Georgia – Architecture, Construction, and Engineering Services (ACE)Georgia - Construction
New construction and renovation in Tbilisi and Batumi and construction of the Baku‐Supsa, Baku‐Tbilisi‐ Çeyhan, and Shah Deniz pipelines have led a revival of the construction industry in recent years. Other energy related construction and rehabilitation projects are under consideration. In addition, necessary upgrades of transportation and tourism infrastructure will continue to create demand for construction services and building materials for the near future.
Numerous hotels have been built or are under construction in Tbilisi, Batumi and Kobuleti along the Black Sea coast. Commercial banks with new mortgage lending and joint projects with construction companies are playing an important role in the real estate market’s development. Construction standards are undergoing reforms. The property will be developed by the Silk Road Group (SRG), a Georgian conglomerate whose businesses range from transportation and telecommunications to banking and real estate. In May 2015, Hilton Hotels opened a 247-room hotel in Batumi and a 165-room Hilton Garden Inn is currently under construction in Tbilisi. In addition, Marriott International will open its third hotel under the flagship Marriott-Moxy brand in Tbilisi by 2017.
The Georgian Co-Investment Fund (GCIF) announced in March 2014 its plans for a $1.3 billion multi-faceted development project in Old Tbilisi involving multiple hotels, retail spaces, and other commercial real estate. The respective project named Panorama Tbilisi has been designed and is awaiting implementation.
The Georgian Government announced a tender for the construction of deep sea port and Free Trade Zone north of Poti in Anaklia to expand the overall capacity of Georgia’s ports and the Caucasus transit corridor. After a subsequent bidding process the Conti Group, a U.S.-based global developer and builder of capital-intensive assets founded Anaklia Development Consortium together with the Georgian development company TBC Holding, and won the tender. Conti is teamed with leading port designer, Moffatt & Nichol. The $3.7 billion project, toward which the government will contribute $100 million, will have an initial capacity of 7 million tons (7.7 million tons), but is designed to handle 100 million tons when completed in 2020 or 2021. The port is expected to handle its first shipments starting in 2019. The project also involves modernizing the rail network of Georgia and Azerbaijan, as well as Turkmenistan, Uzbekistan and Kazakhstan, located on the other side of the Caspian Sea.
Significant reforms have been carried out in recent years to simplify the system of issuing permits in the construction sector, and construction businesses are now permitted to use the technical regulations of the OECD and the EU member countries for their construction projects. The government has also eliminated the need for construction licenses and has simplified the process for the issuing of construction permits. The government and municipal authorities further facilitated and liberalized the paperwork to connect newly built construction projects to utility services.
There are a number of reputable construction and development companies in Georgia. A list of companies can be found via the Georgia Business Directory.
In architectural design and technical solutions, local companies still generally rely on foreign specialists. It is common practice to solicit the provision of certain services for major construction projects through international tender. The Government of Georgia has initiated several projects for the rehabilitation of the old city of Tbilisi, with the participation of several banks and developers, to stimulate the construction sector. Georgia depends heavily on importing construction material. Locally available materials include cement, wood, and concrete. Resources such as tiling materials, roofing, and exterior‐interior design staff are primarily imported from Europe and Turkey. USAID’s Economic Prosperity Initiative is working to develop Georgian production of basalt and perlite products for use in construction.
Despite the recent slowdown of previously soaring real estate prices, demand is still growing, especially for commercial development and office space. Competition in residential construction, particularly apartments, is likely to intensify.
ACE OpportunitiesThe modest growth of the middle class and easier access to credit has increased the demand for quality housing, corporate/business infrastructure, and real estate in general. Prices have increased by 200 percent for residential and 300 percent for commercial real estate since 2003. Demand is still expected to grow in the next few years. Georgia is located in an active seismic zone, so firms with expertise in building to standards that improve resistance to earthquakes are in demand. Tbilisi and other Georgian cities such as Batumi and Kutaisi feature many buildings in the Art Nouveau architectural style in need of significant rehabilitation.
ACE ResourcesGeorgian National Investment and Export Promotion Agency
Ministry of Economic Development
Tbilisi Yellow Pages ‐ Construction and Real Estate Section
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Georgia Design and Construction Trade Development and Promotion