Montenegro Real Estate Market: Overview. Trends. Project
In the past, when Montenegro was talked about as a luxury tourist destination, everyone had Sveti Stefan in mind, and it remained a jewel within the tourist offer of Montenegro. Today, however, numerous projects which have raised the offer of Montenegro to a new level are being developed throughout the country and the interest of foreign investors has been constant for more than a decade and a half now.
As Niko Laković, Partner and Managing Director at the Montenegrin office of Sotheby’s Realty, said, it had all started in 2005, when foreigners first discovered Montenegro and its investment potential. Montenegro became even more attractive thanks to the investment-friendly policy and the adoption of laws that facilitated and simplified investing in Montenegro to the greatest extent and enabled investors to buy real estate in their name, the opening of a company in only several days, etc. More than 15 years later, the interest in investments is still strong and it could be said that we have a competitive market now. People appreciate life in resorts more and more and all the benefits it offers, and according to Laković, it is becoming a trend to which all investors will have to adapt in the future.
Niko Laković recognized the opportunities offered by the real estate market, especially of the luxury one when he returned from London where he had studied. After working for two big investment companies, Pluto Developments and Black Mountain Development, at the end of 2009, he decided to open the Luxury Homes company and launch the portal Nekretnina.me, which quickly became one of the leading real estate websites in Montenegro and in the region.
– On our portal, we were among the first to introduce the standard of having exclusively professional photographs of the advertised real estate. We had also recognized a market gap and introduced very expensive real estate in our portfolio too, which was not the case elsewhere. Apart from us, there were very few agencies selling facilities the value of which exceeded EUR 5 million. We started investing in marketing at a larger scale and increased the presence through regional magazines, publications and websites, but we also started visiting international fairs – Laković says.
They also soon established cooperation with Porto Montenegro and it is precisely that project that he sees as the turning point in the development of the luxury real estate market in Montenegro.
– Successful development of our portal Nekretnina.me, as well as the continuous results we have achieved in our cooperation with Porto Montenegro, made me think about how we could do something more, and make some better connections with the world because we had already set up a standard in the region. I felt that a strong name should appear in the market and raise the bar even higher and position Montenegro as a destination even better – our interviewee says.
That is how the famous Sotheby’s arrived in Montenegro.
– When I thought about who could come to the market, the options were Sotheby’s, Christie’s, or Knight Frank. Eventually, the choice was Sotheby’s International Realty since I have strong ties with Britain and I know their business standards. Also, as luck would have it, I met my current partner, Hunter Milborne, who is a Sotheby’s veteran and a man who has sold real estate worth billions. We decided to establish a partnership and we opened Montenegro Sotheby’s Realty in July 2020.
The arrival of a brand like Sotheby’s gave additional value to the market of Montenegro, as well as significant exposure to the world. When asked how he managed to bring this global leader in the luxury real estate market, Laković said that it was primarily the successful development of Porto Montenegro that was to be thanked for it, and then other high-end projects which were also implemented in Montenegro.
– In our company, in our relations with our clients, we foster a truly professional approach. Everything functions as if you were at any other office within the group, in London or New York. For each client, for each sale, we fight as much as we can and we try to have every purchaser satisfied with the price they’ve achieved, but also with their life in the settlement. We belong to a network of 75 countries that has 25,000 agents, our real estate is promoted through the strongest global media and we are trying to send an image of a different Montenegro every day in the world.
He adds that an office was also opened in Belgrade, Kadena Sotheby’s, which has a franchise in Serbia.
– The office in Serbia is run by serious professionals from the fields of real estate and hotel management, Nikola Nedeljković and Živorad Vasić. I truly believe that, together with the offices in Split and Belgrade, we will very soon become the main force in the former Yugoslav market when it comes to luxury real estate.
It will be so is also shown by the fact that the Montenegrin office has also received significant acknowledgments. The panel of judges for the International Property Awards gave the acknowledgment in the category Best Real Estate Agency in Montenegro for 2021/2022 and all 5* to Montenegro Sotheby’s Realty. Also, the website www.sothebysrealty.me was pronounced the best in the category Real Estate Agency Web Page.
Development initiated by the British, continued by Russians
Talking about the development of the real estate market in Montenegro, our interviewee said that, until 2005, it was mostly the region that was interested in the country. Then, there was a turning point and first, the British came, and then the Russians.
