South East Europes Ultra Prime Real Estate Boom

South-east Europe's ultra prime real estate boom

A recent report on global prime residential real estate suggests that the continued growth in numbers of Ultra High Net Worth Individuals (UHNWIs) has fuelled a demand for ultra-prime residential properties in capital cities.

While Montenegro may not have the profile or property portfolio of an international hub, this small Balkan country is undergoing what is widely regarded as a waterfront hotel and real estate boom that is currently unparalleled in Europe.

Committed foreign direct investment (FDI) is now at over EUR 2.5bn euro and the likes of Porto Montenegro, Qatari Diar, Aman Resorts, Orascom and Azmont Investments-One & Only Resorts are staking their reputations on attracting more of the world’s 190,000 UHNWIs to this unspoilt coastline over coming years.

To place this conspicuously high level of activity in perspective, Montenegro’s real-estate sector first began to show signs of promise at the turn of the millennium, some six years prior to independence from Serbia. Due to historic cultural ties, frequent flight connections and the absence of visa restrictions, many of those early property buyers came from Russia, with adventurous British investors following closely behind. Today, visitors and investors alike come from all over Europe and beyond, but it was those two pioneering countries that helped fuel the early upswing.

In terms of price, the meteoric upward trend has inevitably slowed as the market has matured yet there remains plenty of value left in the market for savvy investors, especially cash rich buyers; in short, it is still a sensible time to invest, with enticing growth prospects in the prime real estate sector especially.

Porto Montenegro was the first luxury coastal development out of the blocks and remains the only project in the Boka Bay to have welcomed residents into their homes. To date, over 130 residences have been built and sold, with another 100 currently under construction. Average prices per square metre are currently around EUR 7000 in the residential buildings and EUR 8000 in the Regent hotel residences opening in summer 2014.

A pleasing combination of vernacular design, extensive on-site services and amenities, as well as a waterfront location within a superyacht marina all add to the project’s desirability. A further sign of pent-up demand is the rental market with weekly high-season rates in the village ranging from EUR 1000 for a studio to EUR 9,950 for a 3-bedroom apartment.

The next chapter in the Porto Montenegro story will be the opening of the Regent Porto Montenegro Hotel & Residences in July 2014, due to set new standards for the region in design, facilities and 5-star service. With average annual room revenue in Montenegro predicted to grow by 20% in 2014 according to a recent report by Horwarth; the Regent Hotel’s rental pool program is also predicted to achieve strong yields, making it an innovative new investment format for the region.

Completing the project’s current development activity is the Ksenija building, due for delivery by summer 2015 with forecasted rental yields of 5.1%. Featuring several uniquely formatted apartments such as the 4-bed tower residence, customisation options are available upon request. Other UHNWI-friendly features include unobstructed sea and mountain views, private rooftop plunge pools and a new helipad in the Village.

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