Friday, 20 September 2019

Imperial Riviera, Valamar and AZ Pension Fund Enter New Investment Cycle

Imperial Riviera will operate in multiple destinations across the Republic of Croatia with the highest level of corporate governance quality as the owner of a significant tourism portfolio.

As Poslovni Dnevnik writes on the 19th of September, 2019, in an invitation to the General Assembly, the management of Imperial Riviera d.d. proposed an increase of the share capital of the Imperial Riviera, worth 426 million kuna, equivalent to about 57 million euros.

Over the last three years, Valamar Riviera and AZ pension fund (Mirovinski fond) have jointly invested over 1 billion kuna in Croatian tourism through the acquisitions of Rab's Imperial and Hotels Makarska and through continued investments in the development of their tourism portfolios. The merger of Hotels Makarska with Imperial at the end of June this year created Imperial Riviera d.d., with the aim of creating a stronger platform for continued investment in the expansion of their tourism business in Croatia and the wider region.

The announced increase of Imperial Riviera's share capital is the beginning of the realisation of a five-year business plan that anticipates 200 million euros worth of new investments in raising the quality of their portfolio and growth through acquisitions and expansion to attractive tourist destinations in Croatia and across the region, making Imperial Riviera one of the five leading tourism companies in all of Croatia.

As stated, Imperial Riviera will operate in multiple destinations with the highest level of corporate governance quality as the owner of a significant tourism portfolio.

"Raising capital and organising a joint venture for the management and investment into property in the region is a logical continuation of the successful cooperation between the leading pension fund and the leading hotel company in Croatia. We believe in the growth potential of Croatian tourism and the long-term sustainability of the hospitality industry which invests in employees, destinations and quality tourism, and I'm convinced that partnering with the AZ pension fund is an ideal model for investing and developing Croatian tourism,'' said Željko Kukurin, CEO of Valamar Riviera.

"Continued investment in this joint project is a follow-up to the investment strategy of the AZ pension fund under which we invest in Croatian tourism, as we believe that such investments are in line with the long-term investment potential of our fund members, for whom such investments represent the possibility of obtaining optimal returns. We consider the model in which we combine the investment potential of AZ pension funds and the experience and success of running Valamar, as a leading Croatian hotel company, as a model that ensures the long-term success of this project,'' said Kristijan Buk, CEO of Allianz ZB, a company which deals with the management of mandatory and voluntary pension funds.

Valamar Riviera is a highly respected, leading Croatian tourist company that manages hotels, resorts and campsites in well-known tourist destinations. Valamar can accommodate approximately 58,000 guests a day in 34 hotels and resorts and in 15 campsites, with the aim of providing the perfect holiday and an authentic experience for each individual guest. Valamar is a leader in innovative resort tourism management and is a destination partner, which through responsible and sustainable tourism business, creates new value for guests, employees, shareholders and the local community alike.

The AZ pension fund is the largest institutional investor in the Republic of Croatia. With total assets under management exceeding a massive 44 billion kuna, the AZ pension fund represent relevant investors in the European context as well. AZ's mandatory pension funds are currently taking care of the retirement savings of over 677,000 Croatian employees, while AZ's voluntary pension funds deal with over 142,000 citizens.

Imperial Riviera has six hotels, three tourist resorts and two campsites in some of the leading Croatian destinations, the island of Rab and Makarska. Valamar has been in charge of managing the tourism business of the entire portfolio since 2016.

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Thursday, 29 August 2019

800 Million Kuna Investment for Rijeka, One of Largest in City's History

As Poslovni Dnevnik writes on the 29th of August, 2019, this building was built about forty years ago and is the latest hospital facility in the Rijeka area, yet most of the hospital's medical facilities are housed in a building that is more than one hundred years old.

Back at the beginning of this month, the government approved the director of the Clinical Hospital Centre (KBC) Rijeka to conclude contracts with contractors for the second phase of the construction of a new hospital in Rijeka, popularly called the ''mother and child'' hospital, a new construction site will be opened in Sušak in September.

