a functional backrest.

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COOL THINGS

Vadolibero bike shelf Instead of simply outfitting a standard shelf with an extra bike rack like many designs, the Vadolibero Bike Shelf serves as a one-stop storage solution for all your cycling equipment and gear, making it a genuinely useful addition to any serious cyclist’s home setup.

737 cowling chair As the name implies, this lounge chair is constructed from a Boeing 737’s salvaged engine cowling, which was cleaned up and dressed up to be a fully-functional seating furniture. It’s gorgeous. Not to mention, ostentatious. Learn more about the 737 Cowling Chair from Fallen Furniture.

Wave City Created by Cyprus-based Stelios Mousarris, it’s a coffee table that resembles that memorable scene from Inception, integrating a small section of a city folding over itself. More impressively, though, it does that with a ridiculous amount of detail, using dozens (maybe hundreds) of buildings to create the physics-defying effect.

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MONEY · 59

COOL THINGS

Room in a box Made by Our Paper Life, itâ&#x20AC;&#x2122;s a set of cardboard furniture pieces designed to serve all the basic dorm room needs.

The whole thing comes flat packed inside a single box, too, allowing you to drive up to the dorm with nothing but one package in the boot of your car, simplifying the whole moving-in ordeal.

i

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COOL THINGS

Pikaplant One Described as “a low-maintenance vertical garden,” it waters the plants autonomously, using an ebb-and-flow process that allows it to work without requiring any electricity. All you need to do is fill up the transparent water tank at the top once a month and your garden will handle itself all on its own.

FA S H I O N

Summer Magic It's the beautiful season so it's only fair that MONEY gives beautiful gifts.

B&O PLAY GUCCI

€285

€1,980

Beoplay E8 truly wireless earphones Patent leather-trimmed suede tote bag

SAINT LAURENT

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GUCCI

€345

€320

Square-frame acetate sunglasses

Short-length embroidered jacquard-shell swim shorts

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FA S H I O N

MONCLER

€845 Maribeu printed shell hooded jacket OFFICINE GENERALE

€395 Slim-fit unstructured stretch-cotton seersucker blazer

ADIDAS ORIGINALS

€100 Forest hills leather and mesh sneakers

ENLIST

€165

PRADA

€690

PRADA

€670

Camp-collar printed voile shirt Spazzolato leather loafers

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Available from mrporter.com

Stretch-cotton chino shorts

MONEY · 63

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

LAST WORD

Striking the Wrong Chord So what happened? The euphoria of the Baby Boomers, the touchy feely-ness of the early to mid ‘60s, the camaraderie, [‘we’ll sink or swim together’ beer-soused buddies would sing, shoulder to shoulder] ushering in the Peace and Love generation as the world, it seemed certain, was going to enter the niceness to end all niceness.

But the Summer of Love turned into the Winter of our Discontent. The Woodstock Music & Art Fair was billed as An Aquarian Exposition: 3 Days of Peace & Music to take place in upstate New York.

Unfortunately the festival was banned by the local authorities and permits were not issued.

Two Manhattan entrepreneurs, Joel Rosenman, and John P. Roberts – cocreator and money man respectively – were hoping to open a ‘studio in the wood’, in Woodstock with the proceeds, at the behest of Michael Lang and Artie Kornfeld – co-creator and music director respectively – and this was an obvious and potential game-ending hitch.

included the Star Spangled Banner solo in a medley.

The expected 200,000 attendees swelled to between 400,000 and 500,000 blocking the roads for eight miles around and severely straining the toilet facilities, but there was no violence to speak of and the two deaths were accidental. One punter ODed and the other, a poor fellow who chose to huddle in his sleeping bag under a tractor, was run over.

Births were variously reported as one, two or three. It was a great coming together and validation of the culture of the times. Late night talk shows couldn’t get enough.

But by the end of the year a cold shower fell over that warm cosy glow.

