MV Investment New Owner of Hotel Jugoslavija – Millennium Team Plans to Invest EUR 400 Million in Residential-Office Complex in That Location

Source: eKapija Sunday, 24.03.2024. 13:49
(Photo: Dejan Aleksić)
The guessing and speculations about which is “the one company which undoubtedly meets to conditions” for the public bidding for the property of the legal entity Danube Riverside, within which is the famous Hotel Jugoslavija, have now ended. As has been speculated for days, the new owner of Hotel Jugoslavija is MV Investment doo from Belgrade, a daughter company of Millennium Team.

Once the biggest hotel in the former Yugoslavia, where foreign and local film stars, politicians and other important persons used to stay, was sold, as part of the property of Danube Riverside, at an initial price of RSD 3.18 billion, that is, around EUR 27.1 million, which is 50% of the total value, which was RSD 6.53 billion (EUR 54.2 million).

The signing of the sales and purchase documentation (Photo: Dejan Aleksić)The signing of the sales and purchase documentation

Hotel Jugoslavija was sold as business space and a single unit, with a basement, ground floor, mezzanine and eight floors, and over 45,000 m2 of building land was also part of the offer. Also, artworks protected by the state were sold as part of the property – chandeliers, a bust and a sculpture, works of Aleksandar Zarin.

The famous sculpture in the hotel’s atrium (Photo: Dejan Aleksić)The famous sculpture in the hotel’s atrium

As there was only one bidder interested in the purchase and as there was no need to organize traditional bidding, the sale of Hotel Jugoslavija, which began at noon, ended in only a few minutes. It was determined that the interested purchaser accepted the purchase at the initial price, which was followed by the signing of the necessary paperwork.

– The legal entity Danube Riverside in bankruptcy, which also owned the hotel, has been sold. This is a standard procedure in bankruptcy proceedings. The hotel will officially get a new owner when the sales price is fully paid and when the document on it is submitted. As the bankruptcy supervisor, I am happy that the bankruptcy has ended with the sale of the legal entity, because that is the best way to monetize it, in my opinion – pointed out the bankruptcy supervisor, Ivan Cakarevic, to the numerous press teams that attended the sale event.

As he added, everything that concerns the property-legal relations and participants in that procedure will be resolved in court.

– And as for the sales price, that’s the way the law defines it, even when there is only one interested purchaser, because we didn’t know that there would be only one. The sale would be valid even if it were below 50%, but in that case, the board of creditors would have to give its approval. These are bankruptcy proceedings, there’s the estimated value, and it is offered. What if nobody wants to buy it? The essence is that everything has been done in line with the law. These are bankruptcy proceedings and this legal entity is a private legal entity. The hotel was sold by the state, that is, Dunav Osiguranje, in 2006 – said Cakarevic.

The bankruptcy supervisor did not want to say anything more. The representatives of MV Investment handed out a press release to the press teams. It points out that an initial investment of EUR 42 million is planned, and EUR 400 million in the next four years.

– With the initial investment of over EUR 42 million, we have completed the acquisition of the entire location of the former Hotel Jugoslavija. We started the process two years ago with the purchase of the 100% stake in MV Investment, which is the owner of the space where Grand Casino Beograd is located to this day. We initiated amendments to the Detailed Regulation Plan in order to be able to realize the construction of a modern residential-office complex, with a high-category hotel, in the location which absolutely deserves it after 25 years. The total investments that we plan in the next four years in this project amount to over EUR 400 million – says the press release by Millennium Team.

As the company reminds, it has operated for over two decades, and among the projects whose realization they are involved with, they highlight Belgrade Waterfront, EXPO 2027, Belgrade Subway, National Stadium… This company also owns Vranjska Banja, which it bought in 2020.
(Photo: Dejan Aleksić)

The sale was also attended by Dr Marija Obradovic of the Institute for Recent History of Serbia. Obradovic, whose field of work is economic history and the issue of privatization and the relation between privatization and the stock market, assesses that the case of the privatization of the hotel is a characteristic example of what happens to the enormous value of public property, which, as she said, has been reduced through the privatization process, thanks to state regulations.

