homepage_name! > Editions > Number 108 > Interview - Darren Gibson

Darren Gibson, Chief Executive Officer Luštica Development AD

Luštica Bay Life as it Should Be

The construction of this new destination in the Mediterranean - the Luštica Bay town - is one of the largest projects in this part of Europe and the only greenfield project in Montenegro. This means that we are developing in a completely undeveloped and initially, inaccessible area of land, which lacks all the required infrastructure, which we have of course, included in our plans, with the intention to develop the project according to the highest contemporary architectural and ecological standards. So far, some 140 million euros have been invested in the development, including key elements such as the hotel, marina, golf course and real estate. At the same time, we have been constructing the necessary infrastructure - roads, water and sewerage systems, power supply, telecommunications and the like. Infrastructure worth about 90 million euros will be built in the Luštica Bay complex, which also makes this project one of the largest infrastructure projects in Montenegro. We are planning to build around 30 kilometers of roads, 43 electricity power sub-stations, four water reservoirs and wastewater treatment plants from which, we will recycle treated water for irrigation.

Mr.Darren Gibson, ChiefExecutive Officer Luštica Development AD speaks for Profit magazine.

1.Mr. Gibson, where were you born? Where did you grow up and go to school?

I was born in rural New South Wales, Australia in a small town called Forbes. We moved around a little during my childhood and I lived in the New South Wales regional cities of Dubbo and Tamworth; the latter being where I spent my formative teenage years, attending the Farrer Memorial Agricultural High School. Following secondary schooling, I attended the University of New South Wales in Sydney, graduating with an honors degree in Urban (Town) Planning.

2.How did your career develop before you reached the position you hold today?

I joined Luštica Development AD in October 2014, with over 25 years of experience in public and private sector urban development, including twelve years as an urban planner in city and regional government authorities in Australia, eight plus years as a Company Director in urban planning and development consultancy practices in Australia and 6 years as Vice President of Planning & Development for the Egyptian Resort Company [ERC] in Egypt.So my career has really evolved from traditional urban planning, through project management to development and business management disciplines, but always in the planning, management and implementation of urban planning projects, including master plans and large urban land release areas, major tourism projects, commercial and residential projects and major infrastructure.

3.Mr. Gibson, could you tell us the approximate financial weight of the resources that went into the Luštica Bay project to date. What are the plans in place for future investments in the project development, and the total value of the investments?

The construction of this new destination in the Mediterranean - the Luštica Bay town - is one of the largest projects in this part of Europe and the only greenfield project in Montenegro. This means that we are developing in a completely undeveloped and initially, inaccessible area of land, which lacks all the required infrastructure, which we have of course, included in our plans, with the intention to develop the project according to the highest contemporary architectural and ecological standards.

So far, some 140 million euros have been invested in the development, including key elements such as the hotel, marina, golf course and real estate. At the same time, we have been constructing the necessary infrastructure - roads, water and sewerage systems, power supply, telecommunications and the like. Infrastructure worth about 90 million euros will be built in the Luštica Bay complex, which also makes this project one of the largest infrastructure projects in Montenegro. We are planning to build around 30 kilometers of roads, 43 electricity power sub-stations, four water reservoirs and wastewater treatment plants from which, we will recycle treated water for irrigation.

Our immediate plans include the continued development of our exceptional golf course and the kick off of construction in the Centrale precint – the future town center of Luštica Bay.

Estimated at around 1.1 billion euros in value - the construction is expected to continue for some 20 years.

4.The Master Plan envisions the construction of an entirely integrated destination with all the necessary contents that will sustain the possibility of both short-term and long-term residency. Could you elaborate on this?

To be built on some seven million square meters in the Tivat part of the Luštica peninsula, our town will include seven hotels, two marinas, an 18 hole golf course, a combination of real estate typologies consisting of apartments, family houses and villas, as well as the town’s centre, with all necessary facilities like school, medical centre, sports and recreational facilities, and commercial and cultural objects. We have been transforming ordinary settings into an exquisite destination and creating a new living community.

While Marina Village was created to offer apartments for vacation, Centrale, whose construction will begin in October, is more planned for those who would like to be permanent residents of Luštica Bay and Montenegro. We offer opportunities for both: temporary and permanent residency, through the services offered such as the commercial and administrative facilities, cultural institutions, restaurants, shops, public facilities such as schools, medical center, and police and fire station. Everything is well thought out in the effort to create and energize the community, that will be a new center for active and healthy life at the Mediterranean.

