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For Sale 38 million euro

Development on 20.000sqm

Private Harbour Private Beach
Exclusive apartments
Restaurants, bars, Coffee shops



Zoltan Sztan

Managing Director


1066 Budapest Hungary

Jókai utca 8.

Phone: +36 20 574 4028



Investment opportunity

The project property is located at the western border of Montenegro, in the downtown of Herceg Novi. Currently it operates as a 4-star hotel under the name Hunguesthotels Sun Resort. We are looking for a private investor partner for a planned development of exclusive apartments. We are confident that the planned project guarantees a min 25% annual yield on the invested capital, exceeding the market average. The development could start in 12 months after the JV would be established and would last 2,5 years approximately.

Following the development, the PORTONEGRO - Private Residence and Yacht Club will offer a net 24 121 sqm unique residential area and terraces on a total area of 5 202 sqm. The resort will have a huge wellness division providing also healthcare services, a yacht harbour capable of serving more than 100 boats (in the range of 42-200 feet), a 300-metre long sandy private beach, coffee shops and fancy restaurants.

According to the plans, the apartments and the parking lots will be sold to private individuals, and on demand we are re-letting the apartments and providing operation services. The other units will be retained and leased to operators generating further long-term income for the SPV.

Important project information

  • unique project site in the Bay of Kotor, a UNESCO World Heritage Site
  • project site embedded in the old city of Herceg Novi
  • 300 metre long sandy private beach
  • yacht harbour to serve 105 boats between 42 and 200 feet in length in first phase with opportunity to double the capacity in the second phase
  • total plot area of 20,000 sqm
  • quickly reached from the Dubrovnik (25 km) and Tivat airports (30 km)
  • priority national economic project
  • optimum risk-to-return ratio
  • planned total project costs: EUR 190,8 million
  • creating EUR 372 million value after the development
  • EUR 56,7 million gross profit only from the sale of the apartments
  • EUR 7 million additional annual income from the operation
  • IRR is expected to be above the market average, between 18-24%, despite of the calculated high financing ratio
  • YOC 13,9%

Why Montenegro?

  • 1.5 million guests and 9 million guest nights per year in hotels, 99% of them realised on the seaside
  • according to WTTC, Montenegro is ranked as number 1 in the world in terms of short- and long-term growth potential in tourism
  • an average of 240 sunny days each year
  • the Mediterranean climate is perfect for sailing throughout the year and along with the gorgeous natural environment provides a unique combination for recreation in early spring as well as late autumn.
  • The fabulous Italian and Greek harbours are within easy reach by boat (e.g. Bari is 140 km afar).
  • unique gastronomy, combining the Italian, Greek and Turkish cuisines to give a genuine ring of Mediterranean feeling
  • Montenegro offers a stable political and economic environment for investments
  • Montenegro is an associated member of the European Union
  • it has an open market economy, heavily relying on foreign investors
  • decent economic growth for several year
  • despite the booming hospitality market of the last few years, it is still the right moment to invest in
  • in the near future, real property prices are expected to significantly increase
  • despite its natural conditions the Bay of Kotor ("the Monaco of the Balkans") doesn't have too many exclusive real properties, however some of the current developments suggest this direction
  • based on the experiences of the past few years, properties are selling fast and at a high margin

Location of the project property

Macro location

Herceg Novi is located at the borderline between Croatia and Montenegro, on the coast of the Adriatic sea. As the part of the Republic of Venice between 1420 and 1797, the settlement was known as Castelnuovo and has had a turbulent past. Its history of 700 years has created a picturesque architectural style. It is also the largest city of the Bay of Kotor with diverse cultural attractions and a natural environment that pleases the eye.

There are 20 beaches within its administrative boundaries, most of them are rock or covered by tiny pebbles, the largest of its few of its sandy beaches will be the private beach of PORTONEGRO. With its pretty Mediterranean squares, restaurants, coffee shops and bars, this bustling little town is one of the most favoured tourist destinations. In addition to sunshine, the sea and the special flora, the town is attractive because of the continuous cultural programmes, including the annually organised international film festival, the mimosa celebration and music fests.

Herceg Novi is located at the entrance to the Bay of Kotor and at the foot of Mount Orjen, offering excellent features for the planned yacht harbour. The surrounding sights are within easy and fast reach of the town, yet with yachts. On public road, Dubrovnik lies 50 km, Budva 44 km and Sveti Stefan is 53 km from the town.

By plane the town is easy to reach: the Dubrovnik and the Tivat airports are at a distance of 25 km and 30 km, respectively.

Micro Location

The 2-hectare real property is situated right next to the old downtown. The seaside border of the complex overlooks the coastal promenade, filled with bustling life during the season. The plot has a 300 m long exclusive private beach. In 2007 the seaside section was granted the blue flag rating, which certifies the outstanding cleanness of the water. The Bay of Kotor offers excellent features for a yacht harbour.

