The biggest development in Montenegro recently witnessed the opening of its first 5-star hotel – The Chedi Luštica Bay.

The hotel in Luštica Bay, a 690-hectare site in the south of Montenegro, represents an important step forward in the master plan of the €1.1billion resort.

The creation of Luštica Bay – which is a joint venture between Orascom Development Ltd. (90%) and the government of Montenegro (10%) – forms a part of the government’s wider aim to position Montenegro as an attractive luxury destination for tourists and property buyers alike.

The Chedi, which will be one of the largest hotels in the Boka Bay area, overlooks a 176-berth marina with views of the Adriatic Sea and beyond. Fine dining, cafés/bars and a wide range of shops will be on offer to residents and tourists.

Once completed, Luštica Bay itself will feature attractive town squares, a market and parks, while those looking to stay for a longer period of time will appreciate the plans for a school and clinic.

Property buyers will have the opportunity to choose from apartments, condos, townhouses and villas with prices ranging from €2,700 to €6,500 per square metre.

“The opening of The Chedi Hotel Luštica Bay is testament to the strong financial backing and confidence in our country by the international developer Orascom,” Milos Radmilovic, founder of property specialist IM Property Group, said.

“Since 2006, corporate investors have been teaming up with the Government to create attractive holiday and second home destinations in the coastal region. Luštica Bay is one of many resorts that are in the pipeline.”

Luštica Bay will hope to follow in the footsteps of the resort of Porto Montenegro, which was purchased in 2006 by a group of investors led by Peter Munk, the Canadian gold magnate. The resort was transformed into the ultimate luxury destination, featuring a marina for superyachts, an international boarding school, a five-star hotel and shops and restaurants. 

Porto Montenegro was eventually purchased by the Investment Corporation of Dubai in 2016 for an undisclosed sum. All 290 apartments have sold out and prices have more than doubled since the initial launch of the project.

In addition, there is Portonovi, a well-respected resort in the Bay of Kotor. The brainchild of Azmont Investments, which is backed by a consortium of Azerbaijani Investment Holding companies, the €830 million resort is set to launch its first phase in the spring of next year with the plan of attracting the super-rich and their superyachts, as well as the wider tourism market.

Attempts to lure the tourists in are no surprise when you consider tourism now accounts for 20% of Montenegro’s GDP, up by 9% since 2017.

To meet this rising demand, the government plans to add 100,000 new beds to Montenegro’s coastal areas by 2020.

“We expect the growth of Montenegro’s tourism and resort industry to have a very positive impact on property prices,” Radmilovic added.

“Low interest rates of 4% and the availability of mortgages up to 50% of property value have increased buyer interest.”

The country attracts both corporate investors – often from the Middle East, Russia and China, who are attracted by Montenegro’s foreign-trade laws and its favourable tax exemptions – and private property investors, who are lured in by Montenegro’s pending EU membership.

Along with Serbia, it hopes to join the EU as early as 2025. In preparation for this, the government has already adopted the euro as its sole legal tender.

Previously Property Investor Today looked at how Montenegro’s property market had boomed as a result of NATO membership, and the government will be hoping the prospect of EU membership will have a similar impact in the coming years.