In the currently contracted time period of two and a half year, a brand new hospital complex will emerge, in which the current Clinic for Gynaecology and Obstetrics, the clinics and wards which are now part of the Children's Hospital in Kantrida, all hospital laboratories and ancillary facilities such as the thermal power block and a multi-storey car park, will be replaced.

The investment, worth almost 800 million kuna, was secured from this and previous budget years, and which was a precondition for signing contracts with contractors Kamgrad and GP Krka, which should complete the new facility by March 2022, writes Novi list.

The building for the new hospital complex is a major part of the long-awaited second phase of the construction of the new hospital, which, more than a decade ago, began with the construction of other facilities in Sušak, with a total of 90 million kuna invested over the years.

The second phase of construction of the new hospital began back in 2016 with the excavation of the construction pit and the arrangement of a new integrated emergency reception, which began operations last year. Along with the aforementioned excavation and the new emergency admission facility, when it comes to the second phase of the new Rijeka hospital, around 875 million kuna should be invested, which definitely makes the second phase of the new Rijeka hospital one of the largest investments in the recent history of the entire Northern Adriatic city.

It is common knowledge that KBC Rijeka operates in as many as three localities today, which primarily increases costs, but also significantly affects the quality of care. The construction of a hospital for mother and children will move the entire site of Kantrida, a valuable property owned by the City of Rijeka, to Sušak, while the Clinic for Gynecology and Obstetrics at the Rijeka site should be redeveloped after the relocation of the new clinic.

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Friday, 23 August 2019

Croatian Hotel Company and French Consortium to Invest in Croatia?

As Novac/Goran Penic/Barbara Ban writes on the 23rd of August, 2019, the Croatian Ministry of State Property extended the deadline for the submission of offers for the construction of a tourist complex at the location of the Hidrobaza in Pula, owned by botj the state and the City of Pula, back at the beginning of the week. Investors now have time to report their offers by October the 1st, as opposed to August the 30th, 2019.

According to the aforementioned ministry, two investors sought an extension due to the summer break, but the ministry did not disclose any names. As Novac reports unofficially, this involves the largest Croatian hotel company, Valamar Riviera, based in Poreč, Istria, which owns Camp Brioni next to Puntižela, and the French group Bouygues, whose branch in Croatia has a concession over Istria's Ypsilon.

Upon being asked about this situation, Valamar Riviera did not want to confirm or deny any information.

Valamar Riviera has remained unable to answer the question of whether or not Valamar has expressed interest in the Hidrobaza location in Pula, given that the deadline for the submission of bids is only the 30th of August.

''After the deadline for submission of offers, we will be able to answer your inquiry,'' said the largest Croatian tourist company, which is already known to the public as a large investor. This year alone, the giant Croatian hotel group has invested as much as 793 million kuna in its portfolio, and is preparing a new investment cycle of 599 million kuna for the next one. In recent years, they have invested as much as 5 billion kuna in Croatian tourism.

The French Bouygues Group has already invested in Croatia, but not in the hotel industry. They are known as dealers and contractors at the Istrian Ypsilon and at the Zagreb's new Franjo Tuđman Airport. They are currently expanding the Ypsilon on a 28-kilometre stretch from Pazin to Učka. It is an investment worth 1.237 billion kuna, which will be realised within the next three years. Projects in tourism are very close to them, though, and they have built twelve hotels across France, the Caribbean, Myanmar, Morocco, Dubai, London and Cuba.

However, despite the fact that there are two very serious names behind this project that have great references in Croatia, in the Croatian tourism sector there is still a great deal of skepticism about the realisation of it all, probably because of past experiences that have not been the most positive.

These tenders have always been extended, and until now, a concession has been given within the Brijuni Riviera only for the Katarina-Monumenti location, namely to Danko Končar, who still has not realised his meganautical project in the port of Pula to this day. A source who is very familiar with the circumstances surrounding the Brijuni Riviera project believes that the tender conditions are quite restrictive.

''One of the limiting factors is that there is a public beach in front of the future tourist facilities. If one wants to build a hotel, of course they then want to have a part of the beach as well. On top of that, some of the facilities there are under conservation protection, so the investor must adapt to that as well,'' explained Novac's interlocutor. He also stated that it should finally be understood that investors need to be offered something in order to make them actually invest, and that the beauty of the Croatian coast and Istria is not the only thing that is crucial in investment stories.