– The British are always the vanguard of other investors, they have it in their DNA. After they had opened the market, they started selling real estate to Russians, who started coming to Montenegro in droves at the time. Like us, Russians are emotional buyers. When they like something, they don’t ask how much it costs. Over time, this increased the value of the real estate. The potentials of Montenegro were then also recognized by the people who founded Porto Montenegro. They bought the old navy base Arsenal and made a phenomenal resort for mega yachts. They started the construction in 2006, the first building was ready in 2009, and today, only 40% of the total area has been developed. Around 400 units were built, and they brought luxury brands like Dior, Dolce & Gabbana, Rolex… For example, Dior has achieved excellent results in Montenegro and pulled in other brands from their group. Next year, we expect the arrival of some more, very important world-famous names, which have not been that present in the region so far – Laković says.
As he points out, Porto Montenegro plans to develop as a year-round destination, so the construction of the Boka Place settlement, within which another hotel is being built, is well underway.
– It will have 150 units and operate within One&Only group. The settlement will also have a small shopping mall of 55 units, where medium-class brands will arrive, as well as a cinema, a gym of 1,000 m2, an Olympic-size pool… everything that will ensure interesting features throughout the year for guests to enjoy – Laković says.
In addition to that, Porto plans to develop new projects, which will considerably improve the resort’s offer.
– The continuation of the development of the complex will be on an even higher level. The next project will be called Synchro. It will have five plus stars, run by one of the world-famous operators, it will have condo units, but also its own beach – reveals Mr. Laković.
When it comes to the development of other projects, Laković also highlights Luštica Bay and Portonovi.
– Luštica Bay is developing in a very good direction – they’ve started building a golf course with 18 holes and it will be the first such project in the region that will have several hundred high-end residential units at the golf course. The residential part is being expanded as well, properties in various development zones are selling fast and the inventory is always low, so clients who are interested are often on a waiting list. On the other hand, Portonovi raised Montenegro as a destination on another level through the One&Only brand. The project lives, and functions, they have a nice marina, their own beach, high-quality residential units, and the retail offer is increasing too – Laković says.
He also mentions the residential project Dukley Gardens, which has luxury apartments, high-class features, as well as beaches that operate under the Nikki Beach brand.
– A second part of the Nikki Beach resort is opening in Kaluđerovina, and in Smokvica in Reževići, the construction of a settlement which will be managed by the world’s hotel operator Rosewood is beginning. The construction of the first Marriott hotel near the old town in Kotor has already begun, and it will be the first Marriott in Boka, with 150 hotel rooms. Kotor doesn’t have enough hotels, so it’s a good thing that the construction of Fjord is expected to start soon. In Budva, two hotels are being built on Slovenska Plaža, Intercontinental in Čanj, Iberostar in Sutomore… The implementation of another serious investment is beginning in Ulcinj, so a modern hotel complex will be built in the location of the former Galeb – Laković says.
In addition to the seaside, thanks to the project of economic citizenship, serious investments are realized in the north of Montenegro as well, primarily in Kolašin.
– Six or seven hotels are being built in Kolašin, so brands such as Swiss Hotel, Westin, IHG are coming to the north. Aman is coming to Žabljak and the construction of Hotel Chedi is planned as well. The project of economic citizenship had plenty of positive effects, so the construction of luxury resorts in places where, if it hadn’t been for that, those hotels would probably never have been built, or it would have taken years for the investments to be realized and developed. This project has truly brought new value to Montenegro as a destination – our interviewee says.
He points out that there’s a wrong perception in the public that criminals are buying real estate through the economic citizenship program, which cannot be true at all.
– All the applications for citizenship are subject to the strict control of a specialized due diligence company from Canada, so no one with criminal background can pass that check. The people to whom we have sold units for passports come mostly from Europe, America, Canada, there’s a certain number of Russians, the Lebanese… The program will most probably end on December 31 under the pressure of the EU, but it has already produced results. A significant number of real estate properties have been sold and plenty of projects have been launched. The interest in the program is still very strong and my estimate is that the majority of units will be sold by the end of the year – Laković says.
Luxury villas and palaces from the 17th century
In addition to the real estate offered within luxury resorts, Montenegro Sotheby’s Realty has rare jewels along the entire Montenegrin coast in its portfolio, which are meant for those who have true knowledge about real estate.
