99‑Year Lease and €35bn Promise: The Montenegro Coast Deal That Shocked Europe

A rushed deal, a coastline at stake and what it means for real estate Montenegro

The agreement between Montenegro and the United Arab Emirates has landed at the centre of a national crisis over property rights, environmental law and how foreign capital shapes coastal development. For anyone watching the real estate Montenegro market, the headline figures jump out immediately: a proposed 99‑year lease, around 12 km of Velika Plaža (Long Beach), and a government claim of €35 billion in investment. Those claims are why buyers and investors abroad should pay attention: this is not a routine coastal resort project; it touches procurement law, constitutional safeguards, and a fragile ecosystem that supports dozens of endangered species.

A short hook: what happened and why it matters

The Montenegrin government, led by Prime Minister Milojko Spajić, fast‑tracked two agreements with the UAE using an urgent parliamentary procedure and a now-infamous WhatsApp vote. One of the accords covers economic cooperation; the other covers tourism and real estate development. Together they give UAE investors extraordinary legal privileges that alter how land can be selected, sold or leased. President Jakov Milatović returned the tourism and real estate agreement unsigned after public uproar, forcing a second parliamentary vote. That political drama is important for anyone tracking the property market in Montenegro because it signals legal uncertainty, reputational risk, and possible lengthy litigation — all of which affect asset values and returns.

What the agreements actually allow: a legal shortcut to land

Reading the Agreement on Cooperation in Tourism and Real Estate Development is like finding a fast lane through Montenegro’s public procurement and planning systems. Key elements include:

• Exemption from both countries’ public procurement and tender laws for UAE investors.
• The possibility to select land parcels including mountains, beaches, river and lake banks for development and privatization.
• Legal latitude that critics say could be used to expropriate land or override existing environmental protections.

The practical effect is this: an investor backed by the UAE can negotiate directly with government bodies and avoid normal open tendering procedures. The agreement explicitly removes routine safeguards such as competitive bidding and public procurement oversight. In plain terms: the rules that regulate who builds what, where, and how can be bypassed.

Velika Plaža: the core project and its scale

Velika Plaža, or Long Beach, is the core asset in the proposed plan. Important facts from the public record include:

• Length: about 12 km — it is one of the last wild coastlines in the region.
• The project would involve a 99‑year lease of parts of that coastline.
• The investor most prominently associated with the plan is Mohamed Alabbar, known for projects such as Belgrade Waterfront.
• The government has publicly described the deal as bringing €35 billion in investment and stated the land would be handed over for free.

Alabbar’s stated ambitions include a megayacht port, an airport, shopping centres, luxury hotels, and a high volume of apartments for sale. Observers note this mirrors the “cities within cities” model used elsewhere, where residential units are sold before full construction and political oversight is limited.

Environmental stakes: species, dunes and a fragile delta

Velika Plaža is not a blank canvas. The beach and the adjacent Bojana River Delta and Solana Ulcinj wetlands are among Montenegro’s most important ecological zones. The facts in the public dossier are stark:

• Out of 48 endangered bird species listed on Montenegro’s Red List, 35 species — or 73 percent — are found in the Bojana Delta area.
• Coastal dunes present only in this region are habitat for protected species and provide coastal protection against storms and erosion.

Transforming this area into a high‑density, luxury tourism and residential complex carries immediate environmental risks:

• Loss of nesting and feeding grounds for migratory and endangered birds.
• Disruption of wetland hydrology that maintains water quality and soil stability.
• Increased erosion and long‑term vulnerability to sea level rise.

Environmental law and planning instruments cited by critics as being sidelined include the National Strategy for Sustainable Development, the Spatial Planning Strategy, the Nature Protection Act, and the Environmental Impact Assessment Act. Activists argue that the agreement violates the Aarhus Convention, which guarantees public access to information and public participation in environmental decision‑making.

Political procedure, transparency and the rule of law

The way the deal moved through official channels is as consequential as its substance. Key procedural facts:

• The formal signing occurred on March 28. Evidence suggests commercial negotiations were well under way earlier: by March 11, Alabbar had reportedly already won bids to lease sections of the beach.
• The Montenegrin Assembly passed ratification under an urgent procedure during a late‑night session after a WhatsApp vote among MPs organised by the prime minister.
• President Milatović returned the agreement unsigned amid public protests and legal concerns; a second vote is expected.

Legal experts and NGOs point to multiple breaches: bypassed public procurement, inadequate environmental assessment and insufficient public participation. That creates not only political backlash but also legal fragility: contracts awarded under flawed procedures are vulnerable to annulment or long court challenges, which can delay projects for years and create stranded assets.

Investor profile and precedent: why Mohamed Alabbar matters

Mohamed Alabbar is not a generic developer. He is the figure behind Belgrade Waterfront and several other high‑profile urban projects. Two points from precedent are relevant for potential buyers and investors:

• In Serbia, a 2015 deal gave away 1.77 sq km of prime land to the investor; the state now owns 32 percent of the project and has received €9.7 million in dividends to date.
• Those projects have been criticised for opacity, frontloaded sales of residential units, and political deals that limit public oversight.

Investors should watch two mechanisms often used in such projects:

• Pre‑sale financing: selling off‑plan units to fund construction and reduce developer risk.
• Use of tax and planning incentives that shift long‑term returns to private actors and leave public budgets with limited upside.

These models can generate significant short‑term construction activity and jobs. They can also produce long-term governance problems and weak public returns on public assets.

What this means for property buyers, overseas investors and expats

We all know headline promises can seduce buyers.