5.You are in the final stages of The Chedi Hotel opening, one of the largest five star hotels and the second of its kind in Europe. What do you believe you gain by investing in the construction of this type of hotel?

Montenegro is definitely emerging as one of the ‘hottest’ tourist destinations. There are three indisputable things when it comes to Montenegro and our project: the beauty of the country and its great potential, the Luštica Bay concept and its optimal integration into the local heritage of the area, and finally, the Chedi brand and its distinctive hotels, with an exceptional level of service. We expect a great first year and we are convinced that The Chedi is an excellent addition to the existing hotel offers in the region. The Hotel will open in mid-July and the first inquiries and reservations have already arrived, which is another reason for excitement for the presentation of Chedi Luštica Bay to the world.

This is the first hotel of seven in total in the master plan. It marks the arrival of a renowned hotel brand to Montenegro. The Chedi Luštica Bay is the second European hotel of this brand after GHM, the owner of Chedi, established cooperation with our parent company, Orascom Development Holding, in Andermatt, Switzerland where ODH is also developing a luxurious tourist village.

At the end of last year, in the competition of more than 800 hotels around the world, Chedi Andermatt received the Luxury Mountain Hotel - Global Winner award for the best luxury mountain hotel in the world, and the Luxury Ski Resort - Continent Winner Europe for the best luxury ski resort in Europe. This makes the Chedi brand a true asset to the Tivat municipality.

As a synonym for the positioning of a luxury brand, the Chedi hotels are known for their connection with history, culture and tradition of the communities in which they are present, as well as for their respect of the local environment - these features and values are clearly represented in Luštica Bay. This synergy was an important deciding factor when opting for a brand for our first hotel. At the same time, it brings the first commercial and catering facilities in Luštica Bay. More importantly, it delivers on our commitments and vision – it positions us as a serious player in the market and will drive traffic to the site both local and international – not only provide an amenity for those who arrive to our site. The Chedi is also the first luxury 5 star hotel on the Luštica peninsula and one of the largest in the Boka Bay.

6.The preparations for the opening of the first newly constructed marina in Montenegro in over 10 years are well underway. How is the marina equipped in terms of the infrastructure and what is it intended for?

Luštica Bay Marina is a state-of-the-art harbour and an ideal gateway to the Adriatic coastline. Set between startlingly blue waters and mountainous horizons, at the entrance to the UNESCO world heritage site of the Bay of Kotor, it provides awe-inspiring access to one of the most coveted sailing destinations in the world. Our Marina will ultimately offer: 176 berths ranging in length from 6-35m, Yacht Club and crew facilities, 24-hour yacht assistance and multi-lingual marina team, local repair & maintenance services, water and electrical facilities, 24-hour security, Wi-Fi internet access. Phase 1 of the marina will open in July.

7.The awareness and care for the environment holds the principal role in the construction process of the marina. In which aspects is this reflected?

It was a challenge because we were constructing a new facility in the open sea and therefore the timing & sequencing of the works were crucial, particularly given the strength of the sea in storm occurrences during winter. There were two key goals: to reduce the amount of concrete and avoid reinforced concrete due to corrosion effects and subsequent deterioration of the concrete elements; and to use as much natural material as possible sourced directly from the Luštica Bay site. The visible concrete is really a ‘capping treatment’ with at least 80% of the construction mass amounting to the natural earth and stone.

This required detailed examinations and analysis of the best engineering solutions in non-reinforced concrete. Strong seismic activities on the location required additional efforts to provide the stability to some parts of the object. The chief designer of the Luštica Bay marine design, Mr Zvonko Tomanović, received in 2015 the award of the Engineers Chamber of Montenegro (ECM) for accomplishments in planning and the construction of objects.

8.Where are you on the construction of the golf site at Luštica, which will be the first championship field in Montenegro? When do you expect it to be completed in its entirety?

