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Development of Luxury Real Estate Market in Montenegro – Investments Worth Billions of Euros From the Sea to the North
Source: eKapija
Thursday, 27.10.2022.
03:46
Thursday, 27.10.2022.
03:46
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Porto Montenegro (Photo: Pixabay.com/falco)
This is especially evident in Montenegro. The development of this segment started over 15 years ago when foreigners first discovered Montenegro and its investment potential. Today, the projects developing along the Montenegrin coast are worth billions of euros, the interest in investments is still strong and north Montenegro is slowly becoming the center of attention.
Despite the crisis cause by the coronavirus epidemic in the past two years, followed by the Ukraine war, investments in the real estate sector have increased significantly. Namely, the total inflow of foreign direct investments in the January-July period in 2022 was EUR 653.47 million which is a 44.53% growth compared to the same period last year. According to the data of The Central Bank of Montenegro, out of that amount, EUR 238.3 million was invested in real estate, an increase of 100.25% compared to the same period last year.The biggest property investments in the first eight months came from Germans – EUR 39.55 million, followed by Russians with EUR 31.87 millions invested and Serbians invested EUR 28.49 million.
Strong growth and market potential were recognized by the global leader in the luxury real estate market, Sotheby`s Realty, so they opened a branch office in Montenegro too.
As Niko Lakovic, partner and the managing director at the Montenegrin office of Sotheby’s Realty said recently in an interview for eKapija, despite all the crises, the luxury real estate market in Montenegro is stable.
– The market is currently very strong and we expect a good trend in the future as well. The interest in Montenegro is taking on the form of a mature market, the trend of interest is stable and when it comes to projects, I can see that Montenegro is gaining the kind of value that it is supposed to have, Lakovic told our portal.
The CEO at CMM Investment Consulting Group, Natasa Grdinic agrees with him.
– Investors` interest in Montenegro has been steadily growing in the pas years and the world-wide crisis has resulted in increased interest in purchase of real estate across Montenegro. Construction and tourism are currently the most developed industries here, as well as the most accessible for investments, which also makes them the most popular, Grdinic said.
Portonovi (Photo: Unsplash/Dragan Bespaljko)
How did it all start?
The development of the luxury real estate market started in 2005. Investors from Great Britain first showed interest in the market, then the valuable investments from Russia started coming. The turning point in the development of the luxury real estate market in Montenegro is the construction of Porto Montenegro complex which has completely changed the image of Montenegro as an attractive destination with its marina, real estate offer, hotel occupancy and multiple brands.
This project was only the first in many, and soon the realization of new investments started. Now, tourist towns along the coastline, Lustica Bay, Portonovi and Dukley Gardens are being successfully developed, the start of construction of Bigova Bay is expected as well as the arrival of new luxury hotel brands.
According to the data the Montenegrin government got from investors, by the end of 2021 the investments of priority projects developing on the coast amounted to EUR 2.07 billion, out of which the most money went into Tivat municipality where around EUR 1.18 billion was invested. Herceg Novi is next where projects worth EUR 855.24 million are being realized, followed by Ulcinj with EUR 24 million and Budva with 11.7 million,
In addition to investing in residential complexes, investors have shown interest in another kind of real estate – historical palaces in Boka, luxury villas by the seaside and apartments within branded hotels. They are ready to invest over EUR 10 million in these properties.
The development of the luxury real estate market started in 2005. Investors from Great Britain first showed interest in the market, then the valuable investments from Russia started coming. The turning point in the development of the luxury real estate market in Montenegro is the construction of Porto Montenegro complex which has completely changed the image of Montenegro as an attractive destination with its marina, real estate offer, hotel occupancy and multiple brands.
This project was only the first in many, and soon the realization of new investments started. Now, tourist towns along the coastline, Lustica Bay, Portonovi and Dukley Gardens are being successfully developed, the start of construction of Bigova Bay is expected as well as the arrival of new luxury hotel brands.
According to the data the Montenegrin government got from investors, by the end of 2021 the investments of priority projects developing on the coast amounted to EUR 2.07 billion, out of which the most money went into Tivat municipality where around EUR 1.18 billion was invested. Herceg Novi is next where projects worth EUR 855.24 million are being realized, followed by Ulcinj with EUR 24 million and Budva with 11.7 million,
In addition to investing in residential complexes, investors have shown interest in another kind of real estate – historical palaces in Boka, luxury villas by the seaside and apartments within branded hotels. They are ready to invest over EUR 10 million in these properties.
