Business Observer August 31, 2017

NEWS

Issue 77

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August 31, 2017

Distributed with Times of Malta

Malta will have to work harder than other countries to achieve its EU2020 renewable energy targets, the head of the EWA warns. see page 5 >

ANALYSIS Can Malta compete with bigger and more established financial centres as companies prepare to decamp from London in the wake of Brexit? see page 6 >

DAVID XUEREB

NAZZARENO VASSALLO

ANGELO XUEREB

SANDRO CHETCUTI

Construction industry in Malta facing crisis of labour shortages Sarah Micallef Several building contractors have reported that they were finding it almost impossible to recruit workers, pointing to a significant shortage of workers in construction which is hindering their potential to grow and meet the demands of the industry.

“It is today a fact that engaging a contractor to bid for a project or mobilise resources on a project may take many months,” David Xuereb, CEO of architectural firm QPM Ltd and Deputy President of the Malta Chamber of Commerce, told The Business Observer. “Considerable eco-

“We are frequently in situations where we have to refuse work on account of the shortage of skilled people.” – Nazzareno Vassallo, chairman, Vassallo Group nomic activity exists in all sectors of the industry,” he said, maintaining that the overall positive economic climate has significantly influenced the confidence in the property market and associated service, manufacturing and retail industries, providing much economic activity and em-

ployment opportunities in the construction industry. “These opportunities were not matched with local/national employment resources and the industry has experienced a significant influx of imported labour that in itself requires legislation and regulation,” Perit Xuereb affirmed,

adding that the “shortage of resources – labour, equipment and logistics – to deal with this high demand is a clear fact.”

Vassallo Group Chairman Nazzareno Vassallo lamented the seriousness of the problem. “We are frequently in situations where we have to refuse work on account of the shortage of skilled people. Part of the solution would be to grant contractors a limited number of temporary work permits allowing thirdcountry nationals, who are very often keener to work in this sector, to start work right away. This would provide companies like Continued on page 3

STOCK MARKET REVIEW Why is the Capital Markets Union initiative still so vital to the financial stability of the EU? see pages 20, 21 >

NEWS Smoking marijuana on the job should still be a cause for instant dismissal, even if the drug is legalised, states the Malta Employers’ Association. see page 25 >

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NEWS

“We have no option other than to engage expatriate workers” Continued from page 1 ours with enough time to apply and get a longer work permit for such employees.”

Mr Vassallo said that a shortage of resources within the construction industry was “the other side of the coin”, stating that with such a boom in the construction industry where big infrastructural projects happen, concurrently, finding enough contractors to work on your project is sometimes a challenge.

“Throughout all these years we have built a healthy rapport with many contractors whom we engage on our different projects.

This enables us to work with contractors who by now are fully conversant with what we expect from them. Needless to say however, the shortage of skilled labour on the island affects the entire supply chain from the builders to M&E services contractors and the finishing trades.”

AX Holdings Chairman Angelo Xuereb acknowledged this problem too. “What has happened to other larger, more developed countries in Northern Europe is now happening to us Maltese,” he told this newspaper. “Every Government’s main agenda is to improve the standard of living.

Naturally, our youth are generally better educated and would rather not take up employment at lower grades. We are experiencing this shortage of labour across the board with labourers, cleaners, carers, etc. However, this shortage is not only reserved to manual labour – the current positive economic situation has also reflected in the white-collar grades. This is a serious problem. As has happened in other

countries, we have no option other than to engage expatriate workers.”

Perit Xuereb concurred that while the number of Maltese citizens wishing to consider the industry as a career choice has dwindled, this has been compensated somewhat with an influx of professional, administrative, skilled and unskilled workforce imported from within and outside the EU. “This is not easy, not cheap and certainly does not come without risks,” he warned, stating that the industry has not necessarily prepared itself well for the management of this influx of overseas workers. “Much regulation, education, and certification is needed. The BICC-driven Skill Card system will help towards this but our educational and regulatory institutions have much more to do to keep up with these dynamics and to position the industry as truly safe and rewarding to our youngsters,” he said.

Malta Developers Association President Sandro Chetcuti acknowledged the situation as a problem that sorely needs to be dealt with, maintaining that there are a lot of investors but the workforce simply isn’t large enough to deal with them. “I appeal to Government to tackle the issue long term, as well as encourage youngsters to foster an interest in trades. It is useless to have all this activity without the workforce to back it,” he said, while calling for more regulation on the registration of new developers, who “should have the necessary experience and knowledge.”

On the flipside, Mr Chetcuti continued, there is definitely a boom, which now means that we

have to be careful not to create a bubble. “The more you push down on the gas, the more the chance of crashing, so it’s good to keep our feet on the ground,” he said, stressing the importance of finding a balance, and that it might be time to slow down. “We need less speculation and more projects that are followed through to be used and enjoyed by users. Too much inflation causes more harm than good – we need to invest on the long term,” he concluded.

“I appeal to Government to tackle the issue long term, as well as encourage youngsters to foster an interest in trades.

It is useless to have all this activity without the workforce to back it.” – Sandro Chetcuti, President, Malta Developers Association

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Reaching Malta’s EU2020 targets will require ‘disproportionate’ effort - EWA Manuel Zarb The 2020 energy targets set by the European Union will be harder for Malta to achieve than they will be for other European member states, and will require a ‘disproportionate effort’ from Malta’s end, according to Energy and Water Agency CEO Daniel Azzopardi.

“Malta plans to reach its EU2020 energy target of reaching 10 per cent of energy production from renewable sources. Reaching our target will be quite expensive, and requires a disproportionate effort when compared to other member states that benefit from natural renewable energy resources such as biomass, wind and hydro,” Mr Azzopardi told this newspaper.

“Malta is tapping all feasible renewable energy sources, particularly solar energy and biofuels. In fact, we went beyond the 4.5 per cent interim target for the years 2015-2016, achieving 5 per cent by the end of 2015. But our heavy reliance on photovoltaic solar panels is a challenge. This technology is still relatively expensive, requiring Government support, and it will cost Malta around €250 million to reach our PV target for 2020. Going forward, another major challenge is the ever-increasing energy demand resulting from rapid economic growth.

This could dilute some of the efforts in the renewable sector.”

The strategy’s legally-binding energy targets are meant to achieve 20 per cent renewable energy consumption across the EU. Whilst different renewable targets were assigned to each member state, Mr Azzopardi said, the way they were assigned did not take into account the resources available to each country. This means that disproportionate targets were set for small countries like Malta and Luxembourg, which have limited space for land-intensive

“Disproportionate targets were set for small countries like Malta and Luxembourg, which have limited space for land-intensive energy production, and lack sources such as geothermal energy or extensive forests.” energy production, and lack sources such as geothermal energy or extensive forests. Other large European countries, by contrast, are able to operate largescale solar and wind energy installations with little or no Government support.

Failure to reach the 2020 target could have significant consequences – failing to implement the Directive on Renewable Energy Targets is a breach of EU law, which could lead to infringement proceedings against Malta.

“Should Malta fail to reach its renewable target by 2020, it would be in breach of the relevant Directive, making it subject to possible action by the European Commission,” Mr Azzopardi said.

“However, a country can avail of other options should it foresee a deficit in meeting its target.

These include the use of statistical transfers, a means allowed under the Directive where one member state can buy renewable energy production from another. Luxembourg has already chosen to use this option. Besides, the revised National Renewable Energy Action Plan, which covers the period 2015-2020, provides a clear route for Malta to meet its 2020 target.”

When contacted by this newspaper for comments, the Ministry for Sustainable Development, the Environment and Climate Change commented that Malta needed to focus more on the opportunities that such economic

principles provide rather than fearing any constraints that such a transition could require. “The energy sector is not only the backbone of our society but is also acknowledged as one of the driving forces to reach environmental objectives. This is especially so, now that we are moving towards a resilient and low-carbon economy, driven by renewable rather than fossil fuel resources. Thus whilst the energy sector is poised to continue to foster socio-economic growth locally, it will also be a driver of growth in green jobs across most of our economic sectors.”

Looking ahead, the renewable energy targets for the year 2030 will adopt a bottom-up approach – an improvement on the way the 2020 targets were adopted. This method, agreed upon between heads of state in the European Council, will allow Malta more flexibility in reaching its renewable targets in a cost-effective way while keeping commitments already made by the Prime Minister. “What is clear in the 2030 targets is that each member state will retain a significant degree of flexibility, even during implementation, as long as the concerted effort of the EU reaches the overall goal of at least 27 per cent renewable energy consumption,” Mr Azzopardi said.

“The Energy Ministry and the Energy and Water Agency in cooperation with relevant stake-

DANIEL AZZOPARDI, CEO, ENERGY AND WATER AGENCY. PHOTO: INIGO TAYLOR

holders and Ministries, are developing a holistic national energy and climate plan which takes stock of current energy demand, projects future developments in the energy sector, and proposes cost-effective measures to be implemented over the period 2020-

2030. The plan will take into account Malta’s specificities and come up with tailor-made solutions to support sustainable growth. It will be presented to the Commission in 2018, and will be used to guide Malta to achieve its set 2030 goals.”