– One of the main goals of the privatization was to develop financial capital and stimulate the operations of the Belgrade Stock Exchange, but of course, that hasn’t happened. The company which bought Jugoslavija is not on the stock exchange either. Only 0.34% of the companies which operate in Serbia are on it – she said.
(Photo: Dejan Aleksić)

The auction was also attended by Dobrica Veselinovic, a representative of the Zeleno-Levi Front political organization, who emphasized after the sales procedure was completed that it reminded him of the sale of the Beogradjanka building, when there was also only one interested bidder.

– What we have here is a well-tested manner of the state first selling property to a private entity, after which the property is subsequently sold to another private entity, in this case, a large company with a daughter company. What’s even more worrying, and we have seen citizens protesting against it, is that, several months ago, the preparation of the DRP was initiated, which allows the construction of a large residential-office complex in this location, which means that everything was known in advance and that this was merely the final act – he said.

Plans for Hotel Jugoslavija location

Let us remind that MV Investment has land of 4.5 ha in joint ownership with Danube Riverside. That the property-legal relations in this location are complicated is also shown by the fact that, since 2006, no owner has managed to resolve them. Because, the just sold Danube Riverside, let us remind, also owns the hotel building and a part next to it, whereas the owner of said casino is MV Investment, which Millennium Team itself reminds in its press release. And the land is jointly owned. As Ivan Cakarevic reminded recently, Luka Beograd (Port of Belgrade) recently initiated a court dispute against these two companies, as it claims a small part.

When it comes to the plans for this space, the study for the early public inspection of the DRP envisaged the construction of 240,000 m2, two tall facilities with a maximum height of 155 meters, 500 apartments, as well as commercial features, for this Hotel Jugoslavija location. Among other things, it is said that the transformation and urbanization of that space is also reflected in the reconstruction and modernization of the existing hotel building.
(Photo: Dejan Aleksić)

What’s not clear after the announcement of the latest plans for this space is whether the hotel, built 55 years ago, will be demolished, as is being considered according to unofficial allegations. There are no obstacles to its removal, because the hotel had been protected until a period toward the end of 2011, following which that degree of protection was removed, because, as pointed out, it had been considerably damaged during the bombing and the original interior had been changed and partially destroyed.

What is known is that, when the new plan for this space is adopted, the current plan from 2015, which, in addition to the reconstruction of the hotel building, also envisages the construction of a shopping center and two towers of up to 140 meters, will officially stop applying.
(Photo: Dejan Aleksić)

At this hotel, which used to feature 880 rooms, as the employees told the press unofficially, around 135 rooms are currently rented out on the third, fourth and sixth floors, the offices are on the first and second floors, whereas the other floors are currently not ready for use.

The fate of Hotel Jugoslavija since 2006

The company Alpe Adria Hoteli (since 2013, operating as Danube Riverside) bought the hotel for EUR 31.3 million in 2006. A fourth of the ownership share was then sold to the investment fund QS Investment, with the obligation of obtaining the building permit. The plan was to renew the hotel, build a shopping center, as well as a 147-m tower with an investment of EUR 130 to 150 million. Two years later, after the obtaining of the act on the urban planning requirements, Alpe Adria Hoteli sold another fourth of the ownership to said fun, and in 2009, the request for getting an approval for construction was submitted to the Secretariat for Urban Planning.

However, a year later, due to the lack of technical-legal documentation, the secretariat rejected the request, and the investor complained to the Ministry of Environmental Protection and Spatial Planning. This ministry returned the case to the secretariat. At the end of that year, the famous Study of Tall Facilities was adopted as well, which did not envisage the raising of facilities taller than 100 meters in the location of the hotel. In that period, QS Investment became the 100% owner of the hotel.

In 2011, the preparation of the DRP for the location of the hotel was approved, and a year later, the opening of the hotel complex was announced for June 2015. However, in 2013, a part of the space of the once famous hotel was rented out, and then a year later, Danube Riverside announced a new project with two towers and an investment of around EUR 300 million. In that period, it was also announced that Jugoslavija would become part of the famous Kempinski chain. In 2015, the DRP of Block 11 was adopted, but without any concrete changes on the site. The hotel was brough back to the focus of attention last year, when the new DRP was made available for public inspection.

Dejan Aleksic

hotel Jugoslavija Beograd
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