06/02/08
By Kerin Hope
Published: October 23 2007 02:20 | Last updated: October 23 2007 02:20
Soldiers armed with Kalashnikovs pull aside a razor-wire barrier on a pine-clad hilltop to make way for a developer’s jeep. They are guarding a prime piece of Albanian real estate: the ruined shell of King Zog’s summer palace above the Adriatic port of Durres.
The Durres municipality recently gave permission for the former palace, built in the 1930s in art deco style, to be renovated as the country’s first luxury resort.
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Alban Xhilleri, a Tirana-based developer, is putting together a €20m ($29m, £14m) project with HLL Humbert’s Leisure, a UK property consultancy, to refurbish the palace as a spa and build an extension with 50 apartments for sale to international investors.
High-end properties are scarce in Albania, the second-poorest country in Europe. The overwhelming majority of tourists are ethnic Albanians from Kosovo or day trippers arriving by boat from the Greek island of Corfu.
Albania’s undeveloped coastline is being explored by would-be investors. But the second-home market is still at an early stage of development. Growth has been slowed by disputes over title deeds to land and by the country’s lack of infrastructure, with electricity and water in short supply in many areas.
Mr Xhilleri says he wants to offer international buyers something different: properties with unique historical resonance. Investors in the Durres project, for example, will share the building with former King Leka, Zog’s son, who will own a penthouse suite.
“Foreign buyers will be able to occupy their apartments for up to six weeks a year. The rest of the time, they’ll be rented to the resort operator,” he says. Leka, who was two days old when Zog and his family fled Albania in the wake of an Italian invasion in 1939, was among the first Albanians to win restitution of property confiscated under communism. He returned to Tirana in 2002, five years after the monarchy was abolished in a referendum.
The summer palace, with a marble main staircase, parquet floors and frescoed ceilings, featured a gilded walnut throne in the main drawing room – a gift from King Vittorio Emmanuele III of Italy, who is said to have sat on it himself after Zog’s departure.
The palace was used for wedding parties under communism. It was looted by rioters 10 years ago after the collapse of a series of pyramid savings schemes plunged Albania into anarchy.
A mobile phone antenna was later installed above Zog’s attic study.
“We’re considering whether to put in a casino alongside the spa and restaurants,” says Mr Xhilleri. “It would bring in plenty of revenue, but on the other hand it might not be appropriate.”
Mr Xhilleri’s next project brings back darker memories. He has acquired a seaside villa once used exclusively by Mehmet Shehu, the communist-era prime minister who was assassinated in 1981, reportedly after a heated argument with Enver Hoxha, the Stalinist dictator, during a central committee meeting.
To the north is the port of Vlora, formerly a hub for trafficking illegal immigrants by speedboat to Italy but now on the way to becoming a tourist centre.
The villa’s setting on a rocky peninsula jutting into the Adriatic looks like “something out of a Bond movie”, says Mr Xhilleri.
The development would follow the Durres model, with only a small number of apartments designed to appeal both to Albania’s new rich as well as to investors from overseas, he says.
“There’s something exotic about Shehu’s villa, even though people have stopped caring about how the communist leaders lived. Shehu was respected as well as feared, so this place would have a certain appeal,” says Remzi Lani, a Tirana-based political analyst.
Copyright The Financial Times Limited 2008