We have completed heavy excavation works and rough shaping work is in progress on the first 4 holes plus the driving range. However, we have had to temporarily suspend works as we were unable to secure the required quantities of water from the authorities due to the delay in the completion of necessary water infrastructure. Nevertheless, we are working closely with the authorities and are confident that we will resolve this issue presently. Following its previous success, a temporary driving range facility will be set up again this season. At this stage and dependent on the water supply issue, we estimate that the golf course will be completed by early 2021.

9.When can we expect the official opening of the retail area? What is its surface, who is it reserved or intended for and when will it be open for the visitors?

We expect that at least 90% of the retail and commercial space of around 1500sqm will be opened in the main marina this summer. A variety of uses and activities will be on offer including marina administration and marina related services (brokerage, sales, service, chandlery), restaurants and bars, fashion and homewares, jeweler, beauty clinic, beauty products, gallery, real estate sales, health studio and supermarket.

10.Centrale will be built and envisioned as the city centre of Luštica Bay, for nurturing a newly formed and an all year long present community. Which types of services, convenience and other contents will you be offering so as to attract not merely the residents and guests of Luštica Bay, but also the inhabitants of the nearby towns and cities?

In addition to the opening of the marina, the “Marina” Village and the first hotel, the most important activity is the start of construction works on the “Centrale”, the administrative core and the city centre of the whole village. “Centrale” will be constructed on the area of 240,000 square metres neighbouring the Radovići village, and will represent the community hub of the entire Luštica Bay. This will serve as the link between Luštica Bay villages, the bordering villages as well as Tivat and Kotor. The apartments in the Centrale are already on sale, and are very competitive in terms of prices on both the domestic and the regional markets.

“Centrale” envisions numerous commercial, cultural and public facilities, including a medical institution, a fire brigade and a police station, a school for 180 students, are all planned in enabling a permanent home to some 1000 residents, as well as temporary residence for a few thousand more. “Central” will spread on more than 20,000 square metres area of public areas, as well as a free zone activity area of some 95,000 square metres. The construction will be divided into seven phases and it is scheduled to begin in October. Luštica Bay will be open and accessible to everyone. Our great desire is to encourage local residents not only to visit Luštica Bay, but also to buy real estate and become part of Luštica Bay family. Such opportunities are made possible through favorable real estate prices in Centrale.

11.What are the next plans for the creation of the new city centre and to what extent do you think this will contribute to the further development of the whole region and the tourist potential in the Tivat area.

Our plans for the future focus primarily on constructing a golf course, and the new infrastructure facilities that should enable further development of the residential part of the project, together with the construction of the Centrale as the core of the town of Luštica Bay. The first buildings in the Centrale have been sold, and sales are progressing well. The construction of the first buildings will begin in October and they will be completed next year. We believe that, through seven phases over the next ten years, the Centrale will become an attractive place combining privacy, missed by many, with the privileges of a cosmopolitan life. In the coming years we will also start the development of the second hotel of 300 keys in the Marina.

Our contribution is already visible – initiating the development of an entire area, global promotion of Montenegro as a tourist and investment destination, contributing to the country branding depicting Montenegro as a destination offering high quality luxurious residential contents, employment, education of employees…

12.In concrete terms, what can we expect in the period to come regarding the growth and development of Luštica Bay, as an example of a “greenfield” investment in Montenegro.

This year is the most important for us since the project was initiated, with the grand opening of both the first marina and the first of our hotel - The Chedi. We are rapidly approaching the completion of the first phase of the development – the Marina Village – where we have already completed and handed over 160 apartments, with 60 additional apartments, family homes and villas in construction. The construction of the Chedi hotel is advancing and the main works on the Marina have been completed. We are now in the finishing stages of works in this segment, including the works on retail areas that will surround the Marina - all in preparation for the official opening during this summer season.

13.While planning the construction of the Luštica Bay, how much attention was paid on the question of environment preservation, and have ecological methods of construction been used throughout the process?

During the construction of Luštica Bay, we continuously supported Montenegrin culture, tradition, beauty and, above all, the environment. The project defined a comprehensive goal of creating a clear, ecological and sustainable development and community. Despite the impressive list of our features, bricks and mortar will cover merely some ten percent of the leased land with the balance area being allocated to the nature, sports fields, walking and biking lanes, golf course, and the like. For the architecture of all Luštica Bay properties, we found inspiration in the regional traditional architecture, insuring that the future town will easily blend in its surroundings. For Orascom Development Holding, our mother company, environmentally responsible business has always been integral part of its corporate philosophy. All our projects are eco-friendly and designed in line with the highest international environmental standards. We believe the local population will appreciate our efforts in preserving the environment and creating new development opportunities for the community. As a responsible company, we have respected the needs of the local area and the community, thus green protection zones, sustainable energy and water consumption, as well as a safe waste management system are integrated in our development plan.

