Durrës Marina, the "strategic project" raises 42 million euros from the sale of apartments in the air

The strategic project of the Durrës Yacht Marina, which was advertised as an investment of 2 billion euros, and is being developed in the area where the Port of Durrës is located today, is securing the capital for the construction of the first three buildings from the sale of pre-paid apartments, at least in the first two years.

"Durrës Marina sha", the company that is managing the strategic project of the yacht marina in Durrës, according to data from the balance sheet, has collected about 4.17 billion lek (about 42 million euros) from customers in the period 2023-2024, mainly from the sale of "air" apartments.

The data is disclosed in the company's 2024 balance sheet, where the item "Liabilities from contracts with customers" is 4.17 billion lek, or about 42 million euros, doubling compared to 2023, when it was the first year it began operating. This item, according to the balance sheet, includes: "liabilities from contracts with customers are obligations to transfer construction units to customers for which the Company has received a prepayment."

However, the company has declared zero revenue because “revenue will be recognized upon delivery of the residential units, initially in 2025.” “The company has concluded that revenue from the sale of properties is recognized at a point in time when control is transferred, generally upon completion of the property and acceptance by the customer.” Losses were 522 million lek in 2024, down from 612 million lek in 2023.

Although this is an investment that has benefited from tax exemptions, even infrastructure tax exemptions, and has received a large area of ​​free property for development, the investor, in the first two years of activity, has only raised money from the sale of apartments "in the air."

The company presented itself as an investor, but it turns out that it is collecting money from customer prepayments, which are a “significant component of financing,” as the report states. “Generally, the Company collects long-term prepayments from customers. The Company has concluded that for these contracts we have the inclusion of a significant financing component.”

The revenues collected so far appear to be sufficient to finance construction costs in 2024. The company reports in the balance sheet that construction costs for 2024 were about 3.4 billion lek, or about 35 million euros (Construction costs 1.9 billion lek; Development costs 899 million lek; Infrastructure costs for buildings 28 million lek; Other inventories 563 million lek). These costs are related to the first three buildings, A01, A02, A04, which are currently under construction.

The sale of apartments in the area where the strategic project will be developed was announced at the end of 2022.

Since then, the company has opened the sale process of various buildings several times, while the price has continuously increased, reaching over 3,000 euros/m2, from around 1,500-1,600 euros when sales initially began.

Durrës Marina is expected to open air sales for 2 more buildings; Prices exceed 3 thousand euros/m²

Not only did the sales begin without obtaining a building permit, but the contract stipulated that 40% of the value of the apartments would be paid before obtaining a building permit, divided into 20% of the purchase price to be paid within 5 days of signing the Preliminary Sales Agreement; 10% of the purchase price to be paid no later than 3 months from the date of the building permit and 10% of the purchase price to be paid no later than 6 months from the date of the building permit.

"Strategic " project

Durrës Marina Sha. was established in Tirana as a joint stock company on January 30, 2023. Its activity is the development of real estate, for various uses, in accordance with the Master Plan of the Durrës Marina company, as well as the operation and management of various business activities in accordance with the Business Plan of the Durres Yachts & Marina project.

The company has been granted ''Investment/Strategic Investor'' Status for the investment project 'Durrës Yachts & Marina', for a period of 20 years, according to the Durrës Yachts and Marina Framework Agreement between the Council of Ministers of the Republic of Albania and Eagle Hills Real Estate Development and Albanian Seaports Development Company, signed on January 30, 2023.

The property on which the project will be developed is owned by the Albanian Seaport Development Company.

Referring to the development agreement between Durrës Marina Sha and Albanian Seaport Development company dated July 19, 2023, the asset will be at the disposal of the project developer, respecting the delivery deadlines specified in the contract.

Eagle Hills Real Estate Development owns 67% of the shares in Durres Marina, while the company representing the Albanian side, Albanian Seaports Development Company, holds 33% of the shares.

Eagle Hills Real Estate Development, represented by UAE businessman Mohamed Alabbar, has raised €7 million in capital in July 2023, which remained unchanged in 2024.

The Albanian side has contributed the land where the Durrës Marina residential complex will be built. In February 2023, the Albanian government transferred to the Albanian shareholder a list of 281 state-owned properties for a total area of ​​818 thousand m2, an area that will be used for the project.

In addition to providing the land, the Albanian government will exempt the company from the obligation to pay the infrastructure impact tax and the social housing fund, which are estimated at around 7% of the estimated sales value.

In total, the construction of nearly 13 thousand apartments is foreseen (4 thousand in the first phase and about 8,600 in the second phase), while there will be only a few hotels with more than 850 rooms.

Only 280 yacht berths are planned. 93% of the planned construction area will be residential and 3.5% will be hotels and commercial areas, respectively.

The project is expected to cost around two billion euros, but only a small part of it will be financed by the capital of the main investor, Mohamed Alabbar. The majority of the residential complex will be financed by the sale of properties before their construction and eventually from other sources, such as bank financing.

The entire project is expected to generate around 3.2 billion euros in revenue over 35 years. Of the total revenue, 2.26 billion euros, or 70% of the total revenue, will be generated from the sale of apartments.

Company: Project area heavily polluted

In the 2024 activity report, the company acknowledges that it is facing pollution challenges in the area where it is developing the project, as follows:

1) Studies conducted show a high level of pollution in the beach area due to current port activity and coal storage.

2) The upper levels of the soil were found to be highly contaminated.

3) To achieve the desired beach quality, a wave model exercise was conducted, which showed that the existing beach area requires protection and land reclamation.

4) Water quality tests were then conducted which showed high amounts of solids and plant residues due to sewage discharges into the ground, further deteriorating the water quality.

"The Company is very environmentally conscious and, as a global developer that adheres to international standards, strongly believes that it is the Company's duty to protect the environment," the report states./ Monitor