Otherwise, the Hidrobaza location covers an area of ​​281,000 square metres, and construction rights are possible for fifty years. The initial value of the annual building rights fee is 2.3 million kuna, which will be revalued every three years. The deadline for the construction of a 1200-star four-star tourist destination is five years.

Pula Mayor Boris Miletić stated that he has been formally notified of the extension of the public call, however, while the proceedings are ongoing, he claims he has no knowledge of potential interested investors or potential bids.

''Every serious investor needs some time to elaborate on their offer. For Pula and all the people of Pula, that entire area, as well as other formerly unused and decaying state-owned military areas, are of great importance and development potential. It is our interest that the state, as the owner, put them in the function of development, as this would enable the creation of new jobs and accelerate the economic growth of Pula,'' said Miletić.

He added that the new facilities and the higher standard of living of all the people of Pula is what they strive for, which can be ensured by putting neglected and unused spaces properly back into operation.

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Saturday, 10 August 2019

Biggest Croatian Fun Park to Get Water Attraction Worth 45 Million Kuna

As Novac writes on the 10th of August, 2019, the Croatian park ''Fun Park Biograd'', located near Biograd na Moru close to the popular city of Zadar in Dalmatia, was modelled after some of the world's famous adrenaline entertainment centres.

So far, this Croatian park has seen investments amounting to around 115 million kuna, and the park has now announced a new, huge investment worth an additional 45 million kuna. This staggering amount, according to the local Zadar newspaper Zadarski list, has been allocated for the construction of a water park, or an aquapark, which will extend to and cover 10,000 square metres.

''As we've got some free space on the south side of the car park, we're constructing a big, new attraction. The largest theme-amusement park in Croatia with its new water park and the existing Fun Park Biograd will be called Dalmaland. It will be an ideal symbiosis of attractions both in water as well as on dry land,'' stated the ambitious Stipe Tabak, the general manager of Fun Park Biograd.

The works, as Tabak said, are expected to last until mid-spring 2021 and the water attraction will open in time for the summer of that year. The main investor is, just as it was before, Mirnovec Pyrotechnics, from the continental Croatian town of Samobor, just a short distance from Zagreb.

Such amusement parks, as he says, have to be constantly updated with new facilities, which means that there is a need to constantly keep investing in them. The goal is to cover the costs of the loan raised for its landscaping over the next ten years, as was explained by Franjo Koletić, director of the Mirnovec Group, in his interview with the popular Globus.

Biograd Fun Park currently employs ninety full-time staff, students and seasonal workers, and last year they recorded about 80,000 visitors, seventy percent of whom were foreigners.

Make sure to follow our dedicated lifestyle and business pages for much more on Croatian attractions and Croatian investments.

Tuesday, 6 August 2019

Offers Arrive for Hotel Plitvice Renovation: 100 Million Kuna Investment

As Novac/Dora Koretic writes on the 6th of August, 2019, judging by the documentation published in the Official Gazette, the reconstruction of the Plitvice Hotel located inside the much loved national park, an architectural building originally designed by Marijan Haberle (Croatian architect), will be carried out by the 3LHD architectural studio or the Arta Design (Projektiranja) firm from Zagreb.

Namely, the two companies were the only ones to submit a binding tender in the design documentation tender for the reconstruction of this now-neglected and dilapidated concrete ''specimen'' of post-war domestic modernist architecture, in which Plitvice National Park, according to the earlier announcement of director Tomislav Kovačević, plans to invest 100 million kuna and convert it to a boutique hotel.

As can be seen from the tender's details, a cheaper offer of 5.6 million kuna was submitted by 3LHD, while Arta Design's offer was 25,000 kuna more expensive. It remains to be seen whose conceptual solution for the renovation of the Plitvice Hotel will impress the management and the park experts the most.

Either way, both companies have a very good reference list when it comes to designing hotels.

Namely, Studio 3LHD is the company behind some of the most impressive Croatian hotels, such as Maistra's Lone Hotel and the latest investment by Hotel Park. On top of all that, there is also 3LHD's "foreign" business which is done over in China, where the Zagreb-based studio completed the LN Garden project in August last year, complete with 365 rooms in the popular Chinese city of Guangzhou.

