Trump Takes on Tbilisi Real Estate Market
07 October, 2010
Trump Takes on Tbilisi Real Estate Market

Molly  Corso
Freelance reporter based in Tbilisi.
The announcement that American real estate mogul Donald Trump intends to build in Tbilisi has many Georgians hoping that the country’s foreign-investment woes are over.
On September 22, Trump signed a letter of intent with the Silk Road Group, a multinational development company founded by Georgians, covering the construction of a residential building in Tbilisi.

In a phone interview with, Trump’s special counsel, Michael Cohen, would not disclose the amount of the

investment, the nature of the financing or the size of the planned building. He did, however, “personally congratulate” President Mikheil Saakashvili and The Silk Road Group for choosing Trump as a business partner. “[I]f Michael Jackson is the king of pop, [Trump] is the king of real estate,” said Cohen, an executive vice-president at the Trump Organization.
At first glance, compared with New York or Las Vegas, Tbilisi, a city of 1.1 million, might appear an unexpected choice for the “king of real estate.” The city’s recent real estate boom has cooled, and Georgia’s per capita income of just $4,400 per year, the lowest in the South Caucasus, falls far below the typical Trump customer income.

Cohen, however, maintained that the “[t]here are people in Georgia who realize, just as in any democratic … country, that status is important.” Personal interviews and surveys led to that conclusion, he added. Trump’s venture would be his first-time entry into the former Soviet Union, a region often known for cut-throat competition, fuzzy tax codes and wobbly legal protection for property owners.
Saakashvili worked feverishly to help close the deal, twice visiting Trump at his New York headquarters during the run-up to the announcement.

The president’s efforts were understandable when placed within the context of Georgia’s recent experience. Over the past two years, the country experienced a massive drop-off in foreign direct investment (FDI): in 2009, FDI fell by nearly 58 percent, while total investment so far this year — $272 million — is 6 percent lower than last year. The decline is widely attributed to the world financial crisis that erupted in late 2008, as well as the country’s ill-fated August 2008 war with Russia.
Georgia has generally garnered praise for attempting to set itself apart from other post-Soviet states, in that Tbilisi has taken steps to foster a favorable business climate for Western investors. The World Bank’s Doing Business 2010 report, for example, ranked Georgia 11th in the world for its business environment, the highest rating among all former Soviet republics.
As it basks in the glow cast by the Trump deal, the Georgian government is pressing ahead with an initiative designed to stimulate investment in Georgia’s tourism industry. Specifically, the government is offering hotel developers 27 plots on 11.3 hectares of undeveloped, state-owned Black Sea-area land for $1 per plot. Under the program, overseen by the Autonomous Republic of Achara, any investor willing to invest at least two million lari (approximately $1.1 million) in a beachfront hotel zone will qualify for an array of business incentives, including free utilities and no sales or income tax for 15 years.
To qualify for the tax holiday, participating hotel projects – each having a requirement that a building cannot be taller than seven stories — must be completed by August 1, 2011.

Announcing the plan on September 11, Saakashvili promised investors the chance to “increase your money by two or three times.”
“In banks and [hidden] in your pillows, your money will not increase,” Saakashvili, sporting gold-ringed sunglasses, said during a televised event in the Acharan village of Kobuleti, the site of the prospective hotel zone. Market prices for similar property range from $60 to $300 per square meter, according to the online real estate guide
Tengiz Doidze, a top official at Achara’s Ministry of Economy and Finance, asserted that the government is willing to forego sales revenue in the hope of attracting investors who will increase employment. “The long term perspective will bring in a lot of investment and revenue,” Doidze forecast.
The proposed land is nestled in a pine forest a few meters from the Black Sea and approximately 25 kilometers from Batumi, the center of Saakashvili’s plan for Black Sea coastline development. No trees can be cut down during the construction project – a requirement that does not appear to faze interested investors.
Irkali Matkava, head of the Georgia National Investment Agency, said there has been a lot of “buzz” about the government’s offer since its announcement. Doizde said that his office has already received 10 applications — nine from Georgian investors and one from an Armenian investor in Yerevan.

Kobuleti, a small town of about 18,566 people that straddles the main highway from Tbilisi to Batumi, has traditionally been more of a locals’ getaway, passed over by large investors in favor of Batumi. Family hotels and cafes jostle for valuable space along a mile of beachfront property; cars clog the roads during the two-month tourist season.
One Tbilisi-based independent investment consultant believes that Kobuleti’s location could add to the project’s appeal since it gives investors the chance to “latch on” to the ongoing property boom in Batumi, while sidestepping market entry obstacles of property prices and taxes. “There is so much investment going into Batumi, and [it is] developing … as the Atlantic City of Georgia, the metropolitan place to go,” commented Stephanie Komsa.
Komsa, who researched Georgia’s hotel and tourism markets while working for a private investment fund, cautioned, however, that government support for the Kobuleti zone could not ensure success. Opening 27 new hotels in such a small space, and with only a two-month tourist season to work with, has inherent risks, she cautioned. “I wouldn’t say ‘Well, the government is initiating this, let’s do it.’ You have to do the same type of analysis” as for a regular property development investment, she said.

