The FINANCIAL — Total turnover of Rakeen projects in Georgia in 2009 was 100 million GEL. This figure includes Uptown Tbilisi, Sheraton Metechi Palace and Poti Sea Port projects. In 2010 Rakeen plans to spend 5 million USD on a luxury golf course.
Construction of the course at Mukhrovani is scheduled to begin in April and the opening is planned for March 2011.
The company hired Harradine Golf AG of Switzerland to design and build Georgia’s first 18-hole golf course near the capital Tbilisi. “We are waiting for the project offer and after we confirm the project, we plan to start building. According to our preliminary calculation, the project development will need approximately a 5 million USD budget,” Gela Mikadze, General Director of Rakeen Development Georgia and Rakia Georgia, told The FINANCIAL.
Harradine Golf, a team of highly renowned Golf Course Architects, was established in 1929 and since then has designed, constructed, re-modelled and / or supervised the construction of over 200 golf courses in Europe, Africa, Asia and the Middle East.
“We look forward to receiving Harradine Golf’s proposal in March 2010. Our affiliate Rakeen Georgia will then start construction in April, and we expect the golf course to be operational by March 2011. We strongly believe in the potential of Georgia as an investment destination and are very active there with Uptown Tbilisi, the first retail destination in Tbilisi, and other developments under way. Our sister company RAK Investment Authority complements Rakeen’s real estate projects with Poti Port and Poti Free Zone as an attractive investment opportunity with full free zone benefits," Dr. Khater Massaad, Executive Chairman, Rakeen.
“Mukhrovani Golf Village will be a unique destination for golfing and other leisure activities. The Village will start with the Golf Course, with a 5-star hotel, villas and apartments to follow in the future. We trust that this beautiful project will enrich Mukhrovani’s and Tbilisi’s communities and instigate further investment into Georgia for sustainable development of this wonderful country.”
“The first step of the project is to develop the golf course with the necessary infrastructure. Hotel, villas and apartments are the next steps, which will need to accumulate more investments. I think this project will take the next 3-5 years to complete,” Mikadze says.
As for visitors, Mikadze thinks that it will be a good opportunity first of all for Georgians and foreigners living in Georgia, also for our neighbour countries – Armenia, Azerbaijan, Ukraine etc. “In the future, I predict that Mukhrovani will become an attractive golf resort for visitors from different countries,” Mikadze says.
Rakeen, the largest Property Developer in Ras Al Khaimah, which belongs to Rakia Group, started operation in Georgia in September 2006. Established in the United Arab Emirates (UAE) Rakeen incorporates Sustainable, Responsible, Eco-Friendly planning and design of world-class resorts and residential property development.
In an exclusive interview with The FINANCIAL Gela Mikadze, General Director of Rakeen Development Georgia and Rakia Georgia, gave his outlook regarding various projects of Rakeen Development and talked about the plans of the company in 2010. “For now the situation on the market is improving slowly, but at a good pace,” he says.
“I agree, golf is not popular in Georgia and a very limited number of people are familiar with this sport. But on the other hand, we never had this opportunity. I believe that lots of people will be interested in a good course and comfort, in a picturesque place, just a 30 minute drive from Tbilisi.
“The target customer segment is those from the middle to high classes of the population, as golf is a luxurious and elite sport.”
Q. Why was Mukhrovani chosen as the location for the project? What are the advantages that Mukhrovani has?
A. Mukhrovani is a very beautiful place close to Tbilisi (15km. east from Tbilisi). In 2007 Rakeen purchased around 1,000 ha of farm land there. Part of the facility is being developed for agriculture and the other part will be used for the golf course’s infrastructure.
Q. 2009 showed that the whole world and also Georgia was far from its final emergence from the global financial downturn. How was it for Rakeen development, what was the main challenge for your company last year?
A. The results of the global crisis of course could not be solved in one year, but we can really see that the economy is improving step by step. The banking sector, real estate and others have started recovering and according to specialist’s prognoses, this process will continue in to the future.
Rakeen did not stop its building processes. Moreover since 2008 we partnered with IFC (International Finance Corporation) for the Uptown Tbilisi project.
Of course there was stagnation in sales as predicted following the August war. For now the situation on the market is improving slowly, but at a good pace.
