Serbia, Abu Dhabi Sign $3-Billion Property Project Accord

Eagle Hills, an Abu Dhabi-based developer of international projects, signed a contract with the Serbian government to redevelop part of central Belgrade.

The Belgrade Waterfront will occupy a 1.8 million square-meter (19 million square feet) area and will be 68 percent owned by the Abu Dhabi company, while the rest will be held by Serbia, according to the government. Total built-up surface will be about 1 million square meters, including 5,700 homes, office buildings, eight hotels with 2,200 rooms and the Balkan’s largest shopping mall of 140,000 square meters.

“Nothing will remain unsold,” Construction Minister Zorana Mihajlovic said. “Everything in the contract shows that such risk, for now, according to all analysis, does not exist. Belgrade will not bear risk.”

Eagle Hills, led by Emaar Properties PJSC Chairman Mohamed Alabbar, is also planning large developments in several countries including Nigeria, Bahrain and Egypt. Abu Dhabi’s Etihad Airways took over Serbia’s flag carrier in 2013.

The plan to redevelop riverside real estate hasn’t been without controversy. While the government says it will draw billions of euros and create 20,000 jobs, opponents say the project was approved without proper planning and ignores flood and groundwater risks. A few hundred protesters were kept at a distance by police from a mansion where the contract was signed.

“Citizens have shown they won’t trust the fate of the city to shady deals between politicians and investors,” said the organizing group called “Don’t Strangle Belgrade” in an e-mail.

99-year Lease

Under the contract, Eagle Hills will provide an initial investment of 150 million euros ($163 million) for the $3 billion project. It will also provide 150 million euros as a shareholder advance and a loan of 130 million euros to the Serbian government to clean up the area and buy land it doesn’t already own, according to the statement.

In return, the Abu Dhabi developer will be granted a 99-year lease on the land. Half of the project, including a 22 floor mixed-use tower, must be completed within 20 years, according to the statement from the Eagle Hills unit Belgrade Waterfront Capital Investments LLC.

Eagle Hills became one of the Gulf’s largest developers, with billions of dollars of projects, after taking over Al Maabar in October. Al Maabar, also an Abu Dhabi developer, is building across Jordan, Morocco and Libya.

Eagle Hills is planning two hotel developments in the United Arab Emirates sheikhdoms of Dubai and Fujairah, two people with knowledge of the matter said in February. The company is also planning a $4 billion mixed-use development in the Ethiopian capital Addis Ababa, MEED magazine reported in March.

Source: Bloomberg