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ANALYSIS

What has Malta gained from Brexit so far?

Martina Said While the UK’s departure from the EU is still in the early stages of negotiations, with the aim of being finalised by April 2019, operators in the UK that depend on the ability to passport products and services within the EU are on a deadline to re-locate their business within the stipulated timeframe. “They have started to evaluate their options and give consideration to the model they will adopt to sustain their business,” said FinanceMalta Chairman Kenneth Farrugia. “So far, when one considers the significant number of UK-based financial services operators, very few have formally and publicly expressed where they will domicile their business and in what way this will be organised.”

With regards to financial services operators in the UK, Mr Farrugia said that, in his view, there are three main categories of operators: firms based in the UK that already have an existing operation in the EU; firms solely servicing the UK market that have no need for passporting rights; and firms that are only based in the UK and whose business model revolves around the passporting of products and services within the EU. These will be significantly impacted once the UK exits the European Union.

“Whilst the UK is leaving the EU, it will still remain a significant and

influential financial centre within a wider European context. Nonetheless, it is clearly evident that many UK operators have actively started to evaluate their options,” Mr Farrugia explained, adding that, within this context, Malta has received a good number of enquiries from UK-based operators that expressed interest in setting up a base here, particularly those operating in the area of insurance and asset management. “Malta’s attractiveness is driven by a number of critical factors. In the insurance space, Malta is the only EU Member State which has a legal and regulatory framework in place to enable the setting up of Protected Cell Companies (PCCs). Other factors include the presence of a well-developed financial services ecosystem, the presence of a comprehensive legal and regulatory regime, and the fact that Malta is the only other EU country alongside Ireland which is Englishspeaking, and whose legal and regulatory framework very much mirrors the UK’s, as well as having a business tax-favourable environment.”

Juanita Brockdorff, Partner Tax Services at KPMG Malta asserted that at this juncture in Brexit negotiations, it’s hardly surprising that more questions are being raised than answered. “Brexit has opened a can of worms, and the only constant in this entangled web of divorce proceedings is un-

JUANITA BROCKDORFF, PARTNER TAX SERVICES, KPMG MALTA

FINANCEMALTA CHAIRMAN KENNETH FARRUGIA

certainty. Business is entering a new era. Companies are right to be concerned and would be wise to take the time to assess the developing implications of Brexit.

Adopting a strategic mindset is key to ensure your business adapts to the new landscape postBrexit. Despite the uncertainty and longer-term outlook, businesses need to re-examine their strategies in light of the new reality to avoid being caught unaware or unprepared. The short-term climate has also shifted dramatically, requiring businesses to create and evaluate immediate plans across the board,” she asserted. “KPMG in Malta is working closely with our colleagues and Brexperts in the UK who are assisting businesses to navigate these unchartered waters by offering realistic and sustainable tailored solutions. This partnership perfectly dovetails with our aspiration to be the trusted adviser for our clients, making us well-positioned to explore and exploit opportunities for our clients’

continued growth post-Brexit.”

In recent months, a number of high-profile companies in banking, asset management and insurance have declared their intentions to move their operations from London – currently ranked the number one global financial centre according to The Global Financial Centres Index – to other financial hubs such as Frankfurt and Dublin in Germany and Ireland respectively. How is Malta expected to compete against established cities of this kind?

“If we’re taking a comparative approach, it’s very difficult for Malta to compete with highly established financial centres such as Frankfurt and Dublin, as these jurisdictions have been active in the financial services industry long before Malta entered the fray,” Mr Farrugia said.

“However, Malta has so far managed to attract a notable number of renowned international operators.

This means that despite the size of our country, and that fact that we are sea locked, Malta is managing to attract a fair share of financial

services companies to its shores, and I expect this to increase in the months ahead of us.”

Within the context of these developments, over the course of last year and this year, FinanceMalta organised various initiatives in London aimed at UK-based financial services operators, as well as operators based outside the EU that were considering setting up their European business base in the UK, and that are now compelled to conside other EU jurisdictions. “The aim of these initiatives, that covered the business areas of private wealth, asset management and insurance, was to provide information on these fast growing sectors and the various options that UK operators might consider in terms of the model to adopt when they come to decide on the best way forward for their company,” Mr Farrugia explained. “A number of initiatives are already scheduled to be held in London over the coming four months along with various other initiatives that are being planned to be held over the course of 2018.”

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CASE STUDY

e Shoreline looks ahead after selling all its first phase properties The first phase of The Shoreline’s properties have all been sold, as per the set sales schedule, according to Ricasoli Properties Limited, the privately-funded company which is developing the €200 million landmark project in Smart City. “Ricasoli Properties Ltd is satisfied that, as per our schedule of sales, The Shoreline’s phase one is already sold,” the company stated to The Business Observer.

The Shoreline will comprise “sophisticated living” with more than 420 residences, enjoying “spectacular views, landscaped open spaces, and an assortment of community amenities. Property at SmartCity is in an area of great potential enjoying a Specially Designated Area Status (SDA),” said Ben

“Property at SmartCity is in an area of great potential enjoying a Specially Designated Area Status (SDA), allowing both EU and non-EU nationals to purchase property at e Shoreline with the same acquisition rights as Maltese citizens.”

Muscat and Steve Carter, the Chairman and Managing Director of Ricasoli Properties Ltd respectively. “This status allows both EU and non-EU nationals to purchase property at

The Shoreline with the same acquisition rights as Maltese citizens, and without the need to obtain an Acquisition of Immovable Property (AIP) permit. This has been duly

noted by foreign investors. In our case, there are no limits on the amount of properties a buyer can purchase and, once acquired, the owner can also lease the property. More and more individuals are realising the value and potential of the property, and every day, we receive further enquiries as property investors have adopted the principle of ‘buy great property, and wait’.”

“Such properties can also result in great re-sale value. For our clients’ convenience, The Shoreline will have an underground car park, and a shopping mall with over 30 outlets,” Mr Carter said. “Should one decide to buy to let, The Shoreline is a most prestigious location close to the Malta International Airport, the Malta Freeport, Valletta,

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the Three Cities, and the American University of Malta. It will increasingly develop into a modern, distinctly cosmopolitan and Mediterranean urban community that is so much appreciated by foreigners working for the longer term in Malta. Recent research has shown that 90 per cent of foreigners find it easy to settle down in Malta, as opposed to the global average of 59 per cent.”

Mr Muscat and Mr Carter said that The Shoreline will offer its owners a unique and exciting experience of contemporary living in a new environment in Malta, “breaking the mould for bespoke living in the south of Malta. These residences propose an important and essential residential component to the current office and catering developments. With other projects coming up in SmartCity, investors prefer to buy on plan now as they are buying tomorrow’s property at today’s prices. While Ricasoli Properties Ltd is doing its part in terms of offering comfortable payment plans, investors know that these apartments will benefit from strong capital appreciation. For these and other reasons, The Shoreline is considered as the best property investment in the southern region of the island.”

The architectural challenge of making The Shoreline project come to life was entrusted to EM Architects & Civil Engineers, led by architect Perit Edwin Mintoff. “Ricasoli Properties Ltd believes that EM has managed to achieve an exciting balance by creating a building that has a large frontage facing the sea, having large terraces on all levels including penthouse and upper and lower levels, and a vast residential garden

that accommodates a health club, and a large swimming pool,” Mr Muscat and Mr Carter stated. “The bottom part of the podium opens onto a series of public spaces that surround the SmartCity Laguna, and shall accommodate the top floor of the retail shopping mall, thus ensuring an active frontage onto the Laguna.”

Meanwhile, Carter Architectural Studio (CAS) have been appointed as the interior architects. Led by Perit Claire Carter, they

will be contributing their “avant-garde vision to create interiors that respect the contemporary aspirations of owners and future tenants, by crafting a new style approach that embraces the project’s surroundings externally and embodies a sleek and modernist outlook internally.”

“The level of finishing specifications is surely the highest ever in any major project in Malta, and includes intelligent lighting, underfloor heating in main en suites, eco-

friendly air-conditioning systems and top quality doors, flooring and bathrooms,” Mr Carter said.

The corporate identity of The Shoreline is inspired by the calm waves of the sea that will cradle its doorstep, while reflecting the values and visions of Ricasoli Properties Ltd. In this new city environment, owners and tenants can enjoy the convergence of three elements that define the development: live, work, and play.

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e Business Observer is Malta’s leading business newspaper distributed with Times of Malta every month.

Editorial Coordinator Marie-Claire Grima

EDITORIAL

e end of diesel cars?