For understandable reasons, hotels and luxury apartment houses of international brands open one after the other, representing excellent concepts and in most cases successful and quick sales. What makes our project different is its location at the seaside and yet in downtown, the proximity of Dubrovnik, also a UNESCO World Heritage Site, its merely 25 km distance from the Dubrovnik airport, which is bigger and has a better international traffic than the one in Tivat. The PORTONEGRO - Private Residence and Yacht Club also offers to its customers a spa and health-centre with unique services based on the healing sea mud and mineral water springs of Igalo.

Naturally, in the course of developing the project income plans, we paid attention to the pricing of the surrounding projects, e.g. the prices of the last success project, Porto Montenegro, as dreamt by the Munk group. The resort complex is located at a less frequented place, in an industrial town, opposite the shipyard. Nevertheless, it is a major success, due to the boom in tourism to Montenegro. The last 200 apartments were sold right from the designer's desk despite the fact that they are located next to the noisy airstrip. This also underlines the interest shown in this coast of amazing natural and cultural endowments.



Porto Montenegro


centre of a bustling old downtown

town rim


quiet part of the coast

next to a noisy airport


300 m long private beach

swimming pool only


Festivals, events round the year, international film festival, international guitar festival, international classical music festival, flower festival etc.



Cultural heritage accumulated during centuries in the town, rich history

More modern town, it was a naval base of the Yugoslavian People's Army

within 50 km

Dubrovnik, Budva, Bar, Sveti Stefan

Budva, Bar, Sveti Stefan


Dubrovnik, Tivat



idyllic natural environment, a wonderful botanical garden

beautiful natural environment, but opposite industrial facilities, e.g. a shipyard

Rehabilitation aids

Health centre based on the mud of Igalo


Sales price

EUR 6 000 - 12 000

EUR 10 000 +

Market environment

Montenegro's economy relies heavily on tourism, which adds approx. 20% of GDP with its related business lines. The economy is stable, and the recent years have been characterised by a moderate 2% GDP growth and relatively stable fiscal policy.

The economy of this small country need foreign investments, and the number of projects are on the increase, primarily with focus on tourism. For this reason, the Montenegrin government does everything within its power to attract foreign investors: it has adopted a highly open and market friendly economic policy at low tax rates. The 9% corporate income tax is the lowest in Europe. Employees are also required to pay low income taxes at 9%. Real property purchases are subject to the payment of a 3% tax proportionate to the purchase price share. Labour is relatively cheap, the average income is currently at around EUR 700 gross. 0.5-1% tax is payable on real properties in proportion to their values. Depending on the project size, major projects, including PORTONEGRO - Private Residence and Yacht Club, are considered as priority projects, which means faster and simplified administration.


Tourism is constantly developing: the number of guest nights increase year by year, in recent years this number was around 8-9 million, 99% of which was spent in seaside hotels and hostels. Most guests come from Russia, generating 28% of all guest nights. Despite the fact that there has been a long boom in tourism, WTTC still ranks Montenegro first in respect of both short- and long-term growth potential. No wonder: Western Europe is just beginning to discover Montenegro, and the number of Italian, French and German tourists rises from year to year.

The most important plans of the Montenegrin government include the development of motorways towards Serbia, Croatia and Bosnia. These measures may raise further significant growth in the number of incoming tourists.


With a view to the features of the property we devised a project vision that matches the natural and cultural environment. We intend to erect a remarkable symbol at the gate of the Bay of Kotor, offering the highest luxury to the visitors, yacht and apartment owners.

Current status of the real property

Currently, there is a resort complex comprising two hotels, minor buildings and small apartment houses on the property. According to our plans, we will convert the Mimóza hotel into an exclusive apartment house, demolish the scattered and small size apartment buildings and the Primorka hotel to create two luxury residential building that meets today's style and demand, including a wellness department, health services, restaurants and coffee shops.

The real property after development

Our goal is to create a unique, dream-structure which perfectly fits into its environment and yet prevailing over the image of the Bay of Kotor to become a must-see destination of the yachts arriving in to the bay.

It is our duty to capitalise the exceptional features of the project and to establish this special resort that has to become the best in terms of its quality and services. Building the yacht harbour, landscaping the plot, beach arrangement, and the establishment of the helicopter landing strip all serve this purpose. As we pay due attention to environmental sustainability, we will not allow motorised vehicles enter the park, only small electrical cars can be used. The passages, and even the lift, will be built to give room to such vehicles in order to facilitate movement for the guests on the territory of the complex. Also in the spirit of environment-friendliness, a built-to-order energy system, using heat energy obtained from solar cells and the sea water, will provide the overwhelming majority of the energy requirement of the facility. The 3-metre headroom of the luxury apartment house and the large, opening glass surfaces will allow the guests enjoy the view from a huge roofed terrace.

