SPOTLIGHT ON PROPERTY & TOURISM: Investors in upmarket SE European marinas seen reaping gains in post-crisis era

It’s a balmy August evening and you’re aboard a sailing boat, at anchor in a peaceful pine-scented bay. It could be Greece or Croatia, Turkey or Montenegro. Nautical tourism has shown a rising trend – in Croatia alone, the number of people taking sailing holidays has tripled over the last decade. And it’s not just that charter companies expanded their fleets – more and more private individuals have bought into yachts.

With a rising trend of popularity for sailing anticipated to resume after the global crisis, demand will grow again for bigger and better and marinas that offer infrastructure including water and power supply, waste disposal and vessel repairs. Beyond the basics, an appetite has been shown among yachting enthusiasts -- and developers -- for marina resorts that combine mooring with residential, commercial and leisure facilities.  

France, generally considered the most expensive and prestigious place to keep a boat in Europe, is home to 43% of berths in the Mediterranean but they cost one-and-a-half times what they would in Greece or Croatia, and double the rates in Montenegro -- a cue for luxury new marinas being planned or built in the Balkans whose potential is beginning to emerge.

Montenegro, with its mountainous coastline, stunning beaches and pretty Venetian-era harbour towns, is home to two of the largest new marina projects in the region. More than just places to tie up your boat, these state-of-the-art marina complexes will include deluxe hotels, restaurants, bars, shops and even private apartments and villas.

The idea started in Port Grimaud -- near St Tropez in France -- when architect-sailor Francois Spoerry decided he wanted to moor his boat directly in front of his house. He realised his dream, designing the world’s first marina-with-residences. That was back in the 1960’s with the model gradually spreading to Spain, and now to southeastern Europe.

PORTO MONTENEGRO STEALS THE LIMELIGHT

The most-talked-about venture is the 200-million-euro Porto Montenegro (www.portomontenegro.com) marina in Tivat, Bay of Kotor, the brainchild of Canadian tycoon Peter Munk, founder of the world’s largest gold-mining corporation, Barrick Gold (www.barrick.com). Sited on a former-Yugoslav naval base, the project will eventually comprise a 650-berth marina for vessels including mega-yachts; a five-star hotel, probably run by Four Seasons (www.fourseasons.com); and the Teuta residential complex.

British global property consultants Knight Frank (www.knightfrank.com) are the selling agents for Porto Montenegro, where a studio is expected to go for 200,000 euros, and a four-bedroom penthouse with a terrace and plunge-pool for 1.5 million euros. Each flat comes with the offer of leasing a berth in the marina at a 75% discount.

James Price of Knight Frank tells Balkans.com Business News: ”People buying into Porto Montenegro will be a mix of end-users and investors, most of the end-users will likely have a yachting connection. Interest has already come from buyers in Scandinavia, Benelux, Germany, the UK, France, Monaco, Italy and Russia; we also expect Middle Eastern demand and perhaps some US.” Regarding investment prospects, he adds: “Montenegro’s comparative value against other Med locations would suggest good latent capital growth.”

SVETI MARKO ISLAND TO BECOME MARINA RESORT

Nearby, also in the Bay of Kotor, the small green island of Sveti Marko is being developed into an integrated luxury resort worth 450 million euros. A Russian investment company, the Metropol Group (www.metropol.com), is behind the project, and the entire holiday village will be managed by Singapore-based Banyan Tree (www.banyantree.com). Due for completion in 2011, the complex is to combine a marina, a six-star hotel, villas and bungalows -- plus a helipad. British-based estate agent Savill’s (www.savills.com) is the development manager and exclusive global sales agent for Sveti Marko.

According to Savill’s Daniel von Barloewen, the kind of people interested in buying residential properties on Sveti Marko fit the following bill: “Russian HNWIs (high net worth individuals) and other HNWIs (sports and media celebrities), aged 35-55, mostly new money”. He tells Balkans.com Business News: “Over 80% of the current purchasers in Montenegro are Russian. This is due to Russia's cultural and historical affinity with Montenegro, and the perception in Russia of Montenegro as the favoured Mediterranean destination closest to Russia (the other main Russian "summer destinations" are France, Cyprus and Turkey). The other reason is that due to a low reliance on mortgages in Russia, ordinary Russians have circa €150-€350K in liquid funds available, and are keen to invest in property outside of Russia presenting good investment potential”.

PROPERTY PRICES SEEN UP 12%-17% IN 2010    

Regarding investment prospects, von Barloewen says: “Subject to market conditions, we would expect average property prices in Montenegro to increase by circa 5.0% in 2009, and by roughly 12%-17% during 2010 as major projects such as Sveti Marko Island and Porto Montenegro commence construction and sales. The main point to bear in mind is that the previous off-plan sales model died with the onslaught of the Credit Crisis. The achievable sales prices in Montenegro (as with many other countries) will depend heavily on whether local and international banks give mortgages to buyers for off-plan property purchases. As the infrastructure continues to improve and mortgage finance becomes available, we expect other nationalities to return to purchasing property in Montenegro, such as British, Belgian, Scandinavian, German.”

What’s more, James Price of Knight Frank says: “It’s certainly true that the marina development at Porto Montenegro will promote the quality and prices of the area around the Bay of Kotor, and no doubt Montenegro in general”. The same has already proven true in neighbouring Croatia, home to 56 marinas, most of which are long-established. “The marinas in Croatia have had a beneficial effect on the local market,”says André Wilding of British-based Croatia Select (www.croatiaselect.co.uk).

CYPRUS IS NEXT IN LINE.....

Another example of emerging marina and real estate projects in southeastern Europe is planned construction of the 250-million-euro Limassol Marina (www.limassolmarina.com) -- Cyprus’ first luxury facility. It will include berths for 600 boats and two man-made peninsulars with a beach and luxurious sailor houses plus villas set in gardens with dedicated yacht berths – “so you can step from your car through one door and out onto your boat through the other.” Once planning permission is obtained, property prices in the area will rise in the short or medium term.

Source: Balkans.com Business News