Let’s start off with some hair-raising figures. No fewer than 92 per cent of the world’s population lives in places where air pollution levels exceed the limits recommended by the World Health Organisation, according to a study carried out by the same organisation in 2016 – an alarming figure by any metric. That includes Malta, to the surprise of nobody who’s ever spent more than 10 minutes in traffic on this island behind some ancient jalopy belching foul black clouds of exhaust on everyone unlucky enough to be stuck behind it.

Even worse, a study published this year in the scientific journal Nature showed that 38,000 people die prematurely every year – mostly in Europe – due to the failure of diesel vehicles to meet official limits in real driving conditions, leading to excessive emissions being pumped out and an increase in heart disease, lung disease and strokes. Furthermore, the prevalence of respiratory diseases in Malta, exacerbated by the pollution in the air is worrying; according to Eurostat figures published in 2015, 13.7 per cent of all deaths in Malta in 2012 were due to respiratory diseases – a number that is bound to have risen since then.

Many countries in Europe and beyond rightly feel that they can’t possibly ignore this situation any longer, and have started taking steps to get rid of, or at least lessen the impact of diesel vehicles, which contribute heavily to CO2 emissions. Of course, it’s not simply fuelled by concern for the well-being of their residents – by 2020 more stringent EU emissions standards will come into force, following the Volkswagen scandal that saw the automobile giant admit that it had used engineering software to cheat emissions tests. In light of this, Britain and France have said that they would ban sales of new gasoline and diesel cars starting in 2040 as part of a bid to clean up the air. In Norway, a leader in electric and hybrid transportation, all

new passenger cars and vans sold as of 2025 should be zero-emission vehicles.

Currently, electric and hybrid vehicles account for just three per cent of global auto sales, according to IHS Markit, so the goals set out may be light years away from actually being achieved. However, even manufacturers themselves are gradually moving away from diesel engines. Last year, French car maker Renault said that more time, effort and resources would have to be poured into developing electric and clean-energy cars; even though the company, like the majority of European car manufacturers, had been heavily reliant on its diesel products for many years, diesel was on its way out. In July of this year, Swedish auto manufacturer Volvo went a step further by pledging to stop making petrol and diesel cars; all of its new models will be fully electric or hybrid by 2019, and it aims to sell one million electric vehicles - either hybrids or those powered solely by battery by 2025.

Malta cannot be left behind in all this. With a decrease of 18.2 per cent, Malta in 2016 registered the largest drop in CO2 emissions across the European Union – a commendable effort on the way forward to reaching its 2020 renewable energy targets. But elsewhere, a different story is unfolding – 43 new (and not so new) vehicles are added to our already clogged and overloaded roads every single day. If we keep clinging to our diesel vehicles instead of moving forward with the rest of the world, the efforts that have been made so far to use cleaner sources of energy in homes and in industry will be cancelled out by the filth produced on our roads. If Malta reduces air pollution, we are likely to benefit from a reduced burden from heart disease, lung cancer, chronic and acute respiratory diseases, as well as improving the quality of life overall. It’s time to read the writing on the wall, and Government needs to take the lead in supporting a greener way forward.

Publishers Allied Newspapers Ltd. Content House Group Ltd.

Advertising Enquiries Tel: 2132 0713 Email: info@contenthouse.com.mt Advertising Sales Petra Borg Urso Brand Manager Advertising Sales Coordinators Lindsey Napier Marvic Cutajar

Printer Progress Press Ltd.

BUSINESS OPINION

e 18-month outlook for Malta’s tourism industry, and beyond

Tony Zahra There has long been the perception within the tourism industry that if you wish to gauge how the sector is going to fare in the next 18 months, then you should look no further than the air connectivity that will be available; or to be more specific, the number of seats to Malta that will be offered by the various airlines flying to Malta. I am told that the number of seats for winter 2017-2018 to Malta will exceed the number of seats that were available during the period when Malta held the EU Presidency. I am also informed that between April and October 2018, the number of seats also exceed those of the same period in 2017. Therefore it

is reasonable to expect that both in the coming winter months and in summer 2018, the trend of ever-increasing arrivals will continue.

Some in the industry have been asked to gauge the impact in arrivals that the EU Presidency had on arrivals between January and June 2017; I am told that this was in the region of 20,000 visitors. Whilst there is no doubt that this was a very welcome number, it is not a number that cannot be replicated over a six-month period.

So the 18-month outlook for arrivals looks promising; but what about the industry as a whole? How will it perform? The increase in arrivals has had a tremendous impact on the occupancy level of hotels and this has spurred on quite a few to add more beds to their establishments. We don’t have information as to when and how many new beds are coming on the market, but what is sure is that for a number of years now, practically all the increases in tourist arrivals have gone to so-called noncollective accommodation, or as we in the industry perceive them, as mostly unregulated and unlicensed establishments. If this trend continues and the number

of new collective accommodation is significant (more than 10 per cent) then it could mean that there would be pressure put on collective accommodation to reduce their rates. Naturally, this is not good for the health of the accommodation industry.

As for the restaurant business, there seem to be many more establishments, and many more covers. Consequently, one wonders whether the number of covers is increasing at a stronger pace than the number of arrivals. The other phenomenon that we are witnessing is the large number of non-Maltese nationals running these catering establishments and the lack of availability of Maltese staff in the restaurant sector. Clearly we have to ensure that the rules and regulations are abided by everyone as otherwise we create an uneven playing field.

For many people, envisioning beyond the next 18 months sounds like the distant future. But it isn’t; it’s the near future. If one were talking about a vision, then one would discuss a 20-year vision. Is it time to have a 20-year vision? And what should this be?

This has to be the debate. Personally, I think it is well overdue for such a vision to have been put in

“I am told that the number of seats for winter 2017-2018 to Malta will exceed the number of seats that were available during the period when Malta held the EU Presidency. ” place. Without a vision in place to guide us to our ends, the tourism industry will be unable to check whether it is achieving the success it desires or not.

Tony Zahra is the Chairman of Bastion Holdings Ltd and President of the Malta Hotels and Restaurants Association (MHRA).

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CASE STUDY

Protecting Malta’s historical heritage costs over €12m each year

Rebecca Anastasi With palaces, old forts and Neolithic temples demanding endless skilled and expensive repairs, the annual operational expenditure of Heritage Malta, the national agency for museums, conservation practice and cultural heritage, amounts to around €12 million per year, Noel Zammit, the Head of Corporate Services and ICT at Heritage Malta confirmed to The Business Observer.

“The central Government injects circa €5 million per year and the agency itself generates more than €5 million from admission fees,” Mr

Zammit explained. “The rest is revenue generated from business development, including the rental of Heritage Malta-managed venues.”

Indeed, this is just one of the reasons why Heritage Malta has opened some of its sites for special events and functions – with a variety of venues becoming living, breathing spaces once again.

These include outdoor venues such as Fort St Elmo, Bighi and Vilhena Palace, where open-air events, ranging from concerts to product launches, have been organised. The majestic front courtyard at Vilhena Palace, now the National Museum of Natural History, just a few steps away from the main gate of Mdina,

for example, was recently transformed into a reception venue, where guests enjoyed dinner under the stars, surrounded by more than 250 years of history.

Other notable events organised at these sites include the Malta Fashion Week, hosted in 2016 at Fort St Angelo, and in 2017 at Fort St Elmo, as well as various theatrical productions, screenings, and concerts as part of the Malta Arts Festival, the Valletta Film Festival, and the World Music Festival.

Smaller closed spaces, such as the Inquisitor’s Palace, the Malta Maritime Museum and Fort St Angelo, able to accommodate smallto medium-sized groups for meet-

A WEDDING HELD AT VILLA BIGHI, KALKARA.

ings or dinners, are also available, as well as the stunning Grand Salon in the National Museum of Archaeology, which may also be used for conferences.

“Organisers want to impress their clients. Our venues are not ordinary, and we already hold years of experience within the field. By making these spaces available, we are also promoting Malta’s cultural heritage presented as a unique backdrop; something very few other venues can offer,” Mr Zammit explained.

The conservation of these sites is key, Mr Zammit insisted. In fact, “the rental of any museum or site is done via a contract that is specific to

that location, including detailed terms and conditions with the aim of safeguarding the location and its usage.” All the necessary precautions are taken. For instance, no fireworks and no naked flame equipment are allowed in any of these venues, and, in some (such as the Grand Salon), food and drinks are prohibited. In the latter case, an alternative adjacent hall, where refreshments can be served, is offered.

With regard to the more sensitive sites, such as the Neolithic temples of Hagar Qim and Mnajdra, as well as Ggantija and Ghar Dalam, “the cultural heritage fabric of these attractions is never exposed to any large event,” Mr

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CASE STUDY

Zammit insisted. Indeed, though some of these locations can be, and have been, used as backdrops for photo shoots or filming, as well as more intimate events such as civil ceremonies, “every restriction and necessary precaution is considered when an event is organised,” Mr Zammit explained. Moreover, during such occasions, curators and conservators themselves are involved and everything is managed in line with the entity’s policies.

