Valletta confronts numerous challenges concerning preservation and development, particularly given its limited size and high population density. While some locals welcome the increased diversity and economic benefits that come with investment, others are concerned about the impact on the local culture and community, rising property prices and the future of local residents.
This makes accommodating any new projects without the risk of adversely affecting the city’s historical character challenging. It is, therefore, reasonable to expect that any discourse on additional development in Malta’s capital will automatically trigger a debate.
Individuals hold a strong emotional attachment to the city’s past, are concerned about the present and are even more apprehensive about the future of this cherished UNESCO World Heritage site. Luckily, it is not all bad news, as a lot of the properties in the capital are being rescued by eager investors with many of these homes being used as primary residences.
The city’s infrastructure and services are continuously strained by the influx of tourists, prompting Valletta to implement measures to balance preservation and development. To ensure that new constructions are in harmony with the city’s historic architecture, strict building codes and zoning regulations are in place. Additionally, new sustainability initiatives, such as pedestrianisation and promoting cycling, aim to reduce the impact of chaotic transportation on the city’s streets.
Instead of accommodating new projects, the government could focus on the numerous derelict and abandoned properties scattered throughout Valletta. Owners of these properties should be encouraged to promote the restoration of such properties, with the aim of encouraging their use for habitation or rental, resale and development. Grants or other incentives should be offered to owners, or one could also introduce private investors, a local NGO or another government entity that is entrusted with rehabilitating the building for public use, such as museums, boutique hotels or commercial purposes.
A good example would be Evans Building at the tip of Valletta which has been earmarked by the government for hotel development which will also require the retention of the building’s outer shell and archaeological investigation and restoration of the buried structures underneath.
It should be noted that the cost of converting property in general has been on the rise and when dealing with older properties, these costs tend to be particularly higher. On average, renovation costs for properties in Valletta range from €1,000 to €1,500 per square metre, including both materials and labour expenses.
However, this estimate can vary significantly depending on various factors, such as the size of the property, the extent and complexity of the renovation required, and the quality of materials used. In addition, the limited accessibility, restrictions and regulations, as well as the scarcity of qualified tradesmen licensed to carry out work in Valletta, all contribute to the overall costs of renovation.
Entertainment activity is another presssing challenge
The issue of vacant properties is not unique to Valletta, but also affects other areas surrounding the capital, such as Floriana, Marsa, Ħamrun, and Pietà. Despite an increase in the number of property transactions in 2022, with a total of 856 properties finalised in these locations, there are still many vacant and derelict properties in these areas.
The issue of entertainment activity in Valletta is another pressing challenge for further interest in residential development. The city has grown into a vibrant entertainment destination, drawing tourists and locals alike to its bars, restaurants and nightlife. However, this has also brought with it a range of problems, including coping with the noise and disturbance levels that come with the city’s nightlife.
In addition to the noise, there is also the issue of refuse removal. The city’s thriving bar and restaurant scenes have led to a huge problem with mismanagement of refuse removal. The situation is further complicated by the crowds that flock to the capital year-round for a wide variety of cultural events and festivals, concerts, exhibitions and performances.
As a result, even the most tolerant of local residents are feeling the strain. They are concerned about the impact that this increased entertainment activity is having on the city’s historical character and are worried about the future of their beloved city. There are calls for better management of refuse removal and noise levels, as well as more consideration for local residents in the planning and implementation of new projects.
These issues will need to be addressed if Valletta is to continue to thrive as both an entertainment destination and a residential area.
As Valletta offers a unique and authentic Maltese experience, there has been a rise in vacation rentals: the city offers visitors a more personalised and immersive experience compared to staying in a hotel elsewhere on the island. Many of the properties available for rent are indeed located in historic buildings that have been renovated and modernised while preserving |their charm. This offers visitors practicality, convenience and accessibility to all the main attractions, shops, restaurants and cafés, making Valletta ideal for tourism.
With inflation getting the better of us, our purchasing power is diminishing and is diminishing fast. Investors across the board are purchasing tangible assets such as real estate as a hedge against inflation which often increases in value as inflation increases. Malta’s real estate has a staunch ability to weather economic pressures and to emerge with its value intact, even at times very much improved!
Currently, efforts to enhance the capital are being undertaken in a collaborative and concerted approach, rather than individual entities working independently. This approach aims to stimulate social revitalisation and further encourage more people to physically live in Valletta. Countering the decline in figures in the last decade, and up to now, this has been a huge success.
With numerous properties in desperate need of saving and upgrading, there’s still a lot that needs to be done. Part of the process of safeguarding Valletta’s heritage is making sure that any of the new owners get the necessary assistance from the government on their future journey as custodians of Malta’s precious past.
In conclusion, despite the many challenges facing Valletta, it remains a promising property investment choice. The city’s unique blend of historic and modern architecture, vibrant culture and cosmopolitan lifestyle continue to draw both locals and foreigners to the area.
Moreover, while renovation costs are considerable, the potential for appreciation and rental income makes investing in property in the area a worthwhile venture. Property investors still expect to yield attractive returns if they can secure properties at the right price and carry out renovations effectively.
With the right approach and investment strategy, investors can capitalise on the city’s rich history and vibrant future to yield attractive returns on their investments.
Edward Micallef is manager at Frank Salt Real Estate’s Balzan branch.