The FINANCIAL — Real estate of Batumi is mostly demanded and highly invested city, with the highest Return on Investment (ROI) in Georgia according to the real estate brokerage companies Paragon, Kalasi and Beruka. Tbilisi like other Georgian cities is experiencing serious problems. Almost all constructions here are frozen.
The FINANCIAL — Real estate of Batumi is mostly demanded and highly invested city, with the highest Return on Investment (ROI) in Georgia according to the real estate brokerage companies Paragon, Kalasi and Beruka. Tbilisi like other Georgian cities is experiencing serious problems. Almost all constructions here are frozen.
“Overall Real Estate environment is improving in Georgia slowly after the recession of 2008 and 2009. Generally for all regions, 2010 was stable keeping demand and supply in balance,” says Nikoloz Urushadze, General Director of Paragon Ltd, Real Estate Valuation and Consulting.
“Slightly different situation was noticed in Adjara region and especially in Batumi where activity was higher than in other regions. The government has apparently made it a priority to develop Batumi and other resort destinations in Adjara, and the raised investments in infrastructure have positively affected prices and activity,” adds Urushadze.
According to Urushadze in Batumi flats in under construction buildings can be purchased as low as 350 USD per sq. meter with average prices at 500-600 USD per sq. meter.
“Batumi has the highest potential for development in Georgian real estate market in regions,” declares Megi Sarishvili, Public Relation Manager at Kalasi Ltd.
According to Sarishvili, the real estate market of sea resorts is developed enough, 1 sq. meter costs from 500 USD to 1500 USD.
There are companies, which offer luxury real estate for double prices – USD 3 000 per sq.m. For example, an apartment in new residential complex close to Sheraton Batumi will cost you USD 300 000 average.
“It appears that the development in Poti is at a very low level. Very low prices per square meter of residential, office and commercial properties make it unfeasible for developers to invest. There are some small industrial facilities currently under construction but activity is very low,” declares Urushadze.
Avtandil Gugeshashvili, Director of Beruka mentions that from development point, the highest potential have the following seaside resorts: Batumi, Anaklia, Gonio, Kvariati and Kobuleti. However, he believes there does not exist real estate market in the regions of Georgia.
At Beruka the highest demand for the real estate is in Tbilisi, Batumi, Bakuriani and Gudauri. As for resorts, the demand comes for Borjomi, Surami, Bakuriani, Shovi, Utsera, Sairme and Sea side cities.
“The cap rates are still low in mountain resorts due to undeveloped infrastructure. The major problems in mountain resorts are low quality service, sanitary problems, water problems (Borjomi region), lack of entertainment facilities, unjustifiably high prices compared to quality and service that has to do with low competition,” adds Urushadze.
Sarishvili says that the real estate market of mountain resorts also is developed enough, especially Bakhmaro where the cost per square meter approximately is from 400 USD.
“The greatest interest from investors is shown for Adjara high class hotel developments. In Tbilisi, middle class hotel development and premium apartment developments are also on top of investors’ list since rental rates are staying at high levels and the demand is stable.
The most demanded cities remain Tbilisi and Batumi. There is no significant activity or improvement in other cities,” declares Urushadze.
“The most demanded real estate at present in Georgia is in the suburb Gldani and in the centre Saburtalo/Vake”, declares Sarishvili.
As for today the highest ROI in Georgia for investment is old Tbilisi, Avlabri/ Mtacminda,” Sarishvili adds.
“In those cities with the high potential for tourism development yet the real estate market is not developed. However, there is high probability that the demand for real estate to grow after making investments.
Moreover, there is increasing demand on seaside and mountain resorts however, the real estate market is not developed there either,” says Gugeshashvili.
Urushadze believes the region with the highest potential is undoubtedly Adjara with the number of tourists increasing yearly.
“The competition is also seen to be increasing which should eventually affect the current low quality service. However, one of the major problems remain sanitary problems and lack of mid class quality hotels,” adds Urushadze.
“The real estate market in Georgia for today is developed, public assistance is very important for us today, the government is trying to help us by their project Dzveli Tbilisis Akhali Sitkokhle (The New Life of Old Tbilisi) and we are the twice winners of this project and hope to win the third one, this project really helped us and many other companies to survive and we are grateful for that,” declares Sarishvili.
Gugeshashvili believes that Georgian real estate market cannot be still compared to the region countries and especially to Baku where the construction and real estate market is well developed.
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