The price for the rental of these venues varies. Heritage Malta quotes according to the nature of the situation, and the tangible and intangible costs and benefits of organising a specific type of event.

“Hence, for instance, hosting a wedding at Bighi will not cost as much as hosting a concert,” Mr Zammit said. Rental charges of large open-air spaces vary from €2,000 up to €7,000, while for closed areas and small locations prices start from €350.

While the entity also offers basic catering, equipment, office supplies and other standard facilities in the case of meetings and conferences, other ancillary services for larger events are normally organised by the client, allowing for flexibility.

“Every type of event has different requirements and the agency strives to offer the best possible service

without intruding in terms of what the client wants and needs for the special occasion,” said Mr Zammit.

Heritage Malta has ambitious plans to ensure accessibility to these sites and museums is developed further. Indeed, while the agency already attracts over 45,000 students per year to events in its museums, the wealth of Malta’s heritage can now also be discovered digitally. The agency has already partnered with Google to launch virtual exhibitions, and the intention is to also provide alternative learning tools and online products to school children, at various levels, to develop their interest in Malta’s cultural legacy.

Moreover, the entity is also organising events to diversify the types of visitors it attracts to the sites. “We are currently working on themed dinners, during which we will offer a culinary experience.

During these occasions, ingredients are cooked according to recipes of periods in history, and linked to the location where the dinner is consumed,” Mr Zammit said. Sixteenth and 18th-century menus are currently being offered at the Malta Maritime Museum, and the aim is to replicate these unique opportunities at Fort St Angelo and Fort St Elmo, serving food inspired from different eras.

INQUISITOR’S PALACE, BIRGU

“Providing such experiences means reaching our objectives of making our cultural heritage more accessible by using different approaches,” Mr Zammit pointed out. The past is invigorated, making us feel as if no time has passed at all.

For more information contact the Business Development Department at Heritage Malta, Ex-Royal Naval Hospital, Marina Street, Kalkara.

T: 2295 4300; E: info@heritagemalta.org; www.heritagemalta.org/venues

“Our venues are not ordinary and we already hold years of experience within the field. By making these spaces available, we are also promoting Malta’s cultural heritage.” – Noel Zammit, head of Corporate Services and ICT, Heritage Malta

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INDUSTRY FOCUS

A destination for international luxury property buyers Many real estate companies and property developments in Malta are focusing on attracting high-calibre international clients.

Five representatives of property agencies and high-end developments discuss Malta’s appeal to prestige buyers, what can be improved and showcase some of their more luxurious offerings.

BELAIR REAL ESTATE

JOHN TAYLOR MALTA

Nowadays, foreign buyers make up a substantial portion of Malta’s real estate buyers’ market. How does Belair market Malta and Maltese properties abroad?

Established in 1967, Belair Property is today considered one of the main players in the local real estate market. As an agency that has always based its way of doing business on creating and maintaining long-term relationships with our clients, foreign buyers have always made up a significant share of our business.

Whereas in the past, our foreign buyers were predominantly residential buyers looking for a home or second holiday home, nowadays some foreign buyers are looking for a pied-à-terre to satisfy their residency requirements, while others are also looking for investment property, which can take the form of quality office space or well-located residential property that provides a decent yield. Each Belair office includes a number of experienced team members, who have worked in the industry for decades and have, among other things, a clear understanding of property values, what is hot and what’s not! This has enabled us to guide clients responsibly, thus achieving the desired results (in particular – investment returns or yields) and in the process building on our credibility and reputation, particularly with these foreign buyers who need someone to genuinely rely on, in a country that is not their own.

As with everything else, ‘word of mouth is your best form of advertising’ applies to real estate, more so when it comes to foreign buyers or their intermediaries, and this has helped us develop a solid reputation in overseas markets, especially over the last decade or so.

Regular press releases and articles in foreign press and publications, as well as information seminars on Malta and Maltese property are also embarked on on a yearly basis, as well as attendance to major international residency or tax conferences and forums and in many cases, the participation in or sponsorship of these events. In doing all this, we have created a niche and a strength, where our overseas clients or their advisors know that we can offer them added value, knowledge and support. This is something we are proud of and better still, we simply love doing!

As purveyors of luxury properties, what can be improved in Malta in order to be better able to cater to the luxury market?

At John Taylor, we pride ourselves on not just selling properties – we make dreams happen. A key value at the centre of our mission is the focus on the particular needs, desires and aspirations of each client who comes through our door. And luxury investors are financially able travellers who are willing to pay very large sums of money in order to satisfy all of their desires. In Malta, I think we still have to improve on many things such as infrastructure, hotels, concierge services and flight connections, to give a few examples. It’s no longer enough to meet or exceed standards. Luxury means experiencing destinations in inspirational, unprecedented ways, on your terms. A truly luxury destination must provide experiences tailored to your personalised preferences, including what you desire, how you like it, wherever and whenever you want it.

Ian Casolani Managing Director

Michael Hili Managing Director

RE/MAX MALTA

Jeff Buttigieg Co-owner and COO With house prices continuously rising and new projects announced almost every day, how can Malta prevent a property boom without freezing the lucrative construction and property industry?

We feel that we are in a current property boom, with supply meeting demand across the board. It is important that just like in other countries, Government must assist those people who may not afford to purchase, which is a small percentage of the population. The rental schemes introduced will make a major positive impact on society. Is it enough? This is something that we must wait and see.

We are sure that our current Government has done its homework just as it has done before and proven itself several times over. It is correct to say that there has been a spike in rental properties, however one cannot take an average price across the board. It is a known fact that properties, located in the eastcentral areas fetch much higher rents than Southern and Northern harbours for example. We

recognise a problem in this area, however, this is being tackled at its head.

As for buyers, we know that the first-time buyer scheme continues to assist young couples to join the property ladder. We have also have seen a trend where some buyers decide to put off a purchase for a couple of years; however this is a norm in society. At this stage, the numbers make sense and as the largest real estate agency in Malta, we would foresee any changes before anybody else.

THE SHORELINE, SMART CITY Steve Carter Managing Director (Ricasoli Properties Ltd)

What makes The Shoreline project a worthwhile investment in Malta?

Whether buying an apartment at The Shoreline in SmartCity, Kalkara, for own use or for letting purposes, both options offer interesting possibilities. Apart from living at a prestigious address, these 420 apartments offer great

views of the coastline and benefit from secure access-controlled community living, while enjoying a fresh, clean and unpolluted pedestrianised environment.

For one’s convenience, The Shoreline will have an underground car park, and a mall with over 30 outlets. Such properties can result in great re-sale value.

Should one decide to buy to let, The Shoreline is a most prestigious location close to the Continued on page 16

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INDUSTRY FOCUS

“Luxury means experiencing destinations in inspirational, unprecedented ways” Continued from page 15 Malta International Airport, the Malta Freeport, Valletta, the Three Cities, and the American University of Malta. It will increasingly develop into a modern, distinctly cosmopolitan and Mediterranean urban community that is so much appreciated by foreigners working for the longer term in Malta. Recent research has shown that 90 per cent of foreigners find it easy to settle down in Malta, while the global average is only 59 per cent.

Moreover, the fact that the project is in a specially designated area (SDA) which status allows both EU and non-EU nationals to purchase property at The Shoreline with the same acquisition rights as Maltese citizens, and without the need to obtain an Acquisition of Immovable Property (AIP) permit, has been duly noted by foreign investors. In our case, there are no

limits on the amount of properties a buyer can purchase and, once acquired, the owner can also lease the property.

PENDERGARDENS, ST JULIAN’S Peter Diacono CEO

T1T2 – the tower within the Pendergardens development – has recently been launched. What makes this residence such a great offering within the local market?

T1T2 will be the jewel in the crown of Pendergardens. There are four apartments per floor, and they are all semi-detached – so all the main rooms have windows or balconies onto the exterior. They all have views, whether sea or country views, and they’re full of natural light. The level of finish is extremely high, and every individual apartment was designed by interior designer Perit Kenneth Zammit Endrich, who gave lots of

thought to maximising the space.

Meanwhile, the design of the exterior and common parts of the tower is by Perit Edward Bencini.

T1T2 will also have its own spacious residential lobby which is off the piazza, so it will form part of the bigger Pendergardens community, while the underlying office block will have its own separate lifts and lobby opening on to St Andrews Road.

Another draw in the residential offering is Pendergardens’ status as a Special Designated Area (SDA), which is of benefit for all non-Maltese purchasers because the Acquisition of Immovable Property permit for non-residents will not be required. This allows for normal property transfer, allowing non-Maltese property buyers to purchase more than one property at a time or purchasing as part of a trust or as a company asset in any name the owner chooses. It also permits owners to rent out the property as and when they see fit.