(Photo: Unsplash/Nikola Vu)
Trends in construction industry
The construction of condo hotels, condominiums, villas and apartment buildings is gaining in popularity and beside the features intended for tourism, they also offer accommodation units for sale. This is the new trend in construction industry when it comes to real estate in Montenegro and the entire region and it comes from the fact that purchasers of luxury real estate want the whole package – a good location, quality and service.
– And they would gladly pay for it. They want to buy something that they will enjoy and that they will not have to worry about much. Space has become very important during Covid, the accessibility of the location, the nearby services, but also energy efficiency and the integration of the facility into the environment. Due to this, I believe that condominium projects have a bright future, because people value their time, Oliver Szocs, an independent property consultant said at REBEC.
Slavica Milic, the senior marketing manager at Porto Montenegro is of the same opinion and as she pointed out at the conference, buyers of luxury real estate look for an extraordinary experience, which needs to be created, because it also builds the destination and the product itself.
– Three trends are current at the moment which have to do with purchasing luxury real estate: lifestyle, investments and wellness, that is, our real estate needs to be something more, it needs to be our place for living, working and enjoying ourselves, for sports – she said.
Niko Lakovic also thinks that people are losing enthusiasm for the purchase of real estate where there is no kind of service at all.
– Those kinds of projects are becoming a thing of the past, and everybody who builds in the future will have to make facilities with features, a reception desk, maintenance, pools, a gym. People are aware of the advantages of living by the seaside, especially in resorts, and I am quite convinced that, in the future, there will be fewer and fewer traditional buildings and increasingly more settlements and resorts with additional features. It is simply a trend that all investors will have to follow, Lakovic recently told eKapija.
These are the kind of projects also developed by CMM Investment Consulting Group.
– All our projects are closed-type resorts with plenty of additional features such as outdoor and indoor pools, conference halls, spa zone with a sauna, Turkish bath, a salt room, children`s play rooms and relaxing-yoga zone, said Natasa Grdinic.
The construction of condo hotels, condominiums, villas and apartment buildings is gaining in popularity and beside the features intended for tourism, they also offer accommodation units for sale. This is the new trend in construction industry when it comes to real estate in Montenegro and the entire region and it comes from the fact that purchasers of luxury real estate want the whole package – a good location, quality and service.
– And they would gladly pay for it. They want to buy something that they will enjoy and that they will not have to worry about much. Space has become very important during Covid, the accessibility of the location, the nearby services, but also energy efficiency and the integration of the facility into the environment. Due to this, I believe that condominium projects have a bright future, because people value their time, Oliver Szocs, an independent property consultant said at REBEC.
Slavica Milic, the senior marketing manager at Porto Montenegro is of the same opinion and as she pointed out at the conference, buyers of luxury real estate look for an extraordinary experience, which needs to be created, because it also builds the destination and the product itself.
– Three trends are current at the moment which have to do with purchasing luxury real estate: lifestyle, investments and wellness, that is, our real estate needs to be something more, it needs to be our place for living, working and enjoying ourselves, for sports – she said.
Niko Lakovic also thinks that people are losing enthusiasm for the purchase of real estate where there is no kind of service at all.
– Those kinds of projects are becoming a thing of the past, and everybody who builds in the future will have to make facilities with features, a reception desk, maintenance, pools, a gym. People are aware of the advantages of living by the seaside, especially in resorts, and I am quite convinced that, in the future, there will be fewer and fewer traditional buildings and increasingly more settlements and resorts with additional features. It is simply a trend that all investors will have to follow, Lakovic recently told eKapija.
These are the kind of projects also developed by CMM Investment Consulting Group.
– All our projects are closed-type resorts with plenty of additional features such as outdoor and indoor pools, conference halls, spa zone with a sauna, Turkish bath, a salt room, children`s play rooms and relaxing-yoga zone, said Natasa Grdinic.
Swissotel Kolasin K16 (Photo: Vlada Crne Gore/Studio Synthesis architecture & design)
Golden passports have brought investor to the north
In addition to the seaside, the construction of condo hotels, apartment and residential-office buildings has been intense in the north Montenegro too. This is the result of economic citizenship project which was launched in 2019 and has, up until now, brought EUR 310 million to Montenegro, according to he recent data of the Montenegrin Investment Promotion Agency.
