The developer of the Lustica Bay resort in Montenegro plans to invest a further €100mn in the luxury project within the next 18 months, bringing total investments so far to €180mn, Darren Gibson, CEO of Lustica Development, told bne IntelliNews.
In total €1.1bn will be spent on Lustica Bay over a 25-year period, making it one of the largest developments in Montenegro, whose Adriatic coast has become a popular destination for high-end mega-projects. Lustica Development’s parent company is Egyptian diversified group Orascom.
When the development is completed in 2038, it will have seven hotels, two marinas, more than 1,000 residential units and other facilities including a golf course.
Ten apartment buildings with 72 apartments have already been completed, and a total of 190 apartments, town houses and other properties have already been sold.
“As our parent company Orascom is a Swiss-Egyptian company, it is to be expected that our first clients would come from Switzerland and Egypt… Each of these countries comprises approximately 15% of our buyer pool,” Gibson said in an emailed interview.
“The natural markets for Montenegro are Russia and Serbia, as well as neighboring countries of the region, which collectively represent about 50% of the buyer pool.” Properties have also been sold to buyers from Montenegro, the UK, France, the US, Lebanon, Monaco and other countries.
Also within the first stage of the project, Lustica plans to build the Lustica Bay Marina and marina village, golf course, the first hotel (under the The Chedi brand) and the town centre with a school as well as shops and restaurants.
The marina is already close to completion with a soft launch planned for mid-2017. An additional 16 residential buildings are due to be built by the same date.
In addition to the Lustica Bay site, the firm recently took a long-term lease of the nearby Mamula fortress and Lastavica island, where it plans to build a luxury boutique hotel.
“We strongly believe in Montenegro’s bright future and that is underlined by the decision of Orascom to expand its portfolio in the country,” says Gibson.
Asked what makes Montenegro attractive for tourists, Gibson says: “Definitely its stunning natural beauty, as well as its rich history and culture.” He also believes the country’s small size – it has an area of just 13,813 square km and a population of slightly over 610,000 – is an advantage, “meaning that visitors can enjoy a diverse range of experiences within just a few hours’ drive.”
The Montenegrin government is keen to take advantage of this and boost the economy by attracting more tourists. It hopes that tourism will account for 30% of GDP by 2024.
Gibson points out that not only is Podgorica’s official policy to develop higher-end tourism, but “certainly that has been the focus of the major foreign investors in Montenegro, including ourselves”, in particular in the Boka Bay region, “which is positioning itself to capture that niche market”.
Its main regional competitor is Croatia, but Gibson hopes that bringing in numerous high-end hospitality brands will give it the edge over its neighbour. He believes this makes Montenegro “an emerging competitor to destinations in Spain, France and Italy”.
Revenue from tourism in Montenegro is expected to exceed €850mn this year, up from €800mn in 2015, according to estimations from the economy and tourism ministries.
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