The Georgian real estate industry has emerged as a veritable growth powerhouse, taking pole position among the country's fastest-expanding sectors. Demand for residential property, including apartments, private homes, and tourist infrastructure, has continued upward momentum, particularly in high-growth urban centers like Tbilisi and Batumi. The market outlook is buoyed by robust long-term demand drivers, with the urbanization rate having swelled by 2.3 percentage points since 2015 and forecasted to crest 60% by 2023. Notably, despite a declining trend in average household size, currently hovering at 3.3, which is above the European average of 2.3, the pressing need to replace outdated structures is spurring demand. Moreover, the expanding hospitality sector is opening a window of opportunities for Emirati investors to participate in hotel, resort, and other tourism-related ventures.

Recent regional migrations profoundly affected the local real estate market in 2022, and the impact carried on in 2023. The demand from migrants was mainly concentrated on the rental market and pushed rent prices to unprecedented levels. In March 2023,  according to TBC Capital, rents in Tbilisi increased by 101% YoY and pushed the yield to as high as 12.1%. The growth in sale prices was also considerable. The total size of the real estate market in Georgia values at around 3.6 billion dollars. Tbilisi accounts for approximately 71% of the market, and Batumi takes a 19% share.

Tbilisi has been experiencing double-digit growth with regard to transactions and real estate prices for several years. Due to growing demand, prices have risen by almost 15% in the past year, with an anticipated growth rate of 20% projected for 2023. Consequently, competition in the development and construction markets is considerably high. Irakli Burdiladze, CEO of the construction and housing developer company BK Holding, notes that in the last ten years, the annual volume of real estate sold in the country has tripled in the housing market.

The real estate market is one of the prominent areas of interest for Arab investors. The significant attraction has pushed several Georgian companies to launch sales branches in Dubai. One such firm is York Towers, a developer with a concept of residential properties inspired by the UAE. One more enterprise that intends to open a branch office in Dubai by the end of the year is Mardi Holding, which will open the first Novotel Living in Georgia in 2024 in collaboration with Accor Group. Furthermore, Apart Development, a key player specializing in contemporary buildings in the historic precinct of Old Tbilisi, will also open a shop in the UAE.

Notably, Georgian development companies have made significant inroads into the UAE market. A case in point is Next Group, an investment-development firm renowned for crafting opulent 5-star complexes in collaboration with premier global hotel brands. Currently, the company is undertaking a landmark project in partnership with Nakheel, a preeminent master developer, as part of the development of Dubai Island.

In recent years, the burgeoning appetite for family-friendly settings replete with lush greenery has surged in Tbilisi. To cater to this discerning clientele, CEO Nodar Adeishvili of LISI Development has set in motion an ambitious project to construct a residential enclave in the city's heart, close to Lisi Lake.

Along with the expansion of the real estate market, architecture also plays a pivotal role in the country. Khmaladze Architects is one of the companies modernizing the landscape of real estate throughout the country. Major company projects, such as McDonald's in Batumi and the Meama coffee plant in Tbilisi, have earned numerous prizes in the A+ Awards. Another such example is Spectrum Architecture, a Georgian company with a global footprint; half of its projects are situated across diverse locations in the Middle East, the US, Asia, Africa, and Europe.

The Batumi real estate sector became a magnet for foreign investors, with a marked proclivity for this idyllic coastal city also observed in the United Arab Emirates. A critical factor in augmenting the market's allure is the investment facet, with many developers crafting upscale hotel complexes featuring rooms for sale. Notably, Alliance Group is one such entity, with its towering 230-meter-high edifice set to become the tallest in Georgia. Meanwhile, adjacent regions near Batumi are also witnessing rapid development, as exemplified by the ongoing construction of the Mziuri Gardens residential complex. Gumbati Group and Tourinvest are also historical and trustworthy players in the Adjarian construction and real estate landscape.

Georgia's real estate and construction market has emerged as an enticing avenue for investment, with both local and foreign investors keenly scouting for opportunities to capitalize on its high-profit margins and stable growth prospects.

‍