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Works on final phase of Pendergardens in full swing Sarah Micallef PETER DIACONO (CEO) (LEFT) AND MICHAEL DE MARIA (SALES AND MARKETING MANAGER) (RIGHT) AT PENTHOUSE LEVEL IN T1T2. PHOTOS: JAN ZAMMIT

Following the excellent response to its first seven apartment blocks, works on the final phase of luxury residential and commercial development Pendergardens are now in full swing. “The idea behind Pendergardens was to have a development with a mixed purpose,” explained CEO Peter Diacono, describing the flourishing project as the ideal place for a high-quality lifestyle and an excellent space to do business.

Apart from a variety of luxury residences, Pendergardens also encompasses a peaceful piazza and underground parking area, and once completed, will further comprise high-end office and retail space, as well as a wellness centre and pool. But before we delve further into that, Sales and Marketing Manager Michael De Maria outlines what has gone into the project – and what’s been released onto the market – thus far.

“We started by releasing residential Blocks 11, 12, 13, 14 and 15 in May 2007 followed by Block 10 a year later. These residential blocks surrounding the piazza consisted of 150 apartments,” he explained, maintaining that they were all sold. “We later launched Block 16, which consisted of 46 apartments – this featured a different concept wherein we also introduced duplex apartments within the block. These were also very well received and sold. There is currently only one which remains to be sold,” he continued.

This brings us to Pendergardens’ final phase, which is currently underway. The residential part consists of Block 17 which has 47 apartments, as well as 28 apartments and two penthouses within the tower, T1T2. “We launched the apartments in Block

17 in May 2016, and they were snapped up on plan. We’ve now recently launched the 28 apartments in T1T2, and they have also been very well received, in fact 12 have already been reserved and preliminary agreements on these apartments are being signed,” said Mr De Maria.

And whereas the team behind the luxury development has always strived for the highest level of finish, Mr Diacono asserted that with these final residences in particular, the bar has been well and truly raised. “Although our finishes were always on the upper end of the market we’ve always upped our game with each launch. T1T2 will be the jewel in the crown, and we’re really going to town.”

Speaking of the vision behind the project, the two assert that from the outset, the idea was for Pendergardens to be somewhere you can live, work and relax.

“The ‘live’ translated into the residential apartments, of which there are various types; for the ‘work’ we have the office space; and as for ‘relax’, we try to make it a point to have as many external areas and beautiful views as possible, not to mention the piazza, which provides a great environment in which you can unwind,” Mr Diacono maintained. “As soon as you come into Pendergardens, you feel a sense of homecoming and relaxation, even though we are bang in the centre of the hustle and bustle of St Julian’s,” he contin-

ued, drawing on the company’s slogan ‘everything surrounds you’. Indeed, it is a true feat to have created such an oasis within one of the island’s busiest areas – a feature which the pair rightly consider to be one of Pendergardens’ major selling points.

The last phase of the project is currently underway, and will include a selection of luxury apartments in Block 17 and T1T2.

Apart from the location, I ask, what makes these residences a great offering within the local market?

“Most of the residential units in Block 17 have been snapped up on plan,” said Mr Diacono, explaining that only three remain within the whole block. “They’re very attractive with large terraces,

“T1T2 will be the jewel in the crown, and we’re really going to town.” – Pendergardens CEO Peter Diacono and these will be ready in October next year,” Mr De Maria added. As for T1T2, “there are four apartments per floor, and they are all semi-detached – so all the main rooms have windows or balconies onto the exterior. They all have views, whether sea or country views, and they’re full of natural light. Another draw is the finish – we are selling them finished with ACs, lighting in false ceilings throughout, underfloor heating, a smart home system, LPG gas and a gas boiler,” they affirmed. All the new owners have to do is furnish!

“The level of finish is extremely high, and every individual apartment was designed by interior designer Perit Kenneth Zammit Endrich, who gave lots of thought to maximising the space. Meanwhile, the design of the exterior and common parts of the tower is

by Perit Edward Bencini,” they continued. T1T2 will also have its own spacious residential lobby which is off the piazza, so it will form part of the bigger Pendergardens community, while the underlying office block will have its own separate lifts and lobby opening on to St Andrews Road.

Meanwhile, another draw in the residential offering is Pendergardens’ status as a Special Designated Area (SDA). “This is of

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benefit for all non-Maltese purchasers because the Acquisition of Immovable Property permit for non-residents will not be required,” the pair explained. “This allows for normal property transfered, allowing non-Maltese property buyers to purchase more than one property at a time or purchasing as part of a trust or as a company asset in any name the owner chooses. It also permits owners to rent out the property as and when they see fit.”

On the commercial side, the project will also house the Pendergardens Business Centre which boasts 5,500sqm of office space. “We have offices on the seven lower floors of the tower. We’ve very recently put them on the market to lease in shell, and roughly 60 per cent are already committed, which is very encouraging. These will be delivered for business to start in the fourth quarter of next year,” Mr Diacono maintained. Asked what makes the offices here attractive to the business community, he explained that St Julian’s is the top area for businesses locally, and Pendergardens is a very convenient place to have an office, being located just off Regional Road and offering comfortable on-site parking. “We know that many companies seek a good location, firstly because it helps with attracting and retaining employees, and secondly because an iconic address helps with the positioning of their business within their industry” he said.

Finally, Pendergardens will also include several retail outlets and other facilities, which will serve to pull off what the pair consider “a total revamp of the façade of St

Andrews Road.” The retail setup will include seven retail outlets in all, the first of which being confirmed as Optika Opticians, as well as a large Valyou Supermarket. The pair divulge that they are also close to signing with a number of other retail outlets, but can not give details just yet.

Speaking of the retail outlets, they affirmed, “the shops will all be double height but of varying sizes, from substantially large to smaller ones. We are aiming at a mix of tenants – primarily to serve our own residents when it comes to convenience, and also to attract the general public.”

Situated above the supermarket, a wellness centre which will also include an external swimming pool will be open to both residents and the public. Meanwhile, the last commercial component is the public car park, which will primarily serve residents’ guests, shoppers and people working at the Pendergardens Business Centre during the day, and the visiting general public as the business community moves out in the evening.

The car park will also have an upmarket car washing service.

With the entire project set for completion by March 2019, it’s easy to see what has gotten buyers, investors and business owners keen to get their hands on a piece of Pendergardens. And as I am escorted to the top of T1T2 equipped as necessary with hard hat and safety shoes, I look out at the sweeping views of the vibrant St Julian’s below and Mediterranean Sea beyond, and can confirm that there’s an allure here that’s hard to resist.

PETER DIACONO (CEO) (LEFT) AND MICHAEL DE MARIA (SALES AND MARKETING MANAGER) (RIGHT) AT PIAZZA

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STOCK MARKET REVIEW

e EU Capital Markets Union: from a Prospectus Directive to a Regulation

Alistair Cuschieri

Early this year, the European Union (EU) leaders gathered in Rome to celebrate the 60th anniversary of the Treaty of Rome.

Many consider this Treaty as a major stepping stone for the creation of the EU since it focused overwhelmingly on economic co-operation and the freedom to move goods, capital and people.

An important European project emanating from the principles of the Treaty of Rome and which marked the beginning of a new phase for the European capital markets was launched on 30 September 2015. Accordingly, on this date, the European Commission (EC) published its action plan for a Capital Markets Union (CMU) which was mainly intended to kick-start growth in Europe by revitalising the capital markets while at the same time maintaining stability.

But why is the CMU initiative so vital for the financial stability of the EU? The EC recognised that companies in Europe remain largely reliant on bank financing, which made them vulnerable during the financial crisis when banks limited their lending to businesses. The CMU

is therefore intended to reduce or eliminate obstacles to cross-border investment, and to make the capital markets more accessible to small and medium-sized enterprises (SMEs) as an alternative to bank borrowings.

From the early stages of the CMU project, the EC has identified a list of key changes intended to be targeted in the immediate term. In this respect, on 30 November 2015, the EC proposed a reform of both the Prospectus Directive 2003/71/EC and the supplemental EU Regulation 809/2004 (the latter prescribes the form and content of a prospectus required by the Directive) with the aim of introducing a lighter, less burdensome prospectus regime.

While the existing Prospectus Directive has worked relatively well since 2005, the EC recognised that it has created some legal uncertainties and imposed some burdensome requirements, leading to increased costs and the creation of inefficiencies, which could impede the process of raising funds on the securities markets in the EU. In particular,

it has been acknowledged that since the existing European prospectus regime derives from a Directive, which had to be transposed into domestic law by member states, there has been some divergence among member states in how its provisions have been interpreted in the transposing legislation. Consequently, a decision was taken that the existing framework should be replaced with a new, directly effective Prospectus Regulation, which, as an EU Regulation, as opposed to a Directive, will not require the passing of implementing legislation at member state level (this is a similar process to that which led to the replacement of the old Market Abuse Directive last year with a new directly effective Market Abuse Regulation). Accordingly, on 8 June 2016, the European Parliament, the EU Council and the EC agreed on a revamped EU prospectus regime, ensuring that the facilitation of the approval process makes it easier for companies to raise capital throughout the EU, reduce costs involved and simplify information for in-

vestors. On 5 April 2017, the proposal for the new Prospectus Regulation was approved by the European Parliament and on 20 July 2017 (after its publication in the Official Journal on 30 June 2017), the new Prospectus Regulation entered into force.