On a total area of 25,000 sqm, the central apartment house will be built of high-quality materials with full service to attend to all requirements. The grandiose building will have ample spaces. With a very special solution, we will create a suspended terrace that will become the symbol of the project and predominate its sight. The terrace protruding above the water will house a restaurant, a coffee shop and a bar.

Below there will be a wellness and a healthcare centre. The healthcare centre intends to exploit the beneficial effects of the healing mud of Igalo, a tiny village that forms part of Herceg Novi, but will also offer other up-to-date devices and methods, like hydro- and electrical treatments. It is indicative of the popularity of this mud that the Norwegian healthcare administration has recently booked a significant number of guest nights in the town to ensure healing for their citizens.

In addition to the restaurant and the bar, the luxury apartment house will also accommodate conference and event halls. The apartments will be spacious, typically with a residential area occupying 90 sqm or more. Most terraces will be equipped with a jacuzzi, will be at least 9 m wide, separated from the living room by a huge glass, and overlooking to the sea.

Due to the special building design, altogether 2,400 sqm hanging gardens will be made and overlook the sea linked to apartments on a floor area of 2,800 sqm. On the majority of these swimming pools can also be made.

On the top floors, guest will be awaited with a higher level of luxury: direct entrance from the lift, huge internal spaces in the apartment and enormous terraces offering a panoramic view. The topmost level will accommodate a single suite with a roof garden, a pool and a panoramic view that is impossible to describe, to the town, the surrounding mountains and the sea.

Following the development, the newly built Primorka apartment will offer 81 suites, in the range of 100 to 200 sqm, on a total gross area of 15 700 sqm to the most demanding guests. The building is located right on the beach. In most cases rooms overlook the sea.

The current 4-star Hotel Mimóza will be turned into a luxury apartment by heightening the current building with one floor effecting an additional 656 sqm and giving the building a completely new look to offer 41 rooms on 3,381 sqm. This facility is also situated on the seaside, actually next to the private beach, offering a breathtaking view directly on the entrance of the bay.

The fantastic resort with wonderful garden and private beach of the complex will offer an exclusive environment that will be further improved by the private yacht harbour with altogether 105 landing places and the required facilities for superyachts. The harbour can receive boats in sizes ranging from 42 to 200 feet. The surrounding majestic mountains and fragmented coastline of the Bay of Kotor does not only offer a captivating sight but also natural protection to boats. We also consider it a serious competitive advantage that our project will be the first thing every sailor sees on arriving in the bay.

Business plan

We are planning to sell the total residential area and the parking places to private individuals prior to and during the development, involving international companies like JLL or Colliers in the process.

In our calculation we were projecting additional income to the SPV from re-letting the sold apartments of the owners in the vacant periods. We would lease the operation rights to a professional and internationally known hospitality company, splitting the profit with the apartment owners to make them interested in the process.

The rest of the units will be operated and let to professional facility management companies. As far as possible, we will contract a renowned international brand with the most appropriate experiences in letting.

The major milestones of development will include the following:

1. Step 1 (2016 Q1)

Establishment of a project company jointly with the investor.

2. Step 2 (2016 Q2 - 2017 Q2)

Design and licensing expected to require one year. Due to the size of the project, it will be considered as a priority project in Montenegro, which means that the licensing procedure will take place in Podgorica, the capital city, in the responsible ministry.

3. Step 3 (2017 Q1 - 2017 Q2)

Selection of the project company in charge of administration and implementation

4. Step 4 (2017 Q2 - 2019 Q4)

Beginning of implementation, marketing and sales implementation will take 2-3 years


In an Excel format

Income and cash flow calculation

In an Excel format (CF)

Business proposal

We will establish an SPV for the development where the investor will have the majority of the shares. The concrete numbers to be discussed by the parties during the personal meetings. The current value of the real property is EUR 35 million, the investor is required to pay EUR 26.25 million to step in the project.

In addition, the project will require a development cost in the amount of EUR 155.8 million. As the local banks are unable to serve projects of such size, financing background will probably need to be ensured through foreign bank or banks. In line with the above, and calculating with a general LTC ratio of the banks in Europe we are estimating an additional equity requirement of EUR 41,3 million. All in all the maximum investment obligation of the investor is about EUR 70 million.

According to our calculations, the revenues from the apartment sales will completely and strongly cover the costs of the project, and any amounts above will be distributed in proportion to the shareholdings. The project will generate additional profits partly on leasing the units outside the apartments (beach, shops, harbour, restaurants, health centre, conference hall) which remains in the SPV's ownership, and partly from the operation and re-letting of the apartments.