Bringing Content to Real Estate Development: The Georgia Example

Op-ed

Construction and real estate development can be found on every step in Georgia and the national real-estate market seems to be extraordinary vibrant and lucrative. The situation bears a strong resemblance to my native Montenegro in 2008, when a sudden influx of Russian dollars turned what is actually a minuscule country into one huge development site.

But there is an important difference. While Montenegrin NATO and EU aspirations halted further Russian investments, it seems these very same aspirations have had a different effect, boosting investor’s interest in Georgia. It seems that Georgia played safe with more reliable foreign investment.

The Georgian Government seems ready to support this development boom with massive state-funded infrastructural investments in highways, railways and urban development sites. Real-estate development in Georgia is in fact so Omni-present, massive and impressive that one simply has to stop, take a breath, and ask will Georgia soon experience the same problem faced by so many urban centers in Europe: low occupancy rates caused not by low quality apartments or bad infrastructure, or even expensive real estates, but by something much more damaging to investors: lack of urban content?

Infusing soul in brick and mortar

Not long ago, developers behind the HafenCity property in Hamburg realized quality apartments and fresh sea breeze will not be enough to motivate potential buyers to move in with them. Something else was necessary and the answer was to enrich. Together with traditional real estate baits, quality office and residential areas, they needed to bring culture and leisure, tourism and retail facilities to their community. And it has paid off for the HafenCity.

Quality development projects, like King David, Lisi Lake etc., are not rare in Tbilisi, but they seem to be employing traditional real-estate marketing strategies. A strategy conveying messages perhaps too familiar: comfortable living and contemporary office space. Surprisingly or not, but just like their peers in Europe, Georgian buyers seem far from being satisfied with this approach.

How to sell nowadays?

Successful development was never an easy job; the skill of creating a perfect and, more importantly, appealing mix of luxury and leisure apartments and condominiums, different retail and hospitality facilities, and restaurants together in the right proportions, borders alchemy. The necessity of attracting buyers led developers to uncharted lands, where their sites require small city-like management skills, and even resemble management of a theme park.

The art behind a successful modern development project seems to be in the ability to resolve a conflict between the need to create a place that entertains residents and a place that makes retailers richer. The main challenge seems is in how to successfully navigate between architecture, psychology and economy and create a community. And that, as many Tbilisi developers start to realize, requires a lot of planning and strategy, collaboration and cooperation with partners previously unusual in the real-estate industry.

New World, new practices

In the States, this mission impossible is being accomplished with mixed success through an unusual partnership between non-profit organizations and real estate developers. In an effort to solve this urban planning riddle in their community, my colleagues from Scottsdale, Arizona, formed the Scottsdale Gateway Alliance. The organization advances investment and revitalization opportunities in the Southern Scottsdale Community and along the McDowell Road Corridor. They have managed to transform Southern Scottsdale from a place you wouldn’t like to find yourself in during the daytime, let alone at night, into a humming, vibrant neighborhood everybody wants to move into.

To say Tbilisi developers are unaware of this would not be true. Companies like the Adjara Group seem to be spearheading the urban development revolution in the Caucasus. Their “Fabrika” (Factory) Project is already attracting young talent from across the region by offering employment opportunities and a chance for a career start in a fast-developing company, an offer not that many millennials can refuse. Adjara Group is investing heavily in urban neighborhood development across Georgia’s capital city, creating hot spots millennials flock to.

The Georgian Government seems to have recognized these private sector efforts and supports them with very liberal policies on visas and residence permits, allowing talent acquisition not only from neighboring countries but from Europe, too. It comes as no surprise that digital nomads and nomad capitalists around the world are increasingly considering Tbilisi as their next business destination, generating in turn increasing foreign currency revenues for Georgia.

Future of Content in Real-Estates

Enriching real-estate with content appealