There was a time not too long ago when Montenegro was in the news for all the wrong reasons. As part of the former Yugoslavia, it was heavily involved in the Balkan conflict of the 1990s before declaring full independence in 2006. The tiny nation of just over 500,000, with its capital at Podgorica, also the largest city, is divided into 22 municipalities, with prime locations on the coast: secluded Kotor, Budva and its Riviera, nautical hotspot Tivat and intensely historical Bar. Like Vietnam, Cambodia and its neighbour Croatia, Montenegro is leaving its gruesome history firmly behind it and emerging as a desirable holiday destination. And if you’re an investor with a boat, all the better.
Stephan Kohl, executive director of Engel & Völkers Yachting agrees. “Montenegro developed over the last few years as highly attractive for real estate investments especially on their beautiful coastline. It’s not only second home apartments but also very exclusive marina and golf resort developments who are pushed forward by big international investment groups.”
Architecturally astounding and climatically moderate, Montenegro could be in one of the most enviable spots in Europe. Just across the Adriatic Sea from Italy and easily accessed from Europe, it connects just as efficiently from the Middle East. With a steadily growing economy rooted in service industries, Montenegro is one of the few Balkan nations to be on an increasing foreign investment curve, largely on the strength of its rising tourism status and the government’s concerted efforts to transform the country into an elite tourist destination.
“Montenegro is certainly an emerging investment and second-home market. Eastern Europeans and Russians have already identified it as a place for investment, especially around Budva, Kotor and Sveti Stefan,” notes Chris Liem, principal and owner of Engel & Völkers in Hong Kong. “Underpinning the market growth is Montenegro’s positioning as another Monaco, a high-value tourist destination. Additionally, compared to its more developed Adriatic rival, Croatia, Montenegro’s prices are cheaper and offer good value.”
And the new marina, Porto Montenegro, is an enormous factor in the country’s success. “Montenegro remains an emerging market, though the rapid progress and the success of Porto Montenegro has put it firmly on the real estate map,” begins Partner – Head of International Residential Development James Price at Knight Frank in London. “This project has been based on the provision of large berths, so it remains to be seen how more traditional mixed resorts will fair, but there do appear to a number of global players working on projects in the region.” Leveraging the country’s pristine coastline, the landmark Porto Montenegro generated buzz quickly. The super yacht marina on the Bay of Kotor is the first highend facility of its kind on the Adriatic and it marked the unofficial start to Montenegro’s niche appeal.
Among some of the projects looming on the horizon is Kerzner International’s just announced One&Only Resort at Kumbor, overlooking Tivat Bay. Co-developed by Triangle Development the project will ultimately comprise 150 guest rooms and villas in its hotel segment, a residential component as well as the ace in the hole, another world-class marina. The resort will be less than an hour from Dubrovnik right on the Adriatic coast. Kerzner was behind the massive Atlantis Paradise Island project in the Bahamas and The Palm, Dubai. The developer’s One&Only luxury resort brand currently operates in the Maldives, Mauritius, Cape Town and Mexico among others, and Montenegro will represent the company’s first foray into Europe. “Montenegro is a perfect location for the first One&Only experience in Europe. The location is remarkable and I am very confident the resort will be well received by our many loyal One&Only guests and new guests alike,” said Sol Kerzner, chair of Kerzner International in a statement. Though it’s still early in the planning stages, Kerzner’s interest hints that major operators with similar high end product are considering moving in.
The Long Run
So what’s going to attract investors for the long run, and why? “The critical mass brought by a number of projects should see investment into Montenegro broaden; while the pricing at Porto Montenegro now reflects its maturing status and is on par with many Western European destinations, most [investors] will still be driven by the prospect of capital growth,” Price theorises.
Of course, Europe’s currency woes remain a dark cloud. Liem admits that holiday homes are the first to go when balance sheets get consolidated, but there’s a silver lining in opportunities for strong investments. Kohl points out that Porto Montenegro offers tax-free fuel, and, “This detailed tax advantage increases the willingness of foreign investments. Having the Euro as their official currency, the country is part of a huge financial market even in times of economical difficulties.” And non-EU membership means similar tax structures as Monaco and Switzerland. And if that weren’t enough to recommend it, Kohl believes Montenegro is a safe haven despite Europe’s current difficulties. As the nautical types say, it may be time to cast off.