Over the past two decades, Montenegro has granted nine long-term leases of land, ranging from 30 to 90 years, covering approximately 900 hectares, demonstrating the commitment of non-governmental organizations focused on social justice (ASP).

This leasing involved former factories, military barracks, social facilities, and sites of historical and cultural significance. The involvement of the United Arab Emirates in economic collaboration and tourism has paved the way for a lease on the beach in Ulcinj.

In the majority of locations leased previously, exclusive resorts have been established. However, construction on some sites has stalled due to administrative issues, and several projects have faced legal challenges.

All these leases were preceded by decisions from the Parliament of Montenegro and the announcement of international tenders.

All lease agreements and related investments were made during the term of the Democratic Party of Socialists, led by Mila Đukanović, before it lost power in 2020.

What did Montenegro allocate in long-term, multi-tier leases, and what were the outcomes?

Porto Montenegro

The first significant investment and long-term land lease of 90 years was signed just five months after Montenegro’s independence was restored in 2006, with Canadian billionaire Peter Munk for the Navy Arsenal in Tivat.

Munk’s company, Adriatic Marinas, was the only entity to respond to the tender issued by the then-government led by Mila Đukanović.

Munk paid 3.2 million euros for the shipyard. Additional social programs and land clearing increased the cost to 23 million euros. The lease encompassed about 25 hectares of coastline and approximately 70 hectares of adjacent waters.

With an investment of around 500 million euros, the old shipyard was transformed into Porto Montenegro – a luxurious marina for megayachts, alongside hotels and residential complexes.

To attract yacht owners and affluent clients, the Assembly of Montenegro passed a series of tax incentives, including reducing VAT on tourism and nautical services from seven percent, as well as exempting fuel for yachts from customs and taxes.

In accordance with the preferences of Munk’s company, planning documents and studies regarding the Arsenal were modified.

Ten years later, Peter Munk sold Porto Montenegro to a state fund from Dubai, although the price was never officially revealed.

Sveti Stefan

In 2007, Adriatic Properties under Petrosa Statis was granted a 30-year lease for the most exclusive summer resort in Montenegro, encompassing Sveti Stefan, Miločer, and Queen’s Beach.

The contract stipulated an investment of 50 million euros and an annual rent of 1.6 million euros, with the provision that the hotels remain operational for 11 months a year.

In 2015, the Parliament of Montenegro approved an annex to the agreement with Aman Resorts, extending the lease by another 12 years while lowering the rent to 1.1 million euros.

In addition, the lease on Queen’s Beach was extended from 30 to 90 years, allowing for the construction of a condo-hotel, i.e., sellable apartments alongside hotel operations.

These contracts with Adriatic were finalized during the DPS administration led by Mila Đukanović.

After the party lost its state-level influence, protests were initiated by local authorities in Budva in 2021 against the lessee, resulting in the demolition of protective barriers at hotel beaches leased to Adriatic.

This led the company to close the hotels due to concerns over guest privacy.

They subsequently filed a lawsuit against the Montenegrin government before the London Arbitration Court, alleging that the state was responsible for the property’s devaluation due to its non-use.

For four years, the beaches have remained accessible to all tourists.

Luštica Bay

The second major lease, valid for 90 years, spans nearly 700 hectares on the Luštica Peninsula, and was signed in 2009 between the Montenegrin government and Luštica Development, backed by Swiss-Egyptian investors led by businessman Sami Saviris.

The contract outlined a total investment of 1.1 billion euros, covering the construction of eight hotels, approximately 1,200 residential units, marinas, a golf course, business facilities, restaurants, and beaches.

To date, around 450 million euros has been invested at the National Agency for Investment Site. As per reports, over 400 apartments have been sold to owners from 40 different countries.

According to the contract, the annual lease payment amounts to one million euros.

Thus far, the government has secured about seven percent ownership in the company.

