Croatia2 - Invest & Enjoy

The Croatian National Government took central control of all planning legislation in 2003, which had traditionally been held by the local cantons. This was done in order to avoid over development, especially around the coastal and island areas, and create harmony across the country. A planning committee was established to advise the government; this committee visited each and every region and island in Croatia over the next 2 years. The committee, in conjunction with Regional Governments then imposed finite zoning to the entire country. The National Plan outlining zoning is known as ‘General Urban Planning' (GUP). Planning for tourist areas with this GUP fall into the following main categories:

Each zone can only be up to 150,000 sq m , although these can be grouped to form a massed zone area. Additional laws also introduced restrict building structures for residential use within between 70 – 100m of the coastline, within ‘green field', undeveloped sites, to further protect the integrity of the beautiful coastal areas.

Under Croatian Planning Guidance any site with valid GUP enables a developer to construct on 30% of the total site area as a ‘footprint'. The number of floors/ massing is also specified within the GUP and will vary from site to site, usually in keeping with the surrounding environment. For example, if a site of 100,000 sq m is acquired, which is zoned within the GUP for T2 use, then a developer is eligible to provide for a scheme with a footprint of up to 30,000 sq m (GEA) for the use of hotel/ apartment and villas. The number of floors will be defined by the GUP. If, as an example, three (ground plus 2) floors are defined; the total development massing therefore is 30,000 X 3 = 90,000 sq m(GEA).

The investor / developer must then nominate an authorised Croatian architect to design Outline Planning (UPU), during or immediate after the Master Planning phases. UPU essentially defines how the developer is going to separate the Hotel and apartment / villa elements (for example) and link the development to all required infrastructures and services. This UPU must then be submitted to the Local Government for approval before being approved by Zagreb , to ensure that the scheme does not fall outside of the National GUP guidelines.

After UPU is approved, ‘Location Permits' are applied for. These should show the detailed position of where each building will be constructed, on site. On submission of Location Permits, detailed architectural drawings must then follow in order to show that the design complies with Croatian building regulations. Only once this has been submitted is the investor / developer provided with a ‘Building Permit'.

Construction must start then within 2 years of the ‘Building Permit' being issued. For planning purposes, the approval of Building Permits can be achieved within 2 years of purchase.

Land will only be acquired with GUP and a valid Spatial Plan assigned. The land will be acquired by Dalmatia Investments as a ‘freehold absolute' which will be approved by the legal firm ‘CMS Zagreb' which is wholly owned by an Austrian partnership of the ‘CMS European' network. CMS Zagreb has Indemnity Cover for up to €50M.

In summary, the opportunity to invest is now being realised by various global markets. With stability in the Croatian Planning Laws, at least until the next election in 2009, and the scheduled entry into the European Union, the country is set to continue to grow as a major leisure and retail location.