Orco to build Croatian island tourist resort

Orco Property Group, through its subsidiary Suncani Hvar, has signed an agreement to develop the Objonan Riviera project. As the only island in Croatia fully dedicated to the construction of a new resort, the 54-hectare Objonan will provide Orco with the site of a full-fledged resort to be developed on the BOT (Build-Operate-Transfer) model of a 50-year duration. Orco will finance the architectural design, build the facilities and manage the site over the period of the agreement, after which it will be transferred to the regional city of Sibenik with no compensation.

On signing the agreement, Suncani Hvar is to make a single HRK 5 mln (EUR 700,000) payment to the city of Sibenik, and take on the repayment of EUR 3 mln in loans to Jadranska Banka. Orco will also pay the city a yearly EUR 500,000 construction rights fee starting in 2017 as well as 3.5-5% of the revenues made by the tourist resort starting 2013.

Orco plans to develop 65,000 m² in hotels, apartments and villas as well as sport, beach and relaxation facilities. There will also be 100 berths available in the harbour. Construction of the two-phase project is scheduled to begin in early 2010 with the first guests expected to arrive as early as 2012. The second phase is scheduled for completion in 2013. Total investment in the project is estimated at EUR 100 mln. Estimated revenues for 2014 are EUR 16 mln which are later expected to stabilise at EUR 20 mln.