Arta design, on the other hand, is behind the investments made by the Alhambra and Villa Augusta hotels in Lošinj, where Arta also worked on interior design, they also dealt with the interior design done in the well-known Lošinj Hotel Bellevue.

"It's correct that two bids have now arrived, and now it will take about a month to decide, so I think sometime in September we'll know who the author of the hotel's renovation will be. After that, we'll still have a lot of work to do, it will be followed by the announcement of another type of tender, so I don't thinks that the works will actually begin before winter next year, "said Plitvice National Park's director Tomislav Kovačević, adding that he hoped that the newly renovated hotel would open its doors to its first guests in 2021.

It's worth mentioning the fact that is the first major renovation of the park-owned hotel facilities in the last twenty years. This now unimpressive building was built in 1958 as the first Yugoslav A-category hotel. Over the years, unfortunately the hotel has been ''left to its own devices'' and been neglected quite a bit, as is evidenced by the fact that its official category is now at a mere two stars, which is why NP Plitvice's park management decided to restore it back to its old glory.

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Wednesday, 24 July 2019

11 Million Kuna Invested into Vukovar Micro-Brewery So Far

With the very handsome investment from the ''K Pivovari'' company, an additional 850,000 kuna has increased the capacity of micro-brewery in Vukovar from 5000 to 6500 hectolitres per year.

As Darko Bicak/Poslovni Dnevnik writes on the 23rd of July, 2019, the K Pivovari (brewery) company, owned by the Zagreb brewery (pivovara), has invested am massive 850,000 kuna in new equipment for the Vukovar brewery production plant located in Vukovar's economic zone, which will further increase the production capacities of these micro-plants.

As they explained, there are four additional fermenters, three of which have a volume of 33 hectolitres and one of 20 hectolitres, and a cylinder tank with a 33 hectolitre capacity. In addition, the K Pivovari company has invested in new labels and more. The production capacity of this micro-brewery amounted to 5000 hectolitres per year, and with this new investment, it has been increased to 6500 hectolitres per year.

As explained by Mario Duvnjak, K-Pivovari's managing director, the production facility of Vukovar's brewery was opened in August last year in the BIC-Vukovar business-innovation centre's area.

"Zagreb Brewery invested 11 million kuna through it's daughter company K Pivovari, prompting further investments in Vukovar and in Vukovar-Srijem County. After the opening of the production plant, our investments haven't stopped. We've been thinking about the further modernisation of production, especially in the direction of increasing production capacities and we're extremely happy that we finally realised it. With this investment, we want to give this beer the place on the market that it deserves,'' Duvnjak said.

"We've recognised the potential of this beer and we want to give it the place on the market it deserves. This beer is produced according to the original recipe, which is a light, unpasteurised and filtered beer that was among the first in Croatia to be presented as a small-production beer when sold in smaller bars and shops, for the time being, it's intended solely for the Croatian market, from Vukovar, Zagreb, and even to Dubrovnik, but with the potential to expand beyond the borders of Croatia,'' Duvnjak pointed out.

He added that the national presence on the market was made possible thanks to the Vukovar beer's special sterile filtration, whereby the Vukovar beer bottle's life span has now been extended to 120 days, unlike the current 90 days. They are currently producing only a light version of the beer, but in the future it is certainly planning to experiment with the new flavours. From Vukovar's micro-brrewry, they say that, in addition to the better positioning of this beer on the market, they're also oriented towards participation in the development of the local community with which they have very positive and completely open cooperation.

''Vukovar's beer was declared the best Croatian beer in 2010. It has 4.5 percent alcohol,'' concluded Mario Duvnjak from K Pivovari.

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Monday, 15 July 2019

Just How Interesting are Companies with Seats in Croatia to Investors?

As Novac/Viktor Vresnik writes on the 15th of July, 2019, Axel Kalinowski, director of the London Stock Exchange for Central and Southern Europe, has been working hard for years with representatives of Croatia's market as part of his task of building a bridge between the new Europe and London as the centre of global financial and capital flow.