The provisions of the new Prospectus Regulation will begin to apply on a rolling basis, with full application from 21 July 2019. The new Regulation includes several changes relevant for both equity and debt capital market transactions which relate to prospectus exemptions and the content and format of prospectuses.

One key change emanating from the new Prospectus Regulation relates to the exemptions under which no prospectus is required for the public offering of securities or the admission of securities to trading on a regulated market, in particular: (i) for the listing of securities which are fungible with securities already admitted to trading on the same regulated market, if the new securities represent less than 20 per cent (previous threshold had

“However, Brexit is posing a challenge to the CMU initiative. In fact, this has recently forced the EU to rethink its flagship project. On the one hand, it is a major challenge for the CMU given the importance of the City of London for EU capital markets. On the other hand, Brexit has prompted the need to further strengthen and integrate EU capital markets and EUwide supervision to achieve the ambitious project. ”

been 10 per cent) of the securities already listed over a 12month period (this change entered into force on 20 July 2017); and (ii) for small offerings, which will only be exempt if they are for a total consideration of €1 million or less over a 12-month period (previously €2.5 million).

This threshold may be increased to an upper limit of €8 million for the same period at the discretion of member states (previously the upper threshold was €5 million). member states can require other disclosure requirements at the national level for issues not exceeding the threshold if they are not unnecessarily burdensome.

This requirement will take effect 12 months from the date the Regulation enters into force (i.e. in the third quarter of 2018).

Another key change to the prospectus regime will target SMEs where they will be able to use a simplified EU Growth Prospectus. This new concept will allow certain qualifying entities to benefit from lower disclosure obligations than under a standard prospectus. The EC is currently consulting the European Securities and Markets Authority (ESMA) and the wider market on the content and format of the EU Growth Prospectus. This consultation will close on 28 September 2017.

An important update resulting from the new Prospectus Regulation relates to the form and content of the summary note. Key changes are that the summary note will be shortened to a maximum length of seven pages of A4 written in a concise manner.

Moreover, it can only contain the 15 most material risk factors specific to the issuer (cross-references to other sections remain

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prohibited). The summary has to comprise four sections – (i) an introduction containing warnings; (ii) key information on the issuer; (iii) key information on the securities; and (iv) key information on the offer itself and/or the admission to trading. For each of the sections, the new Prospectus Regulation introduces a number of subsections with specific content requirements. Among others, the section regarding key information on the issuer will contain a subsection covering the key financial information regarding the issuer, consisting of a selection of historical key financial information, whose content and format has to be developed further by ESMA during the consultation period which closes on 28 September 2017.

Another change to the prospectus regime is the introduction by ESMA of a free and searchable online database containing all prospectuses approved in the European Economic Area (EEA) and related documents. This has been in the making for a number of years and will be quite significant in practice, as it will make it much easier to access prospectuses for offerings across the EU on one platform. The intention is to assist consumers in taking investment decisions by allowing a more thorough comparison of investment products. Issuers will still be required to provide a free paper copy of the prospectus to anyone who requests it.

In the coming months, the EC and ESMA are to develop several implementing rules and standards required by the new Regulation. As a result, in addition to the above-mentioned consultations, the EC is also consulting ESMA and the wider market on the format and content of the prospectus, and the scrutiny and approval process of the prospectus. The consultation period closes on 28 September 2017, and ESMA plans to deliver the technical advice to the EC by 31 March 2018. It is anticipated that the bulk of the new proposed Prospectus Regulation will be in place by 2019.

However, Brexit is posing a challenge to the CMU initiative.

In fact, this has recently forced the EU to rethink its flagship project. On the one hand, it is a major challenge for the CMU given the importance of the City of London for EU capital markets. On the other hand, Brexit has prompted the need to further strengthen and integrate EU capital markets and EU-wide supervision to achieve the ambitious project.

In conclusion, the new Prospectus Regulation will change current prospectus rules and practice for both equity and debt issuances and will contribute to a more uniform European prospectus regime. It remains to be seen how ESMA and the EC will shape a number of the Regulation’s provisions in further implementing acts, and how all the new rules will be applied in practice from 2019.

Alistair Cuschieri is a Corporate Advisory Executive at Rizzo, Farrugia & Co (Stockbrokers) Ltd.

Rizzo, Farrugia & Co. (Stockbrokers) Ltd, “Rizzo Farrugia”, is a member of the Malta Stock Exchange and licensed by the Malta Financial Services Authority. This article has been prepared in accordance with legal requirements. It has not been disclosed to the company/s herein mentioned (if applicable) before its publication. It is based on public information only and is published solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. The author and other relevant persons may not trade in the securities, if any, to which this article relates (other than executing unsolicited client orders) until such time as the recipients of this article have had a reasonable opportunity to act thereon. Rizzo Farrugia, its directors, the author of this report, other employees or Rizzo Farrugia on behalf of its clients, may have holdings in the securities herein mentioned, if any, and may at any time make purchases and/or sales in them as principal or agent, and may also have other business relationships with the company/s. Stock markets are volatile and subject to fluctuations which cannot be reasonably foreseen. Past performance is not necessarily indicative of future results. Neither Rizzo Farrugia, nor any of its directors or employees accept any liability for any loss or damage arising out of the use of all or any part thereof and no representation or warranty is provided in respect of the reliability of the information contained in this article.

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For John Taylor clients, ‘the world is truly their oyster’

With a presence that spans over 150 years, high-end real estate company John Taylor has long established itself as the pre-eminent player in the luxury property sector in Monaco and on the French Riviera, and is now soaring to the top in Malta too. “John Taylor is recognised as one of the most prestigious luxury real estate firms in the world. With offices spread across continents, we are proud of our long tradition of service to those looking for an exclusive property. Our market is

MICHAEL HILI, MANAGING DIRECTOR, JOHN TAYLOR MALTA

specialised and exclusive, requiring a combination of many things for it to work. For our discerning clients, the world is truly their oyster,” said Michael Hili, who heads the brand in Malta as its managing director. “They have the means and the ability to go to any country in search of what they are exactly looking for.”

John Taylor prides itself on not just selling properties – “we make dreams happen. A key value at the centre of our mission is the focus on particular needs, desires

“A truly luxury destination must provide experiences tailored to your personalised preferences, including what you desire, how you like it, and where and when you want it.”

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and aspirations of each client who comes through our door,” Mr Hili said. “Our core values and convictions distinguish us in an increasingly competitive market. We assert our expertise and professional integrity by maintaining open and straightforward communication with our clients who will be guided through the entire process with a personalised approach. As experts in the field, we feel it is our duty to fulfil the expectations of both purchaser and seller without conflicts of interest. Loyalty towards our clients is a major pillar of our business.”

“In Malta, real estate is a good investment as traditionally the value has always gone up, even during the worst of the global financial crisis in 2008, which barely hit Malta. I think Malta is a great destination for property investors; despite its size, Malta has a very healthy economy and is now one of the top performing members of the European Union on all the key economic and financial fronts,” Mr Hili said.

“Foreign investment is booming, substantial projects are in progress, financial and iGaming sectors are thriving and tourism is hitting year-on-year records.”

Another part of Malta’s appeal for luxury property buyers lies in the fact that it is “a living museum. Wherever you go, Malta’s history seems to surround and envelop you, making you a part of it.”

However, Mr Hili stated that he believes that there is much that can be improved upon in Malta in order to cater to the luxury market. “Luxury investors are financially able travellers who are willing to pay very large sums of money in order to satisfy all of their desires. In Malta, I think we still have to improve on many things such as infrastructure, hotels, concierge services and flight connections, to give a few examples. It’s no longer enough to meet or exceed standards. Luxury means experiencing destinations in inspirational, unprecedented ways, on your terms. A truly luxury destination must provide experiences tailored to your personalised preferences, including what you desire, how you like it, and where and when you want it.”

John Taylor is present in 14 countries with 26 offices worldwide. “As

a multinational brand, we believe that we have struck the right balance between our corporate mission and the diverse cultures of the countries where we do business.

The strength at the centre of our firm comes from the deep roots we put down wherever we operate; and we have put down strong roots to attract foreign investment beyond our shores,” Mr Hili concluded.

Two of John Taylor’s many exclusive Malta properties Rare townhouse in Valletta (view pictured left) John Taylor is proud to offer for sale exclusively a two-bedroom townhouse in Valletta, with breath-taking unobstructed views of the Three Cities and the Grand

Harbour. The townhouse comprises a kitchen with living/dining room, two bathrooms and two bedrooms, one of which has an en suite. The bathrooms are fitted with new smart technology, imported from Germany. This property could easily be converted into a three-bedroom house, or kept as is. This rare townhouse has to be seen to be appreciated, and is situated near all major amenities.

