Issue 1, 2018. February-March



The growing number of tourists travelling to Georgia is driving investment in construction projects: hotels and residential projects are underway in a number of areas around the country, with a focus on capital Tbilisi and popular resort destinations.

Lika Jorjoliani

Spending is up in Georgia's construction sector -- foreign direct investment in the construction industry in the third quarter of 2017 alone was $116 million, nearly as high as the total investment in the sector in 2016 ($129 million), according to Geostat, the state statistics agency.

Construction, in terms of production value, has increased significantly over the past three years, based on Geostat data from 2014-2016, the latest complete figures available.

The growth in building projects is being driven by a number of factors, according to Georgian real estate sector specialists and development companies.

More tourists, more demand

"A favorable travel and tourism scene should lead the way for consistent investment flows in the hospitality real estate market in Georgia," Irakli Kilauridze, managing director at Colliers International Georgia, told

He said there is "upward momentum" in the hotel supply pipeline in Tbilisi--including upscale brands such as Autograph Collection and Sheraton Metekhi Palace, and midscale brands such as Ramada Encore and Moxy.

Nino Kipiani, a partner Cushman & Wakefield Georgia, agreed that the developing tourism market is attracting more investments in construction and development.

Kipiani, who is responsible for coordinating the company's agency services, developing client relationships and managing key regional corporate accounts across the Caucasus Region, noted that investors are coming from "Iran, Qatar, UAE and CIS countries."
"Investors from the post-Soviet space are mainly interested in Western Georgia, not only Batumi, but other towns on the Black Sea shore. Shekvetili became a very good prospect due to construction of the "Black Seal Arena" and new tourist sites," she told

Ski resorts are also attracting more investment. Both Kilauridze and Kipiani noted several new projects in Bakuriani as well as in Gudauri and Adjara's Goderdzi: Alliance Group is investing in Goderdzi; Best Western Plus in Bakuriani; and New Gudauri, a multi-functional ski in/ski-out residential and hotel complex is being built by RED-CO, to name a few.

Maya Bichikashvili, the chief marketing officer for RED-CO Real Estate Development, said when the project started, five years ago, the territory was completely empty. Now five apart-hotels with up to 500 apartments have been already constructed, and 26 more new buildings, including international hotel brands, apart-hotels, private residences and cottages, along with various types of business, entertainment and sport facilities, will be built based on the company's $150 million, five-year development plan.

"Gudauri Resort has large potential and more and more tourists are attracted here due to its mountainous tourism...In Georgia, there is a demand for this kind of real estate, first of all from citizens of Tbilisi, then from foreigners who love Georgia and visit it for skiing. They include Russians and Ukrainians, and this year there are many buyers from Europe and the UAE," Bichikashvili said.

"In 2012-2016, investments by the company reached $45 million, and in 2017, we invested $25 million. In 2018 ,we plan to invest $50 million," she said.

Bichikashvili added that the company has already started building the hotel Radison Blu Gudauri, which is scheduled to open in 2019, and has other hotel projects in the pipeline.

The Adjara Group is also investing in the construction of new hotels around the country. The increased number of tourists and the growing number of airlines flying into Tbilisi have helped drive the tourism and hospitality sector in 2017, Executive Director of Adjara Group Hospitality Valeri Chekheria told

"This year we are planning to open two new hotels; one will be a hotel named Stamba next to the hotel Rooms Hotel Tbilisi, situated in the center of Tbilisi," he said.

He said the hotel is being developed in stages. Adjara Group is investing $30 million in the first two stages, and will make additional investments for the third stage, which will be completed by the end of 2019.

Adjara Group is also investing in building hotels outside of the capital: they are partners with GDGC in the 100-room Mitarbi Rooms Hotel, scheduled to open at Kokhta Mitarbi this summer. Total investment in the project is $12 million dollars, Chekheria said, with Adjara Group as a 50 percent partner.

In addition, they are planning a multi-year, multi-stage, $45-million dollar project in Kakheti, not far from the David Gareji Monastery Complex.

The project, named Udabno (Georgian for desert), will include a large almond plantation, a farm, two hotels and a training center for specialists in the hotel business and agriculture, Chekheria said.

So far, Adjara Group's investments in the hotel industry have paid off: Chekheria said they were at 80 percent capacity in 2017.

Creating communities

Construction and development companies have also been investing in a relatively new trend for Tbilisi: residential communities.

For instance, Maqro Construction, a major international investor in Georgia, is investing in several large residential projects in the capital - housing, schools, kindergartens and sports and recreational facilities all in the same location. Hualing Group has also made major investments in construction projects.

Cushman & Wakefield Georgia's Kipiani noted that these types of projects are gaining popularity in districts outside of the city center.

"The development of suburbs deserves attention as well (Tskhneti, Shindisi). The most interesting are the projects in Didi Dighomi and Krtsanisi," she said, noting that one such neighborhood - Tbilisi Hills - is being developed by Estonian investors around a large golf club.

"In the next ten years, the territory adjacent to the golf club will be covered with the construction of hotels and cottage settlements," she said, adding that "today Georgia is a leader among the Caucasian states, as it has very attractive investment opportunities for conducting of business and the market is loaded -- that is a plus for investing."