The FINANCIAL — The demand for commercial spaces is increasing slightly, as brand companies are starting to close their retail outlets in the major districts and avenues and move to shopping malls and commercial places.
The prices for commercial spaces will be growing by approximately 15-20% due to increased demand according to Axis Shopping Centre and Tbilisi Central representatives interviewed by The FINANCIAL.
“There is an increased tendency of international brands to move from central districts or to directly open at Axis Shopping mall. People prefer to have all the services combined in one place and consequently the brand companies are switching to a more flexible system for their clients,” said Zura Chikviladze, General Manager of Axis Shopping Centre.
Axis Shopping Centre has two floors and according to Chikviladze, 90% of the first floor is already rented out or sold, with 20-25 international brand shops already operating at the centre. Moreover, as he declared by the end of September they plan to rent out the whole territory.
“Some companies first prefer to rent places and observe the situation carefully, and only then purchase the place,” Chikviladze said.
The total territory managed by Axis Shopping Centre is 5,000 square meters. Out of 90% of territory on the first floor 65-70% is rented while the remaining 30-35% is sold.
The average price per square meter is 25 USD plus VAT for renting at Axis. The more territory is rented out the less the price per square meter, noted Chikviladze. The average selling price per square meter is 2,000 USD.
Tbilisi Central, one of the largest shopping malls located in the building of central station has total territory of 40,000 square meters, occupied net rentable area of 19,416 square meters. Tbilisi Central does not have on sale any commercial or retail spaces.
At Tbilisi Central 70% of the space is already rented out. The average price per square meter is 30 USD plus 5 USD service charge and plus VAT (18%).
Redix, one of the leading development companies in Georgia has already sold 1,600 square meters of Business Center on Vazha (BCV), from the total 6,700 square meters of territory managed. Moreover, the company has already rented 4,800 square meters, according to Mzia Sharashidze, PR Manager at Redix.
The renting price at BCV varies from 2,500 USD to 4,000 USD. As Sharashidze declared the renting price has been constant for three years already and Redix does not intend to increase the price further.
For businesses Redix offers A class, B class and C class type business centres. There is a wide variety of choice according to budget.
The price of A class offices on Tabidze 1 ranges from 35-60 USD in Tbilisi, while the Kazbegi 47, C class the average price is 10 USD per square metre.
According to Sharashidze, from the total space of 5,000 square meters on Kazbegi street, the total territory is occupied by tenants who have not changed during the last few years.
“From spring we have seen increased tendency of renting prices in the market, which is due to the economically stable environment. We see huge interest coming from international investors. According to the current forecast the renting fees might increase by 15-20% further. Moreover, the selling price might also be increased however it would not be significant,” Chikviladze said.
“Rental prices are changing according to demand on the market; several new franchises came to the Georgian market in the last six month. We think that the demand will increase and accordingly prices will grow,” said Dea Matchavariani, Marketing Manager at Tbilisi Central.
Moreover, according to the new rule, individuals while renting a house should register at NAPR – National Agency of Public Registry, and pay taxes to the Government, which consequently means that the price of even renting houses will increase by at least 18%. (VAT)
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