The FINANCIAL — Tiflis Development, the local Kazakh-Georgian Developer intends to invest millions in 2008, company Director says.
The FINANCIAL — Tiflis Development, the local Kazakh-Georgian Developer intends to invest millions in 2008, company says. The Tiflis Business Centre is going to be the most expensive project compared to the company’s ongoing constructions. The FINANCIAL interviewed Shorena Darchiashvili, Tiflis Development director regarding the company’s major project Tiflis Business Centre and the construction business outlook evaluation in a global sense.
Q. The construction business is regarded to be the second leading sector in Georgia after banking. Considering your own experience, could you name the major factors conditioning the sector’s leadership in the market?
A. Since 1996 there’s been a boost of development of the construction business in Georgia, which is conditioned by the growth demand obvious in the consumer market. Though demand meeting dynamics is pretty high, the local market is still far from being fully saturated.
The construction sector in Georgia remains an outstanding success regardless of increased prices. The motivation, in the case of housing estate, for acquiring an apartment could include the necessity for expansion or starting up a new family life. As for office estate, it is natural that companies become eager to run businesses in their own offices at a desired convenient location and with modern infrastructure. Though there’s a particular segment of people who consider the issue the best means for capital investment.
Another factor conditioning a growth demand on the new constructions is the intensified mortgage offers from Georgian banks. The more stable and growth the country’s economy, the better developed the construction sector.
Q. Taking into consideration the company’s name Tiflis Development, are you focused only on the capital rather than the regions?
A. At this point the company is working on three major projects in Tbilisi. In the future we plan to launch new large-scale interesting projects in Georgia’s resorts with the aim of a focus on tourism.
Q. If asked for a brief introduction to Tiflis Development, what would be the concrete projects that you’d remember?
A. The most significant project the company is in charge of the implementation of at this point is the Tiflis Business Centre in Saburtalo, just behind the Sports Palace. It’s the most expensive one we’re implementing today. Although in the future we have larger-scale plans to develop.
We see this very area of Saburtalo as conveying great potential for becoming an important business centre. Tbilisi City Hall has just moved in to a nearby building, which is only 350 meters away from the Tiflis Business Centre, a McDonald’s is also soon to be opened right in front of the Sports Palace.
The infrastructure development considered by the project makes Tiflis Business Centre even more attractive. Parking is available underground the building as well as in the surrounding area for visitors to the centre.
The building conveniences include: modern heating, conditioning and ventilation systems and the installation of high-class elevators. The lobby and elevators will be provided by a constant electricity supply. A special security system will be in charge of the safety of the area.
Additional facilities go as far as: conference halls, a gym and a buffet. As for the service issues, office owners will be able to take advantage of translator and notary offers. Tiflis Service with provide the building with technical and sanitary services.
Besides Tiflis Business Centre we plan to launch another business centre on Belinski St. Although this project is a smaller one, the same high quality technologies will be used to develop it. Another difference about this project is that the estate will be rented out instead of sold there.
There’s also one project which we’ve already started the sales of and another one, which we will start sales of by the end of the year.
Q. What’s the company’s price policy like and how competitive is Tiflis development in this respect?
A. We try to operate a golden rule principle and consider both: market prices and project
rentability. We’re negotiating with a bank and soon our customers will be able to enjoy long term on credit acquisitions.
In the Saburtalo district prices start from USD 900 sq.m for housing estate and for office estate the starting price is USD 1 500 sq. m. As for commercial estate, it’s not for sale at this point.
Q. Considering the case of Redix, do you think selling fully renovated and furnished apartments could be commercially beneficial for a developer?
A. I would welcome the Redix initiative. Indeed, selling fully renovated estate has lots of advantages but still it’s targeted at a particular segment of people. As for office estate, in this case we provide a full renovation offer. For those who prefer doing renovations on their own, concrete terms can be defined.
Q. Which companies do you see as your direct competitors on the market?
A. As for competition, we’re all competitors in a kind of indirect sense. Though due to the specific features of the sector, the direct competitors are those who conduct constructions next to a project you’ve launched. In this case customers take into consideration price, payment system, conditions offered by a particular developer as well as the brand’s prestige and reputation.
Q. Do you operate your own construction company or which companies do you cooperate with in this respect?
A. Tiflis Development has its own construction company- Tiflis Building. Besides, we also have our own concrete factory and hence, quality monitoring is all in the company’s hands.
Tiflis Development has been active in the Georgian market for one year already. The company was founded by Kazakh-Georgian investments. At present the initiative group includes: Tiflis Development, Tiflis Building and Tiflis Security. Soon another company- Tiflis Service will serve all the buildings launched by Tiflis development.
Q. Considering the growing prices in the sector, what’s the outlook of 2008 for the construction business in Georgia?
A. The growing prices depend on the increased prices of construction materials and the adoption of the latest technologies. Companies are saving no effort in developing new modern standards in order to meet market growth requirements. As for the quality, if there’s a stable business environment and dynamic economic growth, no concern need be raised in this respect.
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