Monterose

In 2009, the Montenegrin Government entered a 10-year lease agreement for 50 acres of land on the Lustica Peninsula, near the settlement of Rose, with offshore company NorthStar.

This company was expected to invest around 140 million euros in the development of a tourist resort, including hotels, luxury villas, and various facilities.

Construction never commenced, and in 2018, an amendment to the agreement reduced the investment obligation to 80 million euros. Yet, even then, no developments were actualized.

In 2022, NorthStar informed the government of its withdrawal from the project, citing unmet state obligations, and initiated compensation proceedings before a London court.

The government has assembled a team to collect the necessary documentation to address the lawsuit and ascertain which party—state or investor—failed to meet obligations.

Portonovi

In 2012, Azerbaijani oil company Socar was granted a 90-year lease for land previously occupied by the military barracks “Orjen Battalion” located in Kumbor, Herceg Novi.

This agreement involved a commitment to invest 250 million euros, with annual rent set at one euro per square meter and an additional five percent based on profits.

On a site of nearly 25 hectares, the luxury hotel managed by One & Only Resorts has been developed, along with a business center and residential areas incorporating villas with pools.

The company has reported investments totaling over 800 million euros in this ambitious project.

Mamula Fortress

The Island of Mamula, belonging to the municipality of Herceg Novi, was leased in 2015 for 49 years.

Swiss-Egyptian company Orascom, a subsidiary of Orascom Holding, leased the island along with the Mamula Fortress.

This 19th-century fortress, located on the island of roughly three hectares, served as a prison for local anti-fascists during World War II.

The site is a significant cultural heritage site under state ownership. The investor was required not only to develop a luxury resort but also to restore the fortress.

The annual lease rate is 1.5 euros per square meter, with additional costs of 90 euro cents per square meter for adjacent waters. The investor has committed to investing 15 million euros.

Following the reconstruction, it was reported that investments exceeded 36 million euros.

The former barracks have been transformed into luxury hotel accommodations, while the camp area has been refurbished into a spa, restaurants, and bars.

Ulcinjska Riviera

In 2017, the Montenegrin government awarded a 30-year concession for the Ulcinj Riviera to the Karisma Hotels & Resorts consortium through a public tender.

This lease encompasses 12 hectares of land, with commitments for additional hotels and facilities. The investor is expected to invest approximately 16 million euros within the next two years as part of the agreement.

Fixed annual rent is set at 450,000 euros.

Further investments in new tourist facilities are anticipated until 2027, bringing total investment to around 32 million euros.

Mediterranean Žabljak

The former military complex in Žabljak was leased in 2018 to Baltic International Trading from Estonia for 30 years.

This lease covers an area of 1.4 hectares, where the consortium agreed to pay one euro per square meter and five percent of annual revenue, with plans to construct a five-star resort worth approximately 5.5 million euros.

Construction has yet to commence; UNESCO raised concerns, recommending suspension due to the land’s status within the Durmitor National Park.

In 2021, the investor filed a lawsuit against Montenegro in Commercial Court, seeking 26 million euros in compensation for alleged lost profits.

Kolašin 1600

The Kolašin 1600 ski center was awarded a 90-year lease in 2018 for 27 hectares of mountainous land adjacent to the ski resort of the same name.

The contract outlines a rent of 10 euros per square meter and 0.1 percent of annual net profit, meaning the state receives approximately 27,000 euros in rent and an additional 1,000 euros for every million earned by the tenant.

The only bidder for the public tender was a consortium of Albanian businessmen led by Baška Uljaje and Zoran Bećirović, co-owner of hotels in the Kolašin 1450 ski resort.

The ski areas are connected by 45 kilometers of trails.

The investor was obligated to construct a tourist complex valued at nearly 13 million euros within the first year of the lease. Total investments, as outlined in the investment program, are expected to be around 77 million euros.

To date, three hotels have been completed, one of which is operational, while two additional hotels are under construction.

The center is situated 12 kilometers from Kolašin, directly connected to Podgorica via a highway.