Laguna Project seafront apartment, Portomaso (pictured above) A great opportunity to purchase this superb seafront apartment measuring 214sqm, which is being sold on plan in the luxurious development of the Laguna Project in Portomaso.

Set on the first floor and comprising three bedrooms all with en suite bathrooms, open plan kitchen/liv-

“I think Malta is a great destination for property investors; despite its size, Malta has a very healthy economy and is now one of the top performing members of the European Union on all the key economic and financial fronts.” – Michael Hili, Managing Director, John Taylor Malta ing/dining room, entrance hall, laundry room and guest toilet, this property is being sold highly finished. Complementing it is a large terrace and two car spaces.

For more information about these properties and others within John Taylor’s portfolio call T: 2328 1000 or visit www.johntaylor.com.mt

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“Smoking marijuana on the job should be cause for instant dismissal” - MEA The President of the Malta Employers’ Association, Dolores Sammut Bonnici has stated that if marijuana were to be legalised, employers should have the right to conduct drug tests on employees to find out whether they have been smoking on the job and whether they are under the influence. “Smoking marijuana on the job is unacceptable behaviour even if the substance were to be legalised. As with other serious offences, it should be a cause for instant dismissal. If legalisation is on the cards, there should be clear safeguards for employers, which give them the right, for example, to conduct drug testing on employees not just to determine whether they have smoked at the workplace, but also to establish whether they are under the influence,” she told The Business Observer. “This will avoid potential risks to themselves and other employees, bearing in mind that the effects of the substance may last anything between two and six hours. Even if there are no immediate health and safety risks, companies should be free to implement policies that do not allow employees on their premises under the influence and to take any disciplinary action against employees found to be in breach of such regulations.”

The question of legalising marijuana in Malta reared its head during this year’s snap election campaign, when Prime Minister Joseph Muscat said that a Labour Government would initiate discussions on the use of cannabis for recreational use, which would lead to the regularisation of the drug, and take it out of the hands of drug traffickers. Following his statement, the Nationalist Party and the Partit Demokratiku also called for a debate on the issue

based on scientific facts at the time, although since then, PN leadership hopefuls Adrian Delia and Chris Said have changed their original stance on the issue, saying they oppose the legalisation of the drug for recreational purposes, and Alex Perici Calascione has been noncommittal.

In her comments to this newspaper, Ms Sammut Bonnici highlighted the ways in which employees consuming marijuana could prove to be troublesome for those who employ them.

“Smoking marijuana is not exactly conducive to higher productivity. It is documented to impede memory, problem solving, balance and coordination, concentration and reaction time. The side effects of smoking marijuana may also lead to an increase in sick leave - both directly because of the properties of the substance and also indirectly due to increased absence because employees may opt to report sick to avoid reporting for work if they are still under the influence. This could be costly to employers. Employees should be obliged to notify employers that they are consuming marijuana even if it is for medicinal purposes.”

Ms Sammut Bonnici said that the idea of legalising marijuana for recreational or medicinal use had various social implications and has to be discussed carefully with all stakeholders involved.

“A major consideration is whether the idea is being floated because the authorities believe that marijuana is a mild and relatively harmless drug, or because they have given up the fight against what is, until today, an illegal substance. What needs to be seen is the social costs and possible increase in accidents and crime connected to drug consumption,

and its potential to lure persons to consume harder drugs if marijuana is legalised.”

Asked about the consumption of legal marijuana at work, Health and Safety consultant Anthony Bezzina, who has worked as a professional in the sector of Occupational Health and Safety for more than 15 years, told The Business Observer that a qualitative research study involving many stakeholders and experts had to be made before legalising marijuana in Malta, and especially if its consumption were to be allowed at the workplace. “Marijuana can affect concentration and mental abilities, and may increase the risk of workplace-related incidents. Without the exclusion of any workplaces, workplaces differ from each other and the risk depends on the nature of the job being carried out and the people performing the work. Working in an office is normally classified as low-risk when compared to construction or manufacturing work. The nature of the work still involves some degree of risk – although employers are required by law to take a proactive approach to reduce such risk, the residual risk always remains. An example is operating dangerous, heavy machinery such as a fork-lifter or a tower crane. An even more extreme example is the aviation sector – the pilot has the responsibility of all the passengers and crew on board, as well as the aircraft. If the pilot lacks concentration, factors including fatigue, stress, or any substance abuse could mean the lives of all persons on board and at the crash site. If the pilot had to make the slightest mistake it could lead to devastation.”

“Restrictions on the use of marijuana, as with any other drug, to-

DOLORES SAMMUT BONNICI, PRESIDENT, MALTA EMPLOYERS’ ASSOCIATION

“Employees should be obliged to notify employers that they are consuming marijuana even if it is for medicinal purposes.” – Dolores Sammut Bonnici, President, Malta Employers’ Association bacco, or alcohol, are to be implemented at all workplaces. Employees must cooperate and communicate with the employer, and must comply with any safety policy imposed onto them.” Mr Bezzina concluded by saying that

should marijuana end up being legalised, the employer had to ensure that sufficient supervision is maintained and sufficient disciplinary action taken for any abuses according to the company’s safety policy.

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e Business OBSERVER

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August 31, 2017

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THIS IS THE LARGEST GROUP OF JAYE MALTA INTERNS ANY BUSINESS HAS EVER ACCEPTED

HSBC Malta creating future business leaders with JAYE Malta Summer is a great time to relax and recharge, but it’s also an excellent chance for students to get work experience, and 13 promising students are doing exactly that by using their holidays to work at HSBC Bank Malta and maximising their chances of future success.

The programme comes as part of a growing partnership between HSBC and JAYE Malta and introduces the next generation of talent to the financial services industry and to HSBC. According to JAYE Malta, this is the largest intake of JAYE interns any business in Malta has ever accepted. It is also a first for HSBC, which has previously supported JAYE Malta through financial support.

“I am thrilled to have been offered the internship with HSBC at the awards night,” said Martina Grech, one of the 13 interns. “I couldn’t wait to start learning from the best global bank, and receiving hands-on experience from leading financial industry experts.”

HSBC’s relationship with JAYE Malta goes back 13 years. Between 2014 and 2016, the bank donated a total of €140,000 to the organisation. These funds have been pivotal in enabling at least 2,270 students to realise their true abilities and ambitions through JAYE Malta courses such as the StartUp Programme and the Company Programme.

“I couldn’t wait to start learning from the best global bank, and receiving hands-on experience from leading financial industry experts.” – Martina Grech, HSBC intern

e Business OBSERVER

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eSkills Malta Foundation to coordinate EU Codeweek 2017 in Malta Learning to code is a powerful way of exploring ideas and creating new solutions for work and play. European Code Week is a grassroots initiative which aims to bring coding and digital literacy to everybody in a fun and engaging way. The eSkills Malta Foundation is the Code Week National Ambassador, and coordinates these initiatives in Malta as it has done in previous years. This year Code Week is celebrating its fifth birthday. To mark this milestone this year, the code week activities will be held over two weeks, from 7 to 22 October 2017.

The EU Code Week’s main objectives are to show young people, adults and the elderly how you bring ideas to life with code, demystify the coding skills, and bring motivated people together to learn.

The attendants will take the opportunity to learn coding in a fun way. However, the Foundation this year will also be including other learning

sessions for the seasoned techies who need to learn something new. For example, a college or university could target young digital adults coding for data analytics, or coding of robots, while someone else could organise a session to build a simple website, or for kids to draw a flower using Scratch or Python. Therefore, the audience may range from children to adults of all ages, and the possibility and diversity of EU Codeweek is huge, making coding for everyone.

The initiative was launched in 2013 by the Young Advisors for the Digital Agenda Europe. In 2016, nearly a million people in more than 50 countries around the world took part in the EU Code Week. Those interested should follow us on www.eskills.org.mt; Fb: ESkillsMalta and on Twitter: @DigitalSkillsMT Carmel Cachia, Executive Coordinator, eSkills Malta Foundation

Analytics that bring high value and business agility Companies have more data available to them than ever before, but they are all struggling to figure out how to make sense of it and put it to good use.

This lends itself to a well-known statement – there is a big difference between data and information. Data is important, yes, but information is what actually moves your business. Analytics turns data into actionable information – it gives the data meaning so that you can do something with it, because businesses must have accurate and timely information to stay competitive in this constantly-evolving marketplace.

In fact, companies that manage to utilise a proper Enterprise Resource Planning (ERP) solution seem to thrive and develop further, while those that don’t usually fall behind the rest of the pack. One of the most effective ERP solutions is Acumatica – it delivers adaptable cloud and mobile technology with a unique all-inclusive user licensing model, enabling a complete, real-time view of your business anytime, anywhere.

ERP vendors and products have always provided reports and even moderate dashboard flexibility, but Acumatica will significantly extend your selfservice analytics. It all comes down to information, and getting information access to the right people at the right time. Accurate, timely, and available right now, right here – in whatever form you decide.

