Urban development is about making the right decisions. This requires, first of all, market analysis which provides information about the challenges and achievements that exist in terms of urban development in the city.
Galt & Taggart has been operating in the market for years and helps all entities working in the urban field to do marketing analysis and make the right decisions. In an interview with The FINANCIAL, Kakha Samkurashvili, Senior Associate at Galt & Taggart, talked about the company’s contribution to, and future plans for, urban development.
Q: Urban development has become one of the priorities of today. What does Galt & Taggart do in this regard?
“Galt & Taggart has been working in the field of urban development for many years, and the most important thing we do is to provide the market with the analytics and all the important information it needs to make informed decisions.
In the field of real estate development and in the context of urban development today, it is very important for the investor to have the right and most up-to-date information in order to make the best decisions. This is how we see our mission, to help the market and always provide the latest information to those who are interested. For example, we publish new research on a quarterly or annual basis, which contains the latest information. We also work in the field of private orders and for investors who want any direction of real estate development in Tbilisi, be it residential, office or shopping centre, we offer tailored research, which allows them to make the right and most informed decisions.”
Q: Galt & Taggart has been actively involved in urban development tasks in recent years. What are the specific projects that Galt & Taggart is involved in?
“In recent years we have been quite active in this area and have helped several investors, for example in the preparation of feasibility studies, also in the preparation of market analytics. These were multifunctional projects that included both residential and office and commercial real estate and our role was providing information to the investor.”
Q: What specific elements of the urban agenda are particularly important for Tbilisi and why?
“Tbilisi has been developing in this direction in recent years. It can be said that we are living in a very interesting era in terms of urban development, because the attitude of both investors and consumers has changed dramatically in recent years. Let’s talk about the different subtypes of real estate one by one so that we can better understand and formulate it in one context. Let’s start with residential real estate. As a comparison, whereas 10 years ago house buyers did not have any particular preferences in terms of parking, or different infrastructure requirements, today buyers already want that included in the project where they are buying their housing. They now expect both parking and different types of infrastructure, to have everything in one project.
Developers have also become more comprehensive in recent years, so instead of just 1 or 2 buildings, we are dealing with more neighbourhood-type developments, where they offer customers not just housing, but also the complete infrastructure that is needed for a person.
In this context, I would like to single out the approval of the Tbilisi General Plan, which was agreed a few years ago, and which will absolutely change the development of the market in the coming period. This primarily involves the relocation of developers from the central districts to the suburbs, and this will continue in the coming period as well.
Today we see that there is less and less construction happening in the central districts of the city and more construction beginning in the suburbs. As for commercial real estate, if 10 years ago, for example, most of the city’s population traded in open markets and street retailers, today we have a completely different situation. People prefer to go shopping in modern-format shopping malls, which means not just buying things but also having fun.
If we look at the malls in Tbilisi today, we will see that they allow us to shop, have fun and get different types of services all at the same time.”
Q: What activities can you name as examples of support for urban development in Georgia?
“In this regard, I would highlight the general plan and the transport system. In recent years, one of the most important things that has started in Tbilisi has been the regulation of the transport system, which means the renewal of both roads and public transport. In recent years, the environmental impact has already become noticeable, indeed, the number of cars is growing at a very high percentage every year, while the population of the city is not growing so much. Consequently, we are seeing that there are more cars per capita in the city and it is becoming more and more inconvenient to drive your own car, therefore it is on the agenda to have reliable public transport and roads. We can see bus lanes being added to new streets in the city every day, which is a most important factor for urban development. Over time, as has happened in the big cities of all developed countries, it will eventually become inconvenient to drive one’s own car. For this to occur, it is necessary that the transport infrastructure, both roads and lines (be they subway or bus) be properly distributed between the suburbs and the central parts of the city, because, as I mentioned in the general plan, more building projects will start in the suburbs in the coming years. It is therefore essential that there be adequate public transport links between the suburbs and central districts of the city, where there are typically major office spaces. These trends will intensify in the coming years as the rate of economic growth increases and develops further.”
Q: What are the main challenges of urban construction?
“In terms of urban development in general, not only do the regulations change the development of the city, but also the supply side, i.e. the investors, because they have seen certain changes in the preferences of consumers.
As I mentioned, whereas consumers preferred street retail 10 years ago, today people prefer to have a single shopping space with all the different options in one place, be it shopping, fun or so on. It can also be said about the residential real estate component, i.e. people need not only housing, but also the complete infrastructure to decide to buy an apartment in this or that project.”
Q: What is your opinion on foreign investments in urban development in Tbilisi?
“Foreign investment is very important not only for urban development but also for the country’s economy in general. We have seen this many times in recent years, when the main driving force of economic growth was precisely foreign investment. In real estate, especially commercial real estate, we are actively observing that there is a lot of investment in this area and we have high hopes that foreign direct investment in both residential and commercial real estate will continue in the future.”
Q: Parking is one of the biggest problems for the population today. Are there any plans to expand underground parking or build a multi-storey European-style carpark in future projects?
“Parking is one of the most important components in the context of urban development and the transport system is already very important within this component as well. One of the biggest difficulties today is finding a parking space in the central districts of Tbilisi, and not only in the central districts. In part, this problem has been exacerbated in recent years by the fact that the housing projects that are just beginning are already set a minimum standard number of parking spaces they must provide. However, many buildings have already been built in Tbilisi, the construction of which was not taken into account. In such a case, there is usually a need for parking charges or some other form of parking. I think this will also appear in Tbilisi over time. At this stage I do not see any significant shifts occurring in this direction, but we are confident that this issue will be more or less resolved in the coming years. Public transport will also help solve the parking problem, because if the public transport is good, then more people will decide to use it. For example, people working in the central business districts (so-called white collar workers) who mostly drive themselves to work today, would definitely shift to using public transport if such transport existed. This would partially ease the pressure of traffic in the capital’s central districts, however as I mentioned, bringing it up to modern standards is definitely a long-term process and cannot be achieved in just 1 or 2 years.”
Q: What are Galt & Taggart’s priorities and future plans for Tbilisi’s urban development?
“Galt & Taggart, as in the last few years, will continue to provide the market with the information and analytics it needs to make informed decisions. We see our mission and role in this direction as providing people who want to invest with proper and high level analytics to make the right decisions.”
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