Wealthy Arabs Buy Slice of ‘Heaven’ in Bosnia

13. May 2016.12:28
Bosnia is becoming an attractive destination for Arab and Gulf state visitors, many of whom are buying real estate – but while some welcome the influx, not everyone is delighted.

This post is also available in: Bosnian

As the summer tourist season edges closer, Bosnia and Herzegovina is preparing for a fresh arrival of Arab tourists who have fallen in love with the country, especially with the clean water and mountain air.

As the influx approaches, the airport, streets and malls of Sarajevo are filling up with advertisements for real estate written in Arabic.

In one of the most popular hotels in the Ilidza district of Sarajevo, the Hotel Hollywood, a dark-skinned middle-aged man sits in the lobby beside a sign of the AlAyyad company.

Ayyad Salem has been coming to Bosnia for years and recently started a real-estate company here, he told BIRN.

“The only way for me to buy property [in Bosnia] was to open a company, so I bought real estate, which I will now rent or sell,” he said.

“My brother, relatives and neighbours have all bought properties [in Bosnia] which they will use during the summer through my company,” he added.

Bosnian law forbids foreigners from buying property directly without registering a company. That has only increased the number of new Arab-related investment companies in the country.

Asked why so many Arab tourists come to Bosnia and Herzegovina these days, Salem grinned and said: “Bosnia is a country of beautiful regions, nature, rivers, mountains and the people are so nice.

Mirela Varagic, director of the Nebo-Tours tourist agency, said she had a lot of Arab clients last summer and hopes that her company will open a direct charter line to and from Dubai this summer.

“I have talked to many of them about Bosnia and Herzegovina. They say they didn’t know they don’t have to die to see heaven!” Varagic said.

Aside from its natural charms, Bosnia is a cheap destination for wealthy Arabs.

“Mostly middle class people are coming,” she explained. “They can live her for a week on money they spend for a day living in Dubai. Imagine going to a holiday and saving money!

“They also don’t have to worry about any pork in their food,” Varagic noted, obliquely pointing to the fact that Sarajevo is an overwhelmingly Muslim city.

Salem makes the same point about religion. “Our wives are free to cover themselves [in Muslims veils] without fear of being judged,” he noted.

Salem said there were other reasons for the large influx of Arab tourists, such as the fact that there is no need for visas.

“Bosnia and Herzegovina is cheaper than other countries – for instance England and Switzerland – where many Kuwaiti citizens go and buy real-estate,” he said.

So many Arabs spend their time in Ilidza, near the Hollywood Hotel, that some street signs and other signs in Ilidza have been translated into Arabic.

In a nod to their many foreign Muslim clients, restaurants, cafes and fast-food joints remind customers that their food is “Halal”.

In the coffee shop of the Hollywood Hotel, even in April, about half the guests are from Arab states. One family sits beside a number of suitcases.

Asked where they come from, they reply that they are from Kuwait. They are waiting for a pickup to the airport, having spent a spring vacation in Sarajevo. This is their second visit and they loved every moment, apparently.

“This country is amazing – the nature, the shopping, the food… It’s all perfect,” the father said.

He added that his family will be looking to buy property in Bosnia in order to be able spend regular vacations there.

The mayor of Ilidza municipality, Senahid Memic, is delighted. He told BIRN that he had “opened the door to Arabs in Ilidza” and expects many investors from the region to start businesses.

“They are buying real estate in order to come here during the summer because it is too hot in their own countries at that time,” he remarked.

“Here they have nice natural resources and they enjoy it. Some countries, like England, charge annual taxes on real estate, even if you don’t use the property all year. Here, we don’t have that,” Memic said.

For all of the mayor’s optimistic announcements, not all Bosnians welcome the influx of Arabs and their money.

“Each investment is good, but we need to check the source of funding… we do not know the source of this money from Arab countries and that worries me,” one Sarajevo citizen told BIRN.

Two younger students sitting in front of the Academy of Performing Arts said that the flow of Arab money benefited the politicians but not ordinary people.

“All they invest is in shopping malls – but our people don’t have enough money to buy things there… All they do is support the politicians,” one of them said.

