Sarajevo Rises in Popularity with Middle East Property Buyers
Bosnia has seen an influx of tourists from the Middle East in recent years and a growing number of property buyers from the GCC are seeking investment opportunities, particularly in the country's capital, Sarajevo.
In response to rising demand from both tourists and investors, Dubai-based developer Buroj Property Development said on Saturday it plans to invest ?4.3bn to build a luxury tourist resort just outside the capital, in what could be the biggest foreign investment of its kind in the Balkan country.
Bosnia, where Muslim Bosniaks are the largest of its three ethnic groups, holds significant cultural appeal to holidaymakers from the Middle East, something that Buroj seek to capitalize on with their largescale investment in the country's tourist infrastructure.
"The initial investment in the project is worth around ?920m, while the total investment will amount to ?4.3bn" over the next eight years, Ismail Ahmed, the company's manager told a news conference.
The project, named the 'Buroj Ozone' will stretch over an area of 1.3 million m² and include thousands of housing units, hotels and the largest shopping centre in Bosnia, Ahmed said, adding that the project will create at least 10,000 local jobs.
Located in the municipality of Trnovo which lies below the Bjelasnica and Igman mountains, the venue of the 1984 Winter Olympic Games, around 20km from Sarajevo. Ahmed said construction is scheduled to commence in April or May 2016, pending a resolution of regulatory issues and necessary permits from the Trnovo municipality, which will lease the land the Buroj for 99 years.
"The aim of this unique project is to turn Bosnia and Herzegovina into a tourism leader of southeast Europe and to put its rich natural resources at the disposal of local and international clients. Many people associate this country with the war and this project will help change that image", he said.
Since the end of the 1992-95 Bosnian war, which claimed 100,000 lives, Bosnia has fallen out of favour with foreign property investment. However, as tourism in the country continues to expand, property investors are starting to investigate opportunities in Bosnia, particularly in Sarajevo.
Tourism is now seen as an expanding industry that could provide Bosnia with a significant boost to its economy. Visitor arrivals in the first five months of 2015 were up almost 26% from the same period last year, and so it would appear that there is significant growth being experienced in the country. In fact, a World Tourism Organization study predicts that Bosnia is likely to have the third highest tourism growth rate in the world by 2020.
All of which is good to know from the perspective of the savvy property investor. Rising tourism indicates increasing yield opportunities, particularly in tourist hotspot areas and in Bosnia, the action is happening in Sarajevo.
Foreigners are showing rising interest in real estate across Bosnia and Herzegovina, Arabs and Russians in particular. Sarajevo is very attractive for Arabs who generally buy houses, apartments and land for the construction of office buildings. Apart from Arabs, investors from Syria, Jordan and Kuwait are also increasingly focusing on property investment, particularly in the luxury apartment market in Sarajevo.