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Development Objectives of Adriatiq Islands Group in Croatia

Our company - as foreign investor - was the first to conduct activity after the war, therefore our presence is solid and our contacts are wide ranging.
 
 
We have been present on the Croatian tourist and real estate market for 10 years, operating with substantial assets of owned hotels, marinas, camping facilities and development areas. Our familiarity with the local conditions and institutions allows us to easily navigate in Croatian public administration and the legal environment which is still being bureaucratic today.
 
We currently believe that Croatia and our touristic investments have matured to gain recognition on the global market. From 2010 the second chapter of expansion of the tourism sector has begun in the region.
 
The date of EU accession is now foreseeable, so the world’s attention is shifting toward Croatia. Investors’ capital starts to discover the country’s unique touristic features, its opportunities as well as its result achieved so far. A major upturn is once again expected to take place.
 
By recognizing the development needs arising as a result of EU accession, Adriatiq Islands Group plans to commence the necessary investments from a favourable, prepared position.
 
Adriatiq has been successful in implementing the two pillars of its business strategy. We have managed to conquer the region’s market positions and acquired the most valuable tourist properties. The long term investments provide a stable background, a solid reputation and prestige as well as substantial contact network. The development projects with fast returns lay the financial foundations of future progress.
 
Our plans include the conversion of our own coastal hotels, apartments into directly marketable condominiums that constitute separate proprietary units. We have set the target of acquiring and developing hotels and apartment villages located in touristic zones directly on the seaside, which are out of service or require renovation and not yet classified as touristic properties - but are expected to be classified as such in the future. This strategy is implemented in order to enable us to offer a choice of property for those moving here after EU accession.
 
The so-called ownership partnership program allows the proprietorship of independent hotel units, suites, rental apartments, rooms and apartment houses, registered in the land registry. It also enables the operation of these units as apartments, vacation homes in the near future.
 
Partnership constitutes cooperation - on various levels - concluded with the operator of the hotel group, from a simple caretaking contract to collective utilization that produces revenue for the buyer as well. The aforementioned sale of property is granted by law enacted in 2009.
 
Adriatiq was the first to request the University of Law in Zagreb to work out applicable contractual forms in Croatia for the form of ownership defined as Condominium around the world. These were completed in the summer of 2010. We wish to lead the Croatian market in this form of real estate sale in the long term.
 
These new coastal areas also require real estate development projects which allow us to benefit from the significant rise in prices generated by EU accession.
 
The development area on the seaside can be purchased at a price of approximately 700-800 EUR/m2, while real estate development would cost around 800-900 EUR/m2. The sales price approximates 3,000-3,500 EUR/m2, nevertheless these properties are situated directly on the seaside, the price would likely to be higher. Exceptionally high yields may therefore be realized by those who are first to seize the opportunity.
 
In relation to the establishment and sales of condominiums, Adriatiq already possesses product models and marketing schemes elaborated for its own properties. Utilizing the existing experience and commercial channels - with the participation of business partners and investors - we plan to buy up the targeted properties prior to significant price hikes.
 
 

1) Our residential developments: Rudine, Lukoran

Among the two development areas, Rudine is located on the outskirts of Split, on the hillside, with a marvellous view of the sea. This is the largest single, unbuilt piece of land in the area where we plan to construct villa houses similar to a gated community. This represents a unique initiative in the area through which we wish to set an example.
 
We plan to implement high quality apartment buildings in the town  of Lukoran, designed to include local architectural features, which are provided with private marina berths.
 
 

2) Construction, development of marinas

There are 105,000 registered ships in Croatia and an additional 160,000 ships visit the waters of the country each year. In contrast, currently there are only 15,000 sea and 5,500 land berths available in Croatia. While maritime tourism increased by 10% annually in recent years, waiting lists for berths have gotten even longer. Maritime tourism generates EUR 700 million annual revenue. This justifies our investment plans.
 
Our group owns and operates two yacht marinas, Marina Tribunj and Marina Kremik. We have extensive experience both in the area of construction and operation. We are in competition for three new port/marina concessions, one of which is a so-called mega yacht port that is currently lacking in Croatia. The floating piers of the new marinas can be manufactured in Hungary, making up 35-40% of the total investment value.
 
 

3) Implementation of an aqua park near Porec

 The aqua park  will be able to serve the recreational needs of the 11 million tourists visiting Croatia each year, particularly those of families and young people. On the basis of international statistics, the aqua park planned near Poreč can expect to receive approximately 20% of guests staying in a radius of 100-130 km, who seek water recreation. This corresponds to 500,000-600,000 visitors in Istria.
 
The preparation of the area, the field management plan and licensing are available.
 
 

4) Construction of an airport between Split and Sibenik

Adriatiq Islands Group, together with the Croatian government, is involved in the preparation of the planning of the airport and the establishment of an investor consortium. The expected passenger traffic of the airport will equal 1.5-2 million passengers in the six-seven months of the season, and it could also handle substantial cargo traffic.
 
 

5) Acquisition of the shares quotas of the commercial port in Ploče

Development of the complete port is possible by transferring the absolute majority of shares to the investors financing the project. In addition to the existing 120 hectares, the port in Ploče also has a further 114 hectares of development area with the use of a similar sized area on the outskirts. The container receipt capacity needs to be expanded and construction of the liquid natural gas (LNG) terminal is also possible. The end point of the north-south European Union V/c motorway by the sea is Ploče, only 320 air kilometres from the Hungarian border. There is an electric rail line running from Budapest to Ploče along the Danube, through Eszék, thus the use of the sea port is a logistical necessity for Hungary.
In line with the implementation of the investment objectives outlined above, Adriatiq Islands Group is seeking financial or strategic partners, and offers favourable yields on subscriptions of its investment fund.
 
 
We are offering a business partnership to jointly implement the development projects which are certain to produce high yields for us. Accordingly, in the next five years we plan to implement an investment package (2nd pillar) with a capital requirement of EUR 400 million in the framework of the previously mentioned projects. We are establishing Adriatiq Europe Investment Fund (SIF) for the purpose of financing the development projects.
 
The current gross value of our existing investments (1st pillar) is approximately EUR 230 million. You can become a partner and beneficiary of the roughly 10% annual appreciation of these investments. The engines of such appreciation are the growth in Croatian tourism, the European migration from countries with a less favourable climate and high living costs, as well as the appreciating effect of the aforementioned new investments.
 
We plan to market the portfolio, appreciated with joint efforts and capital investment, on the stock exchange on a onetime occasion, after the accession of Croatia to the European Union.

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