Rather than cancel, Rosenman and Roberts took to the road looking for an alternative location and thanks to an enthusiastic town manager the venue was changed to a suburb of Bethel, NY, about 50 miles south west of Woodstock on Max Yasgur’s dairy farm for August 15 - 17, 1969 . Because of a storm delay, it wound up running over into the 18th, ending with Jimi Hendrix beginning a 2-hour set at 9am, the set that

The Rolling Stones were coming off a US Tour and Mick Jagger, a little desperate to shine in something big and splashy I suspect, thought that it might be a good idea to set up a free concert that could replicate Woodstock on the West Coast.

Earlier that year Brian Jones had been found drowned in his pool and, a few months prior, in December of 1968 their filmed-for-tv concert, The Rolling Stones Rock and Roll Circus, was yanked by Jagger himself when he decided that the Stones’ performance was lacklustre; not hard to understand when you consider the rest of the bill consisted of acts including The Who, Jethro Tull, Taj Mahal and a band including John Lennon and Eric Clapton.

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The Bluesman ponders the optimism that started with Woodstock and how it led to the political apathy of the present legislation.

Unfortunately, unlike Woodstock, well planned and well financed months in advance, this event was sloppily thrown together [snide aside, heads up!] and one might not be too far off likening it to the Stones’ stage performances. The venue wasn’t even certain for the December 6 date until the 4th when the organisers locked in the Altamont Speedway for the location. Not a romantic spot even though it was out in the hills about 55 miles east of San Francisco. Several dozen San Francisco Chapter Hells Angels were brought in to … well, it gets a little muggy here, there was an assumption that they were brought in as security but a spokesman for the Angels said that they weren’t there to police anybody [“we just want to enjoy the concert”] and the organisers said that they were there to watch over the generators and keep the audience from getting onto the stage as there was no barrier. Their ‘compensation’ was to be $500 worth of beer. So, 300,000 people and beer-tanked bikers: the math is not hard.

A number of San Francisco bands had used the presence of the Angels before in this

LAST WORD

few others that do get through and, by virtue of any good connections they may have, obtain the keys to the kingdom, provide a rearguard action while they work at getting their own piece of the pie once places open up.

sort of arrangement as ‘hovering muscle’ at their shows so it was ironic that during the Jefferson Airplane’s performance, singer Marty Balin was knocked unconscious by one of them during an early melee started when a bike was accidentally, or not, toppled and, upon learning this, the Grateful Dead – themselves proponents of Angel Power – upped and left.

The violence ebbed and flowed and when the Stones came on there were more attempted stage invasions repelled by the bikers, with Jagger looking very much out of place trying to placate the situation.

Despite a cool-down pause in the music, things got uglier, culminating in 18-year-old Meredith Hunter pulling a gun and being stabbed by one of the Hell’s Angels. By the end of the day, the toll included two people killed in a hit-and-run, the inevitable drug-

It was as far away as one can get from the iconic image of hippies placing carnations in soldiers’ gun barrels just two and a half years earlier in October of ’67.

induced death [by drowning in a canal], four births and property damage including stolen vehicles. A far cry from the love fest that was hoped for.

Thus 1970 stumbled in and barely halfway into it certain events led up to the National Guard firing into a student demonstration at Kent State University in Kent, Ohio, killing four and wounding nine.

Tin soldiers and Nixon coming, We're finally on our own. … [Crosby, Stills, Nash and Young].

It was as far away as one can get from the iconic image of hippies placing carnations in soldiers’ gun barrels just two and a half years earlier in October of ’67. Since those halcyon days, Nixon had been elected, his promise to end the Vietnam War morphed into the Cambodian Incursion, military draft regulations were changed broadening the reach and the governor of Ohio got nervous at the demonstrations and called in the National Guard. It all went sour.

And what happened to those cockeyed optimists from those decades ago?

