By Redix Real Estate Developer and Asset Manager

Transcription

1 Georgia: a real estate destination to itself Overview of country's real estate markets & investment opportunities By Redix Real Estate Developer and Asset Manager

2 March, 2011 S&P Ratings Services and Fitch Rating revised their outlook on Georgia to positive from stable GDP growth of an estimated 6.4% in 2010, driven by a recovery in export growth and a rebound in credit growth to the private sector S&P expects the Georgian economy to recover 5.0% and 6.0% GDP growth forecasted for 2011 and 2012, respectively on extension of public sector investment in infrastructure, energy, agriculture, and tourism. The fiscal deficit narrowed sharply from its 2008 peak and S&P expects it to fall below 4% of GDP this year Georgia's external performance is expected to improve, reducing external financing needs and inflationary pressures BCV,71 Vazha-Pshavela Ave, 7 th floor Tbilisi, Georgia Tel: ( ) ; Fax: ( )

3 Georgia: real estate demand factors Economic factors: GDP on stable track 2011 year when FDI starts to recover according to NBG, BoG, EBRD, and rating agencies Since Q1 of 2010 banks are lending again, business as usual, mortgage rates historic low Average deposit rates slide down to real estate boom lows (period of ) Employment, income growth and consumer spending recover well Supporting demographic trends and increasing international visitations Manufacturing and trade (including retail trade) recovering Government policies: Heavy infrastructure investment agenda: Roads, hospitals, education, municipal infrastructure, airports, hydro energy, master planning, public security, tourism infrastructure, etc Regulation: laid ground for sophisticated real estate market Competitive tax regime 2011 Ease of Doing Business: Global ranking 12

4 Georgia: real estate demand /supply Country City Year of Census Number of branded hotel rooms per 1000 Croatia Zagreb Serbia Belgrade Estonia Tallinn Lithuania Vilnius Azerbaijan Baku Latvia Riga Georgia Tbilisi Source: Locum Consulting Research BCV,71 Vazha-Pshavela Ave, 7 th floor Tbilisi, Georgia Tel: ( ) ; Fax: ( )

5 Georgia: real estate demand /supply...cont

6 Redix introduction

7 Redix investment management strategy Committed equity participation & competitive debt funding Leverage increasing and improving in parallel of project stabilization and property value increase Balanced mix of real estate class Residential: Develop to sell, turn key high class, opportunistic on affordable housing Office: Develop to operate, mostly A & B class (international standard) Retail (including F&B): Develop to operate, mixed with Office, Residential or Hotel, opportunistic on Malls and Shopping centers Hotel & Leisure: Develop to operate, predominantly mid market, 50% city vs. 50% Resort, internationally franchised or marketing consortia associated Targeted overall portfolio breakdown by 2015: Mixed use: 40% Hotel & Leisure: 40% Office: 15% High class residential: 5% Strong and committed asset and operational management High level of research and feasibility check (with real estate consultants involved) Bringing best international real estate development practice to Georgia (working with best names and best professionals) Competitive investor returns / competing with emerging and frontier markets

8 Redix: focus on hospitality Summary highlights on hospitality sector of Georgia: Arrivals of non resident visitors at national borders of Georgia: 560,000 visitors in Year 2005 vs. 2,030,000 plus visitors in 2010 = over 3.6 times increase Over 670,000 visitors during 4 months of 2011 (low season), over 43% increase compeered to same period 2010 According to GeoStat hotel & restaurant turnover increased 2.5 times during years Hotel & Resort portfolio development plan

9 May 21 nd 2011 Astana, Kazakhstan EBRD Annual Meeting & Business Forum