A preliminary Concession Agreement has been signed for the 40 year operating rights of Dubrovnik Gruz Port…
In the context of the announcement dated 16.10.2015, Global Ports Holding (“GPH”) is proud to announce that a preliminary Concession Agreement for the 40 year operating rights of Dubrovnik Gruz Port has been signed between Dubrovnik International Cruise Port Investment d.o.o. (the consortium where GPH has 75% and French based BOUYGUES BATIMENT INTERNATIONAL has 25% stake) and Dubrovnik Port Authority.
The Dubrovnik Gruz Port project comprises the construction and 40 year operating rights of a cruise terminal, shopping center, multi-storey parking lot, and a garage in the city of Dubrovnik, one of the most prominent tourist destinations in the Mediterranean. In addition to taking over the cruise operations and erecting a new cruise terminal; GPH will build and operate a shopping center in the concession area as well as a number of commercial spaces inside the terminal building and generate revenues from commercial, shopping and business premises. The total surface area subject to the concession is 28,000m2, with corresponding total length at 845m. The construction is expected to start in 2016, end by the end of 2018; and the construction only cost is expected to be c.Eur60mn. GPH is considering to finance up to 70% of investment works through a consortium of development and commercial banks.
Dubrovnik Gruz Port is located c.3km away from the Old Town, which is a UNESCO World Heritage Site and a popular tourist destination in the southern Croatia. Considered as a Marquee Port (a must-see port), the Gruz Port is the 10th largest in the world and 3rd largest in the Mediterranean in terms of cruise transit passengers, with an annual passenger number of c.1 million. Furthermore, the ongoing efforts to increase capacity of Cilipi (Dubrovnik) Airport, along with the planned direct highway connection to Dubrovnik should support the increase in the number of cruise passengers.
Dubrovnik region is one of the most outstanding tourist destinations in the Mediterranean, hosting in excess of 5m overnight stays annually, in addition to cruise passengers and daily tourists and has a relatively underdeveloped retail market, representing a considerable upside potential in the retail business. GPH aims to capitalize on the underpenetrated retail market in Dubrovnik and lack of direct competition, through the shopping mall with c.15,000m2 leasable area, which will be built in the concession area. Through the Gruz Port, GPH intends to form a similar business model to that of Ege Ports on a larger scale by integrating cruise / shopping complex; aiming to achieve a higher per Pax rental income at the Gruz Port, compared to Ege Ports’ Eur5.5 per Pax. The Gruz Port is located in the city center, and will cater to tourists and cruise passengers visiting the city, as well as locals. GPH’s goal is to create a new attraction center in Dubrovnik other than Old Town, while reducing the congestion of Old Town.
The Gruz Port is an important port in Europe, not only in transit passengers, but also in higher revenue turnaround calls, which have been increasing exponentially for the last few years. Accordingly, the new terminal building to be constructed will have the capacity to accommodate 5,000 turnaround passengers at once, as well as baggage storage facility. The Gruz Port is estimated to generate c.Eur10mn by 2018, contributing to GPH’s consolidated financials. Addition of the Gruz Port to the portfolio will further boost GPH’s leading position in the Mediterranean Cruise Port Market. GPH currently manages a passenger traffic of c.5mn (including Dubrovnik), which corresponds to a notable c.19% market share in the Mediterranean”.