Other Stories
Inovative and reliable online shop in Georgia -
Status of Georgia as a business and tourism interesting country is growing from year to year.
Tbilisi TV Broadcasting Tower – Better than the Eiffel Tower?
It is planned to renovate the Tbilisi TV Broadcasting Tower, one of the landmarks in the capital.
Georgian Fusion Menu by The Biltmore Hotel Tbilisi
5,895,914 international visitors have visited Georgia between January and August of 2018. Compared to the previous year the number has increased by 12.2 per cent.
Advertising of gambling and lucrative games may become banned in Georgia
Advertising of gambling and lucrative games may become banned in Georgia. Those who violate the new rule would be fined GEL 10 000.
Lebanese café-lounge Beirut opens in Tbilisi
What is necessary to organize an unforgettable event? – Fun, emotions, lots of surprises, good music and delicious menu.
Georgia second among the fastest growing tourist destinations in Europe
Georgia is among the fastest growing tourist destinations in Europe. The data is published by the UN World Tourism Organization.
Bitmain launches world digital mining summit in Tbilisi, Georgia
Bitmain CEO Jihan Wu and Roger Ver, CEO of Head Speaker List featuring Circle, and Genesis Mining when Digital Mining Leaders Convene In Tbilisi on September 21-23
TBC Bank and Gazelle Finance have teamed-up to support Medical City, a leading healthcare provider in the western region of Georgia to launch the Western Regional Center Of Modern Medical Technologies.
Equiavlent to buried treasure – resources that are underused in Georgia
For 2018 the IMF Commission has forecast an annual economic growth for the Georgian economy of about 5,5%.
Does the quality of Georgian wine increase and how the export affects it
If we look at the data collected about modern Georgian wine, we will find out that the Georgian wines produced between 2015-2017 are much better in terms of their quality and Oenologic features rather than the wines produced between 2009-2011.
Japan simplifies the visa requirements for Georgian citizens
Diplomatic and economic relations between Georgia and Japan are now moving to a new phase. Recently Japan has decided to simplify the visa requirements for Georgian citizens.
M&S (Marks and Spencer) and H&M collections to be produced in Georgia
Garments manufacturer MGMTEX will start production of the M&S and H&M trendy collections from this September.
The World Digital Mining Summit to be held in Georgia
The summit is scheduled to take place between 21st-23rd September in the Hualing Hotel, Tbilisi, Georgia.
Galt and Taggart - Tourism Boom Continues in Georgia
Tourism has become one of the key drivers for the Georgian economy. Galt and Taggart has recently published research about the Georgian tourism sector in the first half of 2018.
"The worst dream for Putin is that Russians want to live in Georgia"
This year, visitors to the Adjara region would notice that there is a boom in construction in and around Batumi.
Underground gas storage facility to be built in Georgia
KfW, a German government-owned development bank signed a EUR 150 million promotional loan with the state-owned Georgian Oil and Gas Corporation (GOGC) for the construction of the first underground gas storage facility in Georgia.
New gambling rules for Georgia
Georgian lawmakers are preparing a new draft law relating to online-casinos and gambling that will seek to curb gambling addiction in Georgia.
How expensive is it to visit Georgia?
The Georgian Lari (GEL) is the official currency of Georgia and is the only legal means of payment in the entire territory of Georgia.
Trade with the EU and the Commonwealth of Independent States (CIS) has grown significantly
Trade with the EU and the CIS has grown by 26% and 33.5 % respectively, says GeoStat, the Georgian National Statistics Office.
The unemployment rate decreases in Georgia
The unemployment rate decreased in Georgia by 1,9% and amounted to 12.1% in the 2nd quarter of 2018 compared with the previous quarter,
Memorandum of Understanding to be signed between Georgia and Malaysia
According to the Georgian Ambassador to Malaysia Nikoloz Apkhazava, Georgia plans to sign a Memorandum of Understanding (MoU) with Malaysia.
“Blauenstein Georgia” due to expand in Georgia
“Blauenstein Georgia” is planning to open more shops in Georgia. It is an agriculture company that sells meat products, meat and convenience food.
The amount of Direct Foreign Investment rises in Georgia
According to the information of the National Statistics Office of Georgia, the amount of direct foreign investment in Georgia has risen
It’s going to get  harder for foreigners to get residence permit in Georgia
It’s going to get harder for foreigners to get permit of residence in Georgia.
Mziuri Park in Tbilisi to be renovated soon
It was the dream of prominent Georgian writer Nodar Dumbadze that when the original Mziuri park was constructed and opened in 1892 that it should be a park for children,
Exchange Rates
GEL Exchange Rate
Other Stories
Recently Toyota rolled out Global Campaign under this slogan that reflects the Olympic and Paralympic Spirit of Encouragement,
A couple from Switzerland combines Swiss tradition and technology with Georgian products. Their cheese is made in the Georgian mountains and sold in local stores and hotels.
It has been more than five years since the residents of Lilo village, near Tbilisi, cannot open their windows.
63 000 GEL was received by the Georgian Agro Export Group which is just a small part of the European Neighbourhood Programme for Agricultural and Rural development.
Georgian entrepreneur Guka Tavberidze, who runs his own business in the UK and does it quite well, has been invited by BBC
The grand opening of 7-star The Biltmore Hotel Tbilisi took place in Georgia’s capital on July 31.
DUSHETI, Georgia – The Georgian government and the World Bank will allocate USD 5.6 million (12 million GEL) to fund
A new Georgian clothing brand named Person has emerged in Georgian market.
Georgia is in the midst of an economic maelstrom, Euronews reports.
Situation at Georgia’s mineral water market is interesting: over the last year, the volume of export has grown by 56 percent. According to “GeoStat”, over $114 million worth of mineral water was sold
GEL Exchange
November 2018
Mon Tue Wed Thu Fri Sat Sun
1 2 3 4
5 6 7 8 9 10 11
12 13 14 15 16 17 18
19 20 21 22 23 24 25
26 27 28 29 30