They may well still boozily sing ‘we’ll sink or swim together’ except now it’s you sink, they swim. A little harsh maybe but, as it happens, most of those baby boomers went on to excel in the life they had supposedly dropped out of. They embraced an education, jobs that blossomed into jobs with power, and started consolidating their positions. They crossed the moat and pulled up the drawbridge, effectively locking subsequent generations out. Those

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Author, lawyer and founder of Court TV, Steven Brill, himself a baby boomer, expounds on the broken system and institutions in his book Tailspin: how the brightest stars have been isolated and secured while millions of Americans are trapped in hopelessness. He also highlights those laying the groundwork for change and solutions that will lead the way back to what were once the norms.

Apparently, it does seem to be ‘blame the boomers’ time and while Brill’s book can be considered a journalistic work, a book written by Bruce Cannon Gigney, not a boomer, published in 2015, tends to be a tad vicious and blunt about his dislike for the generation. A venture capitalist and early investor in PayPal he seems to be quite concerned with hiding his age, but he is likely over 40. The title of the book ‘A Generation of Sociopaths: How the Baby Boomers Betrayed America’ certainly makes one wonder if he hates his parents too.

Yes, it’s a pretty scathing condemnation of his elders but he does offer ideas he feels will right the listing ship, such as forgiving student debt and raising taxes on older people. He also feels that younger people need to get involved in getting elected into government positions.

Prophetic coming from around four years ago and tying into my previous column’s conclusion, as youth is once more on the march. New voters this year have been galvanised into action by the astonishing apathy of current politicians in taking concrete steps at stopping school massacres.

As the Who sang: ‘But I know sometimes I must get out in the light’ [The Kids are Alright].

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NEWS

Vivendo Hospitality upgrades guest rooms at The Palazzin Hotel The Palazzin Hotel in St Paul’s Bay closed its doors during the winter months to work on its refurbishment project of 30 rooms located on two floors. They entrusted Vivendo Hospitality to upgrade the rooms with modern guest room furniture including new tables, chairs, sofas and wardrobes.

All the work was done in a 3-month timeframe so the hotel could be up and running during the busy summer season.

The team, led by hospitality specialist Marthese Aquilina, measured all rooms and made up the plans accordingly. Orders were placed late January and delivered mid March. The major challenge was the delivery and installation as it had to be done in exactly one week. Nonetheless, Vivendo lived up to the client’s by delivering top quality products in the requested short timeframe. Every aspect was handled professionally and the client is very satisfied with the outcome.

66 · MONEY

Optimal efficiency An essential part of a KYC and AML compliance solution is transaction monitoring – software designed to oversee customer transactions in real-time or daily, as well as detecting any possible risks hidden in business relationships. The need for a reliable compliance system is becoming more and more urgent to prevent financial crime and fraud from spreading, which means that transaction monitoring is now no longer optional but a necessity. AXON enables you to automate and optimise your regulatory

and compliance functions by tracking and reporting on critical data in realtime. This provides a major benefit in time-saving, versus a manual process where you are limited to performing individual checks on each data source. If you’re interested in learning more about the AXON AML transaction monitoring platform, visit www.computimesoftware. com/axon-gaming or email info@computimesoftware.com.

New additions to the Pendergardens experience Guests gathered at an evening event to celebrate and enjoy the launch of two fabulous outlets recently opened at the retail podium of Pendergardens. This prestigious self-contained development, covering an area of 18,500 m2, has stayed true to its mantra that everything surrounds you, with the opening of these two retailers. The reputable and successful Optika Opticians have opened a flagship store housing all the top brands. And in addition to testing facilities and optometric clinical health services, Optika Opticians outlet will offer a vast range of products, from high-end, premium fashion brands such as Ray-Ban, Cartier, Bulgari, Tiffany & Co and Giorgio Armani, as well as contact lenses and lens care products. U&Co, an easy eatery and social café, spread over two floors and offering both inside and outdoor seating, aims to offer a mindful and memorable experience

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delivering exquisite and beautifully presented food, artisan coffees, craft beers and so much more in an authentic way. It is guaranteed to be a hit with the community which surrounds it.

Both outlets are served by the recently opened Pendergardens Public Car Park, making them very easily accessible throughout the day.

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