Some Bosnians, especially Serbs and Croats – who are not Muslim – worry about the growing influence of Muslim Arab culture.

“These Arabs came and they have their own rules,” one bystander said.

“I know a woman who had a problem with an Arab and people came from their embassy… If this continues, we will not be able to tell them anything,” he said.

“It hurts that they want to have such influence on our territory. I want to know who is selling this country to them.”

Data from the Bosnian state agency for foreign investments show that, despite talk of big investments, Gulf state countries are not important investors in Bosnia.

This is despite announcements of projects worth several billion euros, which should have started this year.

“According to the Central Bank, the total investments of the Arab countries – Qatar, Oman, Saudi Arabia, United Arab Emirates, Bahrein and Iraq – by the end of 2014 was 214.7 million euros, which is about 3.7 per cent of the total annual foreign investment influx,” the Agency confirmed.

However, in the past few months construction has begun on three large-scale real-estate projects.

These are the Sarajevo Resort in Hadzici, the Poljine Hills above Sarajevo and the luxury tourist Buroj Ozone in Trnovo.
Passing through Osenik village uphill, one reaches an unusual sight for Bosnia, a construction site of more than 200 villas and four buildings on 160,000 square metres with an artificial lake.

The investment is worth more than 24 million euros and the complex is designed to host 1,125 guests,

Machines and workers, mostly Bosnian, are to be seen all around, finishing the white villas. Some have been finished and bought while others are still being constructed.

The complex has a prayer site and a Halal restaurant. Everything is still closed, awaiting the first guests.

A handyman, putting in the air conditioning and curtains in a finished villa, says the arrival of the Arabs is good for Bosnia’s economy.

He revealed that the villas are being constructed so that the lower section houses the maids and the upper section is for the families. This is because many wealthy Arab clients are expected to travel to Bosnia with their servants.

“I will earn money here and my people will also earn money. All these houses will have to be maintained, so others will earn money,” the worker said.

However, academic Esad Durakovic said he feared that Bosnia and Herzegovina is selling its resources off cheap.

“I can guarantee we will have problems, if not now, then in ten to 15 years,” Durakovic opined.

Significantly, he declined to speak more plainly, claiming that after previous statements in which he criticized Arab investments, he had received threats.

The Bosnian capital is also to be home to the Poljine Hills settlement, which is a ten-minute drive from the center, above the city.

This neighborhood is being constructed right above the city in the hills with amazing views over Sarajevo.

More than 200 houses will be built there under an investment of the Al-Shiddi Trading Company from Riyadh in Saudi Arabia.

The locals living near Poljine Hills are mostly happy with the idea of having wealthy Arabs as their neighbours.

“I don’t mind Arabs or Bosnians buying these houses, so long as people live here. We are happy because this part of town was empty before,” a local shopkeeper said.

The largest Arab investment, planned for this year is the tourist centre called Buroj Ozon which will be built in Trnovo municipality near Sarajevo, underneath the Bjelasnica, Igman and Treskavica mountains, on more than a million square metres.

The Trnovo municipality originally leased the land to the Buroj Property Development Company from Dubai for 99 years.

This was later changed and the municipality sold the land completely. Buroj told BIRN they are not ready to discuss the terms of the purchase.

This company’s sales supervisor, Semir Hasanovic, told BIRN that the site is so valued because of the pure mountain air.

“In former Yugoslavia, athletes came here to train. The air is clean, it’s all natural and people from the Gulf want this,” he said.

“We expect 80 per cent of visitors to be tourists and the rest will be senior citizens needing spa treatments,” Hasanovic added.

Some of the villas on sale at Buroj Ozon will go for more than a million euros. Apartments, malls, hotels, a spa hospital and a rail to the local mountains are also planned. Construction is expected to last five years.

The apartments were supposed to be offered first to Bosnian citizens, and then to buyers from Arab countries under different prices. However, Buroj has since changed this plan.

Many are deeply skeptical about such investments. But Ayyad Salem says that Bosnia is so attractive for Arab investors that no new project will fail. “Bosnia is a fantastic country and we have money,” he concluded with a smile.

    Mirna Buljugić

    This post is also available in: Bosnian