There were 779 applications for citizenship in total out of which 168 were approved, 73 were denied and the rest were being processed. Thanks to the program, 14 hotel complexes are being built, eight of which are in north Montenegro. Seven hotels will be built in Kolasin, one in Zabljak and two each in Budva, Tivat and Bar. With the latest two projects that the Government added to the list last week, the amount of investments in these hotels should exceed EUR 400 million for the capacity of over 2,500 accommodation units.
– The project of economic citizenship had plenty of positive effects, so the construction of luxury resorts started in places where, if it hadn’t been for that, those hotels would probably never have been built, or it would have taken years for the investments to be realized and developed. This project has truly brought new value to Montenegro as a destination and thanks to it, brands such as Swiss Hotel, Westin, IHG are coming to the north. Aman is coming to Zabljak, and the construction of Hotel Chedi is planned as well , Niko Lakovic told eKapija.
Despite investments and opening of new jobs the project hasn`t gained the approval of the EU so it will end on December 31. That`s why Henley and Partners Montenegro which has submitted 344 economic citizenship application in Montenegro in the past few years has recently published the reasons why this project should be extended.
– The total effect of submitted applications so far is EUR 320 million, which is significant in and of itslef and shows the great potential of the program. If the planned, full potential of the program were to be realized it the realistic estimate is that it could generate over a billion euros of investments and revenue in a relatively short period. Since the program was initially designed to fill a quota of 2,000 applications, it`s logical to ask yourself is it smart at this moment to cut such a program that works and that cannot be replaced with other sources of finance, the company stated.
Dragana Obradovic
In addition to the seaside, the construction of condo hotels, apartment and residential-office buildings has been intense in the north Montenegro too. This is the result of economic citizenship project which was launched in 2019 and has, up until now, brought EUR 310 million to Montenegro, according to he recent data of the Montenegrin Investment Promotion Agency.
There were 779 applications for citizenship in total out of which 168 were approved, 73 were denied and the rest were being processed. Thanks to the program, 14 hotel complexes are being built, eight of which are in north Montenegro. Seven hotels will be built in Kolasin, one in Zabljak and two each in Budva, Tivat and Bar. With the latest two projects that the Government added to the list last week, the amount of investments in these hotels should exceed EUR 400 million for the capacity of over 2,500 accommodation units.
– The project of economic citizenship had plenty of positive effects, so the construction of luxury resorts started in places where, if it hadn’t been for that, those hotels would probably never have been built, or it would have taken years for the investments to be realized and developed. This project has truly brought new value to Montenegro as a destination and thanks to it, brands such as Swiss Hotel, Westin, IHG are coming to the north. Aman is coming to Zabljak, and the construction of Hotel Chedi is planned as well , Niko Lakovic told eKapija.
Despite investments and opening of new jobs the project hasn`t gained the approval of the EU so it will end on December 31. That`s why Henley and Partners Montenegro which has submitted 344 economic citizenship application in Montenegro in the past few years has recently published the reasons why this project should be extended.
– The total effect of submitted applications so far is EUR 320 million, which is significant in and of itslef and shows the great potential of the program. If the planned, full potential of the program were to be realized it the realistic estimate is that it could generate over a billion euros of investments and revenue in a relatively short period. Since the program was initially designed to fill a quota of 2,000 applications, it`s logical to ask yourself is it smart at this moment to cut such a program that works and that cannot be replaced with other sources of finance, the company stated.
Dragana Obradovic
Companies:
CMM Investment Consulting Group d.o.o. Budva
Centralna banka Crne Gore
Agencija za investicije
Vlada Crne Gore
Tags:
CMM Investment Consulting Group
Sothebys Realty
Montenegro Sothebys Realty
Henley and Partners
Central Bank of Montenegro
CBCG
Lustica Bay
Portonovi
Dukley Gardens
Bigova BayGoverent of Montenegro
Montenegrin Investment Promotion Agency
Swiss hotel
Westin
IHG
Aman
Chedi
Niko Lakovic
Nataša Grdinic
Oliver Szocs
Slavica Milic
REBEC
real estate
luxury real estate
luxury real estate market
economic citizenship
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