Oleg Deripaska, Russia's businessman, to construct resort in Montenegro

Updated September 22, 2008

   Oleg Deripaska’s first large foreign developer project will become the most scale among the other foreign construction projects of Russia’s market players. As it came out, the businessman and his partners take part in the construction of the resort with yacht berths in southern Montenegro. The area covers 2 million sq.m, and investments attain €8,3 billion. The sum is enormous on the background of the world liquidity crisis.

   The chief executive of TriGranit’s representative office in Russia Sergey Gogolev told that Basic Element’s shareholder (BasEl) Oleg Deripaska and the core owner of the Hungarian company TriGranit Shandor Demjan take part in the project on the construction of the resort area in southern Montenegro (Ulejn seaport, Budva). According to him, there is the third large investor in the project - the Canadian businessman Peter Munk, the founder and head of Barrick Gold Corporation. Mr. Gogolev refused to announce the partners’ stakes, but marked that the total volume of investments in the project equals €8,3 billion.

   In BasEl reminded that since 2006, the holding owned the aluminum works, Kombinat Aluminijuma Podgorica (KAR), and the bauxite mine in Montenegro, but refused to comment the developer project. However, Arpad Sekey, Hungary’s ambassador to Russia (from October, 1, will head TriGranit’s representative office in Russia) and Maxim Temnikov, the member of Mirax Group Corporation directors’ board and owner of the project in Montenegro, aware of Oleg Deripaska’s participation in the Montenegrin project.

   One of the market participants aware of the project explained that the owners of the area in Montenegro, who attracted the pool of investors to develop this scale area, take part in the project also. According to the European mass media, the Rothschild family invests in the project as well.

   The partners intend to construct the yacht infrastructure, hotels, apartment estates and villas, Sergey Gogolev said. However, he didn’t specify the total area of the developed territory. At the moment, the project conception is being designed. The construction is planned to start in 2010, and the implementation of the project will take about ten years to finalize. "This construction will resemble the projects directed to the complex development of Dubai’s area", he explained. According to Knight Frank’s partner Ekaterina Teyn, it goes about the territory that can be compared to the area of Monaco (1,9 sq. km or about 200 ha).

   The Montenegrin project exceeds n-fold by the investments volume other construction projects with the participation of Russia’s developers in the foreign countries. Sergey Polonskiy’s Mirax Group completes the construction of Astra Montenegro recreation complex in Montenegro with the total area of 94 000 sq. m. The company owns some projects in the USA, Switzerland, Vietnam and in London, including the construction of Mirax-Beetham Tower skyscraper coupled with Great Britain’s Beetham Company (investments reach about ₤500 million). As it came out in July, Inteco Company intends to allocate €325 million to construct the resort estate in Monaco with the total area of 2 million sq.m., and it is engaged in the hotel construction in Karlovy Vary (the Czech Republic). This year, Metropol Group will start the construction of the residential and office real estate in Hanoi (Vietnam) with the total area of 1 million sq.m., and the company and its Vietnamese partners will invest $800 million in this project.

   Lately, Montenegro’s market demonstrated high growth rates, Maxim Temnikov from Mirax Group explained the investors’ interest in the country. "One and a half year ago, when we were joining Astra Montenegro project, we expected to get the sales price of €3 200 per 1 sq.m. Now, we sell at €6 000", he says. Within the last couple of years, the prices for real estate in Montenegro doubled, Ekaterina Teyn agrees. "Now, despite the financial crisis, the prices don’t fall there, as well as in the Western Europe, where, for instance, in Great Britain, the prices fell by 10% on average within the year", he supposes. However, the advisor to Leader Managing Company’s chief executive Aleksey Chalenko forecasts that in the light of the continuing financial crisis, the sales of Montenegro’s real estate will recover. "The resort real estate is not a purchase of the main apartment, but of the second or even of the third, and it is not so important", he supposes. "However, in the nearest one or two years, the financial situation will rebound, and the sales will recover. Since the realization of the areas will not start earlier, the investors shouldn’t face any problems".