Novac and Kalinowski talked at the Esplanade Hotel in Zagreb, where he was Deloitte's main guest at a capital market conference.

The Croatian market is very small, even if we look at it together with the Slovenian market. Does it make sense to have a local stock market in such a market?

''This is a question that is constantly being repeated, and can be put everywhere in Europe. Every European country today has its own stock market. Some have more of them, such as Germany, where there are seven, though, despite the size of the market, the capital market culture is in fact not significantly developed.

Our idea is to concentrate activity and regulation in one place. It's a job I've been dealing with for a while. European and even Croatian companies don't compete solely on local markets, they're also struggling for their place on the regional and global markets.

The lack of strategic capability for access to funds on a large capital market can be considered a handicap compared to the companies whose access to that is secured, which are therefore far more liquid and ready for investment exploits. Europe must do everything in its power to make it easier for its companies to access money sources.

These aren't just capital markets, there are also a variety of alternative funding methods that diversify the traditional ways of collecting money. Europe is too bank-oriented. Banks are, of course, important, but when they become the main source of capital, then that becomes dangerous.''

London is a huge market, one of the largest in the world, and the most important in Europe. Can it keep hold of that position after Brexit?

"It depends on what sort of Brexit we have in the end. Only then will we understand how close our relationship will be.

The London Stock Exchange has always been very closely connected with the continental part of Europe. We're a very European organisation, we are the owners of the Italian Stock Exchange, parts of the French market... I think Brexit will ultimately not prove crucial to our business. The London Stock Exchange is over 200 years old, older than the very first idea of ​​the European Union.

It has always been one of the world's largest markets. If London loses out on the EU's political map, it doesn't mean that it will come out of the market. Europeans will then use the London Stock Exchange as one of the overseas markets on which their companies are listed. Such a separation is probably a mistake, but I don't think that it will harm the position of London as a global capital and finance centre in the end.''

Could Brexit actually be good for London because it puts a strong market in the position of being on neutral ground?

"We already have the opportunity to see some companies which list their shares in London, even though they're already on one of the world's major stock exchanges. We mustn't forget that today, money plays a big role on the market, money from the Middle East, from Asia... for them, London has always been a neutral point, unburdened by European political turmoil. In the long run, Brexit could really boost London towards the position of an actual global market. It's difficult to foresee what the situation will be in the short term. Anything can happen in that respect.''

Does Trump's chaotic US economic policy help you there?

''There's no doubt that his sentences often have an impact on the US market, and everything that affects the US market then has a global impact. We've noticed that the interests of North American companies for the London Stock Exchange have become significantly higher over the last few years.

I don't think that's just because of politics, I think it's more about structural issues. The London market is more neutral, internationalisation is more mature when talking about medium and small businesses. The American market is huge, but it's oriented towards the largest corporations like Google, Facebook, Amazon... If you're small, you can quickly get sucked up there. The London market is not marked by these megatranslations, but it has the most stable flow of money in both large and small companies. The ecosystem in London is far more sophisticated and more lively than that of New York. We offer a better environment for middle business, and they have recognised that fact.''

What exactly is your job as the head of the Eastern European Division of the LSE?

''Today, around 2,200 companies are listed on the London Stock Exchange and they come from 110 different countries.

We're trying to strengthen our presence in areas where we don't think we've fully exploited the potential and where there are opportunities for companies to better understand what the capital market is. We think that this part of the world, Middle, Eastern and Southern Europe, isn't yet sufficiently serviced.

The market culture here lags behind other parts of Europe. We're trying to build a bridge that will link local companies to global investors. That's my role. To help companies understand the role, as well as the capability of capital markets, as well as numerous other, alternative business financing opportunities. Break the fear of ''big'' London, which people who sit far from the centre sometimes make out is a big, weird, dangerous place, full of predatory banks and institutions.''

The London market has strict rules, many companies fail, nor do they want to play under those rules...

''Yes, the rules are firm and have been being applied like that for a long time now, but I think the fear of such an approach on the continent is exaggerated. London is, above all, a place of great networking and exchange of ideas. It's a meeting point.''

Which markets have you recognised as the most developed in the part of Europe for which you're in charge?