14.To what extent were the local community and the companies involved in the project as a whole?

We believe that we do not only construct, but rather create new communities. Such philosophy of our company has put us in close cooperation with the population in our immediate neighborhood and the wider Montenegrin community from the very beginning: in the presentation of our project, in our financial support to address their needs, or simply reflected by our support to the development of the cultural and sport events and projects.

Since the establishment of the company, Luštica Development invested more than 1,2 million EUR in different projects whose beneficiaries are stakeholders identified within the local community. Our company has sponsored local sports clubs, different cultural programs, and the public sector – schools and kindergartens, and socially vulnerable categories. Some 500 workers and more than 20 local companies are currently working on the project daily. In this year alone,

Luštica Development will provide

30+ new job opportunities and The Chedi Hotel has offered another 170. After filling these vacancies by the end of the year, the total number of employees in Luštica Development and the Chedi Hotel will be around 100 and 180 respectively.

15.Why did you choose Montenegro as a destination suitable for this type of investment as opposed to another one?

Luštica Development AD was established in 2008, as a joint initiative between Orascom Development Holding (90%) and the Government of Montenegro (10%). Orascom Development Holding has always been interested in new destinations with promising prospects for business investments. Montenegro is one of the fastest-growing tourism destinations in the South-Eastern Europe, so our decision to choose this country as our second European location (after Switzerland) was an easy one. When we considered the fact that Montenegro is only a two and half hour flight away from the majority of European capitals, its rich cultural heritage and untouched natural beauty, as well as its potential for growth, the decision to invest here was a logical one.

16.How do you see the business atmosphere and ambiance in Montenegro, as well as the legal regulations?

During the last few years, Montenegro has shown a strong commitment to establishing a modern market economy. It has undergone significant reforms, particularly in the process of EU integration, in order to create a favorable business environment. I would note that the business environment is improving, but further development in this regard is still needed and I believe that this is a shared opinion of both foreign investors and numerous respected international institutions. Key development areas include ongoing efforts to enforce the rule of law, providing conditions for greater transparency and consistency in law enforcement, which ensures greater security for business. Finally, progress must be made in the infrastructure dimension. From the perspective of my sector, the advancement in the transport services and infrastructure, especially in terms of roads and airports, is of critical importance to the success of the tourism industry.

17.Seeing that you represent a Swiss-Egyptian company, what percentage of the buyers come from these countries and how many buyers do you have from other countries? Who do you believe is the potential buyer for the residencies within the Luštica Bay?

So far, we have sold 250 apartments, town houses, villas and condo apartments to clients from around the world – 34 countries.

As our parent company Orascom is a Swiss-Egyptian company, it is to be expected that our first clients would come from Switzerland and Egypt, where loyal buyers follow our projects around the world. Each of these countries comprises approximately 10% of our buyer pool. The natural markets for Montenegro are Russia and Serbia, as well as the neighboring countries of the region, which collectively represent major percentage of the buyer pool. Among others, we also have clients from Montenegro naturally, as well as from the UK, France, USA, Lebanon, Monaco, Austria, Hong Kong, Kuwait, Sweden and Germany, etc.

Our ideal Luštica Bay resident is an aspiring community member, not merely a property buyer.We want people who share our vision - to create a vibrant, inclusive and sustainable year-round resort town, attracting regional and international renown for its value proposition, high quality natural and built environments, diverse offerings and experiences, relaxed lifestyle and strong sense of community - and those who know how to enjoy life. We see our clients as people who appreciate comfort and quality and share the love of the outdoors. Our villas and apartments are surrounded by rich greenery and crystal clear water, and there is also lots of free space to enjoy and engage in tracking, sailing, golf and other sports and leisure activities. Our residents will be able to participate in the vibrant community life in the surrounding area, but we also see them as relaxed, laid back people who enjoy a glass of good wine and local specialties, a good book and an enjoyable and scenic walk on the beach.

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