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Retail Market Shifting From Outdated Buildings to Modern Shopping Centers

EEA Real Estate Forum & Project Awards 2017 — the Forum and the Award for projects in the real estate to countries of Eastern Europe is going to be held on November 23 in Kyiv, Ukraine.

Caucasus Business Week has talked with Irakli Kilauridze managing Director of Colliers International Georgia who is invited as an expert jury member for the Forum and Awards organized by Ukrainian Real Estate Club.

What are the top trends in the real estate market in CIS countries and how different practices do we have compared to US and EU?

Despite the uncertainties in the markets of CIS countries investors are interested in the value retention in the long-term. For commercial real estate sector in CIS countries, the volatility of the exchange rate remains the key risk factor. Recently, investors seem particularly interested in the retail sector. In Q1-Q3 2017, retail assets amounted to 37% of the total investment value in the Russian real estate market. Three retail centers are announced to open in Q4 2017 in Kiev, Ukraine.

Environment is more attractive and safe in the CEE. Although Poland and Czech Republic remain the leaders, capital flow is directed to secondary cities rather than the capital cities. Sentiment towards Hungary, Romania and Slovakia is also favorable.

What does it mean for Colliers International Georgia, and for you personally, to participate at the EEA Real Estate Forum for the second time?

Colliers International Georgia regularly participates in the influential real estate forums, conferences and exhibitions such as: MIPIM, MAPIC, ExpoReal, EEA Forum. Joining such a large real estate business forum is extremely important for us in terms of networking opportunities with investors and potential business partners. The EEA Real Estate Forum is a platform where real estate professionals and decision makers have the possibility to gain valuable contacts and discuss ongoing projects and trends on local markets.

What was your experience from the last year’s forum? Did Georgian real estate market attract attention from foreign investors and started negotiations to invest in Georgia?

We had a good chance to exchange contacts with some foreign investors from different countries. We still have ongoing negotiations with some of them.

What are your expectations this year? And how will Georgia be represented on the event?

Traditionally, I have an honor to be invited as an expert jury member for Eastern European Real Estate Forum and Awards organized by Ukrainian Real Estate Club. In addition, this year Colliers International Georgia took a challenge to participate in the Awards as a nominee for “Consulting Company of the Year”.

How important it is for Georgian companies to take part in such international events?

As I have mentioned above, real estate forums and international events create ideal conditions for networking, exchanging experiences, sharing current trends, innovations and best practices in the real estate market.

What is the Georgia’s development potential in the real estate sector and how is Colliers International Georgia contributing in it?

Real estate market in Georgia has a stable development course. Residential market is one of the most active sectors of real estate market. On average, 75% of total transactions represent the residential sector. Retail market is shifting from outdated buildings to modern shopping centres. Since 2012, 10 new modern shopping centers have opened and few more are under the construction. The Hospitality market in Georgia is fueled by a consistent growth of tourism sector. In 2016, the number of international arrivals exceeded 6 million. The government is supporting the hospitality market by improving infrastructure, and implementing policies to support business growth and attract investment.

Colliers International Georgia provides bespoke valuation, development, and brokerage real estate services which are based on the research, and local and international market expertise. Our valuation team can provide a reliable assessment of property value which will ease the client’s decision-making process. Our development consultancy team can resolve complex real estate challenges and offer comprehensive development plans for mixed use developments. Our brokerage team helps clients to lease or sale real estate to advance their business goals.

Along with housing finance, what kind of opportunities do you see in rentals?

Apartment rental Industry is still in the early stage of development in Georgia. Homeownership rate is around 93% in Georgia, which is higher compared to countries in the Western Europe. It’s important to note that there is a rapid growth in Airbnb listings in Tbilisi. As tourism sector continuous to grow Airbnb market is expected to expand.