''It's an exciting region, a region that, at growth rates, suggests a potential that is bigger than the one in old Europe, where the lowest growth rate is still considered good today.

That's why new Europe is more interesting to investors than old Europe is I think the people from this region suffer from the prejudice that the global investor community is't interested in it. That's wrong.

That is wrong here in Croatia, too, where many aren't interested in London investors as they're based in Croatia. It's true that companies in the vicinity of Croatia have recognised the opportunity use the London market very successfully. Romania has an excellent privatiaation program, and their privatisation agency is listed on the London Stock Exchange. There are a large number of large, formerly state-owned companies which are listed on the exchanges in Bucharest and in London. Slovenia has recently listed the new Ljubljana bank in London, which we consider to have been a success, as well as the selling off of Serbian bonds at historically low interest rates...''

Two large Croatian companies, Pliva and Zaba, left the London Stock Exchange because it did not pay for them to be there...

''This has happened a long time ago, today things are different, the stock market offers far more opportunities than it did before and we're more open to different types of companies.

There are several different segments of the market with different standards. AIM, a market oriented towards small and medium-sized companies, has very simple standards today, all of which aare aligned with the needs of the investor.

There is no minimum threshold for listing, and given the fact that we're talking about new companies here, we don't investigate their financial history. Even on the regular market today, we have a split into two segments. The standard segment follows the rules of the EU, which apply to most European markets, and even in Croatia, only the premium segment applies the specific rules of the United Kingdom which, I would say, are at a more strict level than the continental ones are.

However, this regulation is based on good business practice, which is significantly different from that of the US, where strict rules must absolutely be followed. Our philosophy is different. If you don't abide by any of the rules that have been set, you must be given the opportunity to explain why that is. If that's acceptable to investors and regulators, then it can be adopted.''

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Monday, 8 July 2019

Croatia Finally Ready for New Investment Cycle, Investors Interested

As Poslovni Dnevnik/Marija Crnjak writes on the 7th of July, 2019, the director of Cushman & Wakefield CBS International for Croatia, a global real estate market player who entered Croatia's market back in May, explains why the domestic property market has been more lively over the last few years and to what extent developers have taken advantage of that positive trend.

He also revealed his recommendations that Croatia can follow to make sure everything improves, how it can use this new investment potential to the maximum extent possible, and discussed the situation in Croatia's region.

Cushman & Wakefield has expanded its exclusive cooperation with CBS International with its entrance onto the Croatian market back in early May, promising new projects and investors that have continued to show a growing interest in investment in Zagreb, along the Adriatic, and even in other parts of the country.

Cushman & Wakefield already covers the regional markets of Serbia, Macedonia and Montenegro, with a total of 51,000 employees in more than seventy countries, it is among the largest companies specialising in commercial real estate services and enjoys a massive 8.2 billion dollars in revenue. Poslovni Dnevnik sat down and talked with Predrag Tutić, the director of Cushman & Wakefield CBS International for Croatia, and talked about the new investment cycle that is expected in Croatia, the investment projects with the greatest potential, property prices and the legal regulation in the property valuation segment.

Why are you just entering the Croatian market now?

The company's global strategy is to be present on the markets where the customers are present. So far, it's been organised so that markets are covered by regional centres from the surrounding countries. Thus, Budapest was responsible for this part of Europe, and the Prague office supervised operations throughout Southeastern Europe. It has been shown that we've not been able to provide enough strong local support to our customers because there is a need for local knowledge as the market is sensitive and investors are very precise in seeking information.

The markets are similar, but we can already see the difference between the Zagreb market and that of Belgrade or Budapest, not to mention the Czech Republic or Slovakia, which are markets that are much more active.

Our clients are banks and investment funds that require consulting or property assessment services, then companies which go on and open new offices and domestic or foreign developers who're developing projects on the housing market or the commercial real estate market.

Is your entry onto this market an indicator of stronger dynamics on the Croatian real estate market?

Of course, the market has come to life in the last three years and is dynamic. Zagreb recorded a slight increase in transactions in all segments on the property market and this trend will continue, so the city will remain attractive for investments, as will Croatia's coastline which is always attractive for tourism investments.