Learn how Acumatica can take your business to the next level.

T: 2149 0700; E: info@computimesoftware.com; W: www.computimesoftware.com/acumatica

Vivendo Hospitality finishes ten-week refurbishment project at e Victoria Hotel Located in the heart of Sliema, The Victoria Hotel has always been a specimen of classical elegance. Its directors had ambitions to cement the hotel’s status as one of Malta’s top four-star hotels for many years to come.

The Vivendo Hospitality team worked hand in hand with the directors of The Victoria Hotel from start to finish. They started with a survey of all the guest rooms involved, the assembly of a sample room and a visit to the factory in Italy to make sure all was well before production ensued. Vivendo supplied custom room furniture, bathroom and guestroom doors with a wenge finish, as requested by the client in order to maintain the hotel’s classic look.

The Victoria Hotel general manager Kevin Callus stated, “Vivendo always reacted impressively fast to ensure a quick supply of the needed items and made sure that there was no negative impact on the project progress.” The end-result surpassed Mr Callus’ expectations. “We are very happy to have chosen Vivendo for our refurbishment project. The result is exactly what we had in mind and most importantly,

the project was completed right on time, which was crucial for us.”

Vivendo Hospitality is part of the Vivendo Group portfolio of brands, which caters especially to the needs of the hospitality market in Malta. The company taps into the group’s strong capacity and experience of working on hospitality projects, including custom-made and high-end hotels.

e Business OBSERVER

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August 31, 2017

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Brexit: awareness, understanding and action

Juanita Brockdorff, Partner Tax Services, KPMG Malta

Brexit is the most historic economic division between major economies since the Second World War and most of the uncertainty shrouding this unprecedented divorce since the referendum result - 51.9 per cent in favour of Brexit and 48.1 per cent in the remain camp - revolves around the process of leaving the EU. The only certainty is that the referendum result irrevocably changed the landscape of Europe – economically, politically and culturally.

If the ongoing negotiations are anything to go by, it can safely be deduced that the long-term consequences of Brexit on businesses will take years to fully emerge. This is largely due to the mammoth task facing the UK and the EU as they engage in sobering negotiations about trade barriers and the extent of legal disentanglement. It will be no easy feat, as Brexit has created an unknown force that brings to the fore new risks and difficult decisions for companies whose supply chains and business strategies are designed for a borderless Europe.

Given that the topography is still taking shape, it is difficult to appreciate each peak and vale, much less the ultimate effect of negotiations in real terms. There seems to be a common understanding however, that a hard Brexit would likely lead to the UK losing access to the Internal Market, whereas a soft Brexit would enable the continuance of a UKEU relationship in close symbiosis to existing arrangements. The jury is still out on the pros and cons of either approach, and even though negotiations are, to some extent or other, ongoing, the business sector needs to mobilise now to discover the opportunities in Brexit. This begs the question: what can businesses do to prepare for Brexit?

In a bid to address this question, KPMG is organising a series of workshops on Brexit for the business community. The aim of these workshops is to raise awareness on potential implications, explain the intricacies and advocate strategising accord-

ingly by preparing contingency plans to ensure preparedness for Brexit eventualities.

The most vital element that reverberated throughout the first workshop was the necessity for businesses not to allow themselves to become distracted or to shy away from action: engagement is key. A ‘wait and see’ approach is strongly discouraged as inactivity would see businesses fall victim to external forces. If they are to succeed, businesses must absorb and therefore recognise achievable opportunities, such as renewing efforts to establish and nourish international relationships and ensuring adaptability and flexibility.

Brexit is an opportunity. Businesses in the UK are already relocating their operations to jurisdictions in EU countries, opening a host of opportunities for countries like Malta. A tiny EU jurisdiction renowned for its economic stability and growth, Malta is welcoming a number of multinational businesses who have set their contingency plans into motion and started moving their headquarters out of the UK. This for fear of the unknown rather than on the basis of clarity of the consequences of Brexit.

Strategically located in the middle of three continents and having established strong ties with neighbouring countries, Malta is ideally placed to host a global enterprise. Telecommunications, multilingualism, healthcare and well-oiled professional services offerings are but a few of the requisites that Malta has honed in on, in establishing itself as a financial centre and a home to large firms and an extensive expat community. The days of offshore business are long over.

Malta is at the forefront of the current transparency and compliance standards, having just led a remarkable six-month Presidency of the Council of the EU. Whatever drives your business, it would be wise to proactively devise short to medium-term strategies that not only take into account mitigating factors but also factor in sustainable growth post-Brexit.

Settling in a jurisdiction that exploits efficiencies is in your interest and partnering with experts would only mitigate inevitable bumps in the transition process.

KPMG in Malta is working closely with our colleagues and Brexperts in the UK who are assisting businesses to navigate these unchartered waters by offering realistic and sustainable tailored solutions. This partnership perfectly dovetails with our aspiration to be the trusted adviser for our clients, making us well positioned to explore and exploit opportunities for our clients’ continuing growth postBrexit.

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President Coleiro Preca launches Arraiolos Malta 2017 H.E. Marie-Louise Coleiro Preca, President of Malta, has launched the 13th annual meeting of non-executive EU Presidents, Arraiolos Malta 2017.

The 2017 Arraiolos meeting will be held in Malta during 14-15 September. It will be hosted by H.E. Marie-Louise Coleiro Preca, the first President of Malta – as well as the first female EU President – to ever attend such meetings.

The Malta meeting, the 13th forum of the Arraiolos Group, will be the biggest meeting to date. Thirteen Presidents, representing Austria, Bulgaria, Croatia, Estonia, Germany, Greece, Hungary, Italy, Latvia, Malta, Poland, Portugal and Slovenia, will be discussing the present and future of social Europe and

the management of security challenges in the EuroMediterranean area.

President Coleiro Preca said that her hope is that “through this meeting, we shall become more sensitive and aware of the particular nature of our respective situations.” She said that each and every one of the presidents “will be more resolved to play our respective parts, within the limitations of our powers, to spread a strong message of solidarity and social justice, across Europe.”

The theme chosen for this year’s Forum is Crossing Borders. The choice of this overarching theme is aimed at creating a frank and profound discussion, at a time when Europe, like the rest of the world, has become more polarised on social class and ethnic lines.

FirstUnited Insurance Brokers announce appointment of new Managing Director FirstUnited recently announced the appointment of Kevin Galea Pace as Managing Director. With full responsibility for the leadership and development of FirstUnited’s business, Mr Galea Pace will play a key role in meeting the company’s strategic vision and growth. He will also be instrumental in building on the firm’s outstanding reputation to professionals and clients from across Malta and overseas, helping them to ensure they have the best risk management and insurance arrangements in place for their business and staff.

Mr Galea Pace was a founder partner and executive director of FirstUnited in 1998, and throughout the years he has been mainly responsible for servicing corporate accounts. He brings with him a strong skill-set and an excellent reputation for relationship building and team leadership.

“Kevin’s strong knowledge and experience will be vital as we continue our ambitious plans to grow and develop solutions for our clients,” said FirstUnited Chairman, Salvino Mifsud Bonnici. “Kevin has a high profile and an excellent background in the industry spanning 35 years’ experience in

Bank of Valletta named Preferred Partner of Valletta 2018 Foundation

KEVIN GALEA PACE

insurance and managing client relationships of complex businesses.”

FirstUnited, with offices in Ta’ Xbiex, and Victoria, Gozo, provides independent insurance and risk management advice to a range of businesses across many industry sectors, whilst also offering a full range of personal insurance solutions as one of Malta’s leading providers of insurance advice, support and claims management.

Bank of Valletta has been named the Preferred Partner of Valletta 2018 Foundation, leading up to the European Capital of Culture in 2018.

The partnership was announced during a brief ceremony held at The House of The Four Winds in Valletta, addressed by BOV Chairman Deo Scerri and Valletta 2018 Foundation Chairman Jason Micallef. Also present for the occasion were Deo Debattista, Parliamentary Secretary for Consumer Protection and Valletta 2018, and Mario Mallia, Chief Executive Officer of BOV. “The bank’s link with the capital city goes beyond the adoption of the name ‘Valletta’ in ours,” said Mr Scerri. “The patronage of arts and culture, as well as significant conservation projects have been featuring prominently in

the bank’s communtiy programme for decades.” Mr Scerri also made reference to the bank’s decision to strengthen its capitalisation further by issuing a rights issue of €150 million over the coming months. “The robustness of our organisation is the enabler that permits us to come to the fore and support Valletta 2018 Foundation as it hosts the European Capital of Culture in Malta.”

“We are delighted to have BOV as our partner through this journey,” said Mr Micallef. “As we get closer to 2018, the level of interest and participation in the activities being organised continues to grow. Our close collaboration with the Government, public authorities and the private sector is aimed at prolonging the positive effect and having a long-lasting legacy for European Capital of Culture 2018 and beyond.”