– I would highlight the phenomenal palaces from the 17th and 18th centuries throughout Boka – the palaces Tripković, Zmajević, Mrša… Those are all trophy properties that have their own character and history, their own story and authenticity. We offer sophisticated penthouses owned by world-famous families, but also signature apartments within branded hotels. Montenegro Sotheby’s has in its portfolio One&Only villas, which are unique, located right next to the sea, and are run by the operator of such a level and class. We are also mandated for attractive land plots at the seaside, but also some exclusive properties which have several houses for the owners and guests, whose value exceeds EUR 10 million – Laković reveals.
Each real estate they offer has its buyer, he points out.
– If we are talking about these individual villas, that niche is a bit narrower and specific, but there’s certainly interest. Everything that’s at the seaside, in settlements such as Ljuta, Dobrota, Krtole, Kaluđerovina, Rose, and Perast, if the price is reasonable, can be sold. For example, in Porto Montenegro, we achieved prices of up to EUR 12,000 per square meter for real estate, and in Portonovi, several One&Only villas were sold for more than EUR 10 million. That is truly good news for Montenegro. We are proving that we have such facilities in the market and that we can sell them, which further opens some new horizons and perspectives for investors. Also, we have in our portfolio everything that Sotheby’s group offers in the world that is very attractive to people when they visit us, especially apartments in London and New York, as well as houses on the Italian, Greek, and French rivieras – Laković says.
Trends and prospects in the market of luxury real estate.
What’s currently the trend in the real estate market and what’s particularly in demand are serviced apartments.
– People are losing enthusiasm for the purchase of real estate where there is no kind of service at all. Those kinds of projects are becoming a thing of the past, and everybody who plans to build in the future will have to make facilities with features – a reception desk, maintenance service, swimming pools, a gym, etc. The increasingly present trend is people from the region buying real estate. They come and stay here for three to four months, and they are still not too far away to go back to their homes easily. This year, we had as much as 50% of buyers from Serbia – our interviewee says.
In addition to the region, the purchasers of luxury real estate also come from Great Britain, Western Europe, Russia, Ukraine, Scandinavia, Poland, the Czech Republic…
– We have noticed that we are getting more and more clients from those countries that knew the former Yugoslavia as a destination. As Sotheby’s, we manage to promote Montenegro in a special way and prove that our country is not as it used to be, but that it is developing into an entirely new lifestyle destination. In the future, I imagine it as a spa center for rich clients – he adds.
Laković sees infrastructure as the biggest weakness of Montenegro.
– I hope that the tender for airports will be implemented so that some world operator could continue operating them and work on the seaside infrastructure, especially on the main traffic routes between Tivat, Budva, Herceg Novi, Kotor… That is our main area, that’s where big projects are implemented and that’s where the real, big money is coming from. The highway to Kolašin opened as well, and if we connect it with the highway to Belgrade, it will be a very important thing for us. We are happy that things are going in the right direction. Unfortunately, we are not a destination that has a developed economy, so we have to have real estate, tourism, or some atypical businesses – Laković says.
When asked how the war in Ukraine influenced the real estate market, our interviewee said that around 25,000 Ukrainians now lived in Montenegro.
– A slightly richer class of Ukrainians arrived in our country and they truly pushed the market and raised the rent prices. Now the trend of growth recorded in the rent market influences the construction of new facilities, which is certainly a positive impulse for Montenegro. I am sorry for everything that is happening in Ukraine, but I am glad that they found a sanctuary and a safe place here. We still have a large number of Russians coming, with whom we have excellent business relations. Russians have always had a strong interest in purchasing real estate, but it has been made very difficult for them because they can’t make payments – says Mr. Laković
Despite the crises and the events on the global level, the luxury real estate market in Montenegro is stable.
– The market is currently very strong and we expect a good trend in the future as well. The interest in Montenegro is stable and, when it comes to projects, I can see that Montenegro is valued as it is supposed to be. As I’ve already mentioned, people are aware of the advantages of living by the seaside, especially in resorts, and I am quite convinced that, in the future, there will be fewer and fewer traditional buildings and more settlements and resorts with additional features. It is simply a trend that all investors will have to follow – concludes Niko Laković in his interview for our portal.
Montenegro Sotheby’s International Realty
Porto Montenegro, 85320 Tivat, Montenegro
M: +382 67 310 006
E: [email protected]