The main reasons for the revival of the real estate market in Zagreb can certainly be seen in the recovery of the economy with a low level of unemployment and a rise in salaries and personal consumption. In addition, banks are very liquid and lending is convenient.

All this has resulted in higher demand for all products on the property market, we know that most shopping malls have changed owners, and there were great investments that took place in tourism as well. The housing market has already been very dynamic for three to four years now, there are a growing number of transactions, new projects are well thought-up and respond to the needs of the market, so investors didn't encounter any problems with their sales.

What can you expect in the future, what do you count on?

In the forthcoming period, we expect a new investment cycle that will bring in modern projects with new content, but to do so, we have to work on the development of infrastructure and urbanism, in the City of Zagreb and in other cities in Croatia. City zones need to be defined in a better way and locations for new types of projects that will provide a different type of experience with their concept and content, either in offices or in the residential segment, need to be prepared. Market changes happen very quickly, business models are changing and investors have to follow that. In the surrounding countries, such projects have existed for years and Croatia is now prepared for them.

In Zagreb there's a low rate of free office space, and so the prices are stagnating.

The vacancy rate is now below five percent, which clearly shows that the market is ready for new projects. We expect the lease prices to remain stable, but future projects that will be defined by the new standards will also have some higher prices. So far, the generators of the growth of the property market have been IT companies which grow quickly, they have been among the first to have implemented new standards in using their business premises to motivate and retain their employees in a stimulating working atmosphere.

Have you noticed the greater interest of foreign investors in Croatia?

There's definitely great interest from foreign investors, as well as from domestic investors and developers who have been analysing Croatia's market for some time and considering all the possibilities for investing in Croatia.

So far, there have been some attempts made by investors but now is definitely the right moment to catch that wave. It's necessary to define projects and investment zones where they can realise their ideas. We support them in every step, from the project definition itself, its features, the preparation of the market project, the analysis of the site itself with the investor, participation and monitoring of different stages of project development, and finally at the point of placing the investment onto the market.

How do markets differ in Zagreb and Belgrade?

Zagreb's investment cycle and market development began in all segments ten years before Belgrade's did, which is particularly noticeable in the segment of commercial real estate. In 2009, Zagreb had one million square metres of office space, and Belgrade will only reach that number by the end of 2020. In the retail space segment, Zagreb has 650 square metres of space per 1,000 inhabitants, and Belgrade on the other hand has 230 square metres. However, Belgrade is a bigger city and there is a greater need for new commercial spaces, which is one of the reasons for the current expansion of the market.

How big is the market in Budapest, and the Czech and Slovak markets are saturated, what's happening there?

These are bigger and more developed markets, but more importantly - the quality of the offer they have differs significantly when compared to that which Croatia offers and have long been on the map of institutional funds. On the other hand, it's difficult to talk about the same trend for all segments of the market as they go through different phases, because they're heavily dependent on supply and demand. For this reason, in such countries, investing in better quality commercial or residential projects that will respond to specific market niches as well as investing in alternative investments such as investment in student homes or homes for the elderly, are increasingly present.

Will house prices rise further?

Over the last three years, prices in Zagreb have risen, which is the result of new projects that have been better defined and as such introduced new prices. When we talk about housing construction, we have to make a difference between demanded and realised prices. I'd say that the realised housing prices in the coming period will not grow drastically, because we're still a market with limited capacities. We've had a very similar number of transactions in the last three years, so we don't expect any bigger deviations here.

Do you see a place for the development of long-term rental projects?

Certainly, this is a model that happens abroad, and it will certainly be one of the segments that will start to develop here, whether it's generally intended for housing or for student accommodation.

The long-term rental market is slowly stabilising. It is well known that a large number of owners have changed things up with their property to suit short-term rentals on the tourist market, but I think we've reached a certain maximum on this issue and the trend is that the owners of apartments will slowly return to long-term rental market. Tourism management requires serious engagement, property preparation, and constant investment to make the market competitive and generate revenue. I expect the market to stabilise over the next two years, and I also expect new investors for long-term leases.

