The FINANCIAL — Where there is need for a company that handles investments, provides a project management team and professionals in the consulting field, Archi Group is ready to provide all of these services.
The FINANCIAL — Where there is need for a company that handles investments, provides a project management team and professionals in the consulting field, Archi Group is ready to provide all of these services.
The Group is currently implementing three large scale projects in Georgia – Sunset Kvariati, Digomi Palace and Sunset Shovi. All three projects are almost completed and will be opened this year. Besides that, the company is involved in the construction of hotels and is planning to develop 3 and 4 star hotel management in the country.
“It is those who have money that buy flats”
“2012 was election year and was fairly passive in comparison to sales in previous years,” said Ilia Tsulaia, Owner and Director of Archi Group. “From our side, we have been very active in terms of implementing projects, but our customers were passive in buying the flats. This year we are expecting an increase in sales as we are already seeing high activity from customers. Since the elections we have already had an increase in sales by 50 percent,” he added.
“We are going to start six new projects this year. The negotiations have already begun. According to these six new projects, constructions will be started in Marjanishvili, Vake, Bagebi and Didi Digomi. All of them will be residential houses. Nowadays we are oriented on residential houses as since the crisis demand for office spaces has decreased. Besides residential houses we are also involved in building hotels in Georgia,” Tsulaia said.
Archi Group was established in May of 2006 and since then evolved into a company with a partnership network that goes far beyond Georgia. The Group’s services include law consulting, financial consulting and project management.
Archi Group readily solves all issues that companies might face in the stage of their early development and throughout the period of their existence. It has also implemented investment projects and is ready to help clients make profitable investments.
“Attracting investments and implementing them in various directions is our main field of work. Out of these fields the most important one is real estate. The most important thing to note is that we have managed to pass through the entire crisis without failing our customers. None of our obligations have been left unfulfilled so far and we managed this with the help of foreign investors. We were not dependent on credit from local banks. We had investments from abroad. So we went through the economic crisis, as well as the entire difficult period in the development sector, essentially without problems. Of course, profitability was not so high, but the most important thing was that we did not experience loss,” said Tsulaia.
“Another good thing is that our foreign investor partners have the feeling that the business sector in Georgia is freer today. And this is a fact. They are not afraid of being fined by the regulators. Foreign investors as well as local ones do not expect to be fined unfairly anymore. The leader of the new government is a businessman himself. He knows very well what problems the sector has and how to solve these problems. So we expect that the business sector will be supported very much. During the history of Archi Group we have made investments of USD 30-40 million. Our main partner investors are from Israel. We have partners from America and Europe as well. With them we have established a company which finances frozen building projects. We have financed the construction of five such buildings – in Vedzisi, Vake, Saburtalo, Vazis Ubani and Gonio Sun Rise,” Tsulaia added.
Q. You mentioned the problems in the development sector. In your opinion, what caused the problems and how did Archi Group manage to pass through the crisis without experiencing loss?
A. The main reason for the problems was that money received from specific projects was not spent on the same project, but on new ones. We did the opposite – even if one project gave the company a substantial amount of money we still spent it on the same project. Other companies used to start new projects with this money because they thought about gaining bigger profit. This was the mistake. It is not right when a company is selling air instead of flats. Such developers have all ended up leaving the market.
The real estate market today is much better than it was years ago despite the fact that demand is lower now and prices are lower too. The market would be much more developed if the banks gave loans easily. It does not matter whether you have good management or a satisfactory company history, the banks do not finance your business. They are not only refusing to issue credits to construction companies, but to customers as well. The banks are not issuing credits to buyers without a mortgage. They are only financing their own projects. In such a way they are creating a non-competitive environment for other developers in Georgia. That is why we are having problems with sales. Until constructions are finished banks refuse to issue credits. Meanwhile customers are too impatient to wait for the constructions to finish and so prefer to buy a flat on the secondary market.
Q. In view of that then how do you attract customers?
A. We want to make investment and project decisions to improve the well-being of our clients and partners first of all.
We encourage our customers with additional incentive offers to buy flats in our buildings. For example, buying an apartment in Sanset Kvariati means that the owner is also starting up a business and receiving a steady income for rentals. It is about having a perfect holiday and doing business at the same time. The owner will get 8-10 percent of his/her invested money (which is the cost of a bought flat) per year. But their profit should not exceed USD 3,200.
Sunset Kvariati is a prestigious hotel-type residential complex in the top location on the coast of the Black Sea, just seven minutes from Batumi, the centre of the Adjara region. The building is located on the beach, just fifty meters from the sea. Kvariati offers a wonderful beach and clear water surrounded by mountains.
We are building a 50-room, 4 star hotel in Shovi, in the region of Racha. We have bought an old sanatorium from the state which we are renovating.
We have decided to build hotels in Tbilisi as well. We are planning to develop the 3 and 4 star hotel industry in Georgia.
“A new law about regulating relations between the banks and construction companies is coming soon according to which the banks will not be able to be involved in the construction sector.”
Q. What is the price policy at Archi Group?
A. The prices of our flats in Tbilisi start from USD 500 per square metre. The prices depend on the district of course. In Kvariati the lowest price is USD 1,500. As for renting, the smallest room will cost USD 150. In Shovi, a room will cost about GEL 190. In Kvariati, sales have already started and the whole hotel will be open by 1 June.
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