Q. In an interview with FT you stated that the August 2008 war proved to be a significant problem for you but in the end you decided to stay on, however slowed down the rate of some of your projects. Please tell us in more detail, in which stage are your projects presently and when are you planning the final completion of Uptown Tbilisi, Tbilisi Heights and Vardzia?
A. Yes, as I mentioned, it was a difficult period for our company, as well as for all segment, first of all from the sales point of view. When we mention slowing down, we just temporarily stopped works on Tbilisi Heights and Vardzia sites but are planning to continue both projects next year.
Uptown Tbilisi is in an active phase. The project includes three basic segments: a trade centre, office and residential complexes. At the end of this year the first segment – Uptown Shopping Mall will be ready to host its first visitors. The whole project should be completed at the end of 2012.
As you know, since June 2008, Rakeen took over management of Mtatsminda Park. Serious works were done there and about 6 million GEL was invested. The park was reopened in March 2009 and retains its popularity even after such a long time.
Q. Why did you decide to start new construction of a course at Mukhrovani before finishing current ongoing projects?
A. Mukhrovani Golf Course is a different type of project. It could be developed in a shorter period and for the first stage needs only very reasonable investments. Also it should become attractive and accessible for a large number of people who have no alternatives for such an activity in the country.
Q. In October 2009, Rakeen Development Georgia participated in a global four day networking exhibition, Cityscape Dubai, dedicated to the real estate industry. Please reveal the concrete results that you have seen after participation in the above-mentioned exhibition?
A. Rakeen Development participated in Cityscape Dubai and was one of the most diversified, projects presented worldwide. For Rakeen Georgia it was mostly about the country’s promotion and it has since attracted lots of visitors and investors. We established very interesting contacts and believe that a large number of them will work closely with us in the future.
Tourism, real estate, banking and all other sectors are more or less depending on each other and all of them had serious problems because of the global crisis. We still believe that tourism and real estate will recover in the next year and will be promising sectors for the future as well.
Generally investors’ dependence was changed not only towards Georgia, but worldwide. Of course we must consider the unpleasant events of August 2008, but mostly it changed because of the global crisis. In spite of this, IFC invested several millions in the Uptown project in November 2008 and interest from other investors has also been growing during recent times.
Q. RAK Investment Authority paid 65 million USD for 49 percent of Georgia’s Black Sea Poti Port in December 2008, after previously winning a government competition to develop the port and acquiring a 51 percent stake. It is also set to build an airport in Poti, which hosts the country’s only special economic zone to attract investors. What is the situation right now?
A. RAK Investment Authority purchased Poti Sea Port and is creating the first Free Industrial Zone adjacent to the port. RAKIA is also working on a project of rehabilitation and development of Poti Airport.
RAKIA Georgia Free Industrial Zone has already invested around 22 million USD. The biggest part of the works has already been completed: soil testing, clearing and levelling of the land (160 Hectares), fencing, stone pitching protection, main gates for trucks and pedestrians. The Customs Complex is currently under construction and is likely to be completed by May. Simultaneously work on sewerage, power distribution, and a telecommunication network along with road building is under way.
We are planning an official opening before the end of May 2010 and what I can tell you now is that companies from different countries will be presented there, including the UAE, Armenia, Azerbaijan, Iran, Ukraine, Turkey and Georgia. We also expect to get licenses in the nearest future from Saudi Arabia, Kuwait, India, Pakistan, China and the USA.
Q. What are your company’s plans for 2010?
A. Rakeen Development is actively working on the Uptown Tbilisi project and plans to open its Uptown Shopping mall at the end of this year.
New amusement rides, like the Giant Wheel and Roller Coaster, will be delivered and opened in Mtatsminda Park soon.
Rakeen also plans to start working on the Mukhrovani Golf course project.
Rakia is working on development of Poti Sea Port and we can already see the positive results. Very soon a new terminal will be opened. Also two new berths will be built this year.
RAKIA is actively working on FIZ development and expects official opening in May 2010.
RAKIA will also start working on rehabilitation and development of Poti Airport.
I think that’s a good “minimum” for 2010 and sincerely hope that all our positive prognoses will be realized.
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