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Wednesday, 19 June 2019

Valamar Invests 280 Million Kuna in First Large 5 Star Camp

Despite the rather unpromising weather that marked May and the very beginning of June, at the beginning of the month, Valamar's new camp received more than 1,500 guests, most of whom were Germans and Austrians.

As Borivoje Dokler/Poslovni Dnevnik writes on the 19th of June, 2019, at the beginning of the month in Funtana, a Croatian village seven kilometres away from Poreč, the Istra Premium Camping Resort opened its doors to the public.

This is the first large Valamar five-star camp, which stretches across 37 hectares of land and can accommodate as many as 2,781 guests at any one time. Over the past two years, 280 million kuna has been invested into the project, making this, along with the five-star Valamar Collection Marea Suites, the most significant project for Valamar this year. Booking is going excellently and on the day ''camp opening day'', scheduled for the 27th of June, the camp will operating at full capacity.

Most of the guests appear to come from Germany and Austria, although it's still somewhat difficult to grasp the exact structure of guests to this Valamar facility. This camp, with its wide choice of luxury accommodation, can satisfy even the most demanding guests, from those looking for a nice plot facing the Adriatic sea, a modern camping home, to those wanting a luxury camping villa with its own private pool.

As far as prices are concerned, Valamar offers plots ranging from as little as 15 to as much as 119 euros, and when it comes to luxury accommodation, prices range from 58 to 567 euros. For example, for a glamping tent with a fully equipped kitchen, bathroom and two bedrooms during the peak tourist season, it's necessary to allocate around 250 euros per day, while renting out the most expensive Camping Villas which can accommodate up to six people, you're looking at a price tag of above 500 euros.

The camp has a large number of entertainment facilities for children, of which Aquamar is particularly well known, it's a family water park with five pools and water attractions covering a total water surface of 1,030 square metres.

What is particularly refreshing about Valamar's new project is the large indoor entertainment zone with various playrooms, children's clubs and a large theater. The games are equipped with the Super Mario program and are adapted for children under three years of age, and then from three to seven and then seven to twelve years old.

In the centre of the camp is the central Piazza square (trg), which hosts the ''Musi&Fun'' program each and every night, and is surrounded by a number of small specialised shops and bars. Although they offer mostly high-quality products, the prices here don't really differ all that much from those you'd see in regular stores.

Up to now, Valamar has invested an enormous 5.8 billion kuna in Croatian tourism. Within the three-year growth and development strategy, a total of 2.5 billion kuna has been invested into its tourism portfolio, and more than 3 billion kuna has been invested in the expansion of the company's operations and acquisitions.

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Thursday, 13 June 2019

Bušljeta and Klemm Invest 5 Million Euros in Nomad Bar, Zrće

As Poslovni Dnevnik writes on the 13th of June, 2019, the owners of the internationally famous beach clubs Blue Marlin and Nikki Beach want to open their first Croatian franchise in Novalja, at no less than Zrće beach.

In just one week, Croatia's famous Zrće beach is set to get a large new gastronomic-music club for adults over the age of 25.

This refers to club Nomad which will be jointly opened by the owner of the nearby club Papaya, Ivan Bušljeta, and Josip Klemm, at the site of the former Aquarius.

As has already been reported, the duo purchased Aquarius in spring this year, and back in March, they founded the company Projekt (Project) Nomad, building a new club.

As Bušljeta revealed, this new investment is worth about five million euros, and the club combines a combination of top-quality gastronomic services, deep-house, house, techno, tech house and other disco music with a relaxed club atmosphere.

When it comes to the actual design of the club, the duo were inspired by the style of those on the populat Greek island of Mykonos, and those responsible for the design and the realisation of it are Leskovar and Mi2 studio, and the club, according to Bušljeta, is undergoing its final stages, and because of that, no photographs of the progress are currently available.

Zrće beach's brand new club will operate as a beach bar, a restaurant and a nightclub with a two-hour cabaret show that will be held every night during the tourist season. Nomad will officially open at the Island Gathering Festival, which will be held in late June in cooperation with BSH events and Tanzen Kollektiv.

Nomad's owners have revealed that this is just be the beginning of the transformation of the famous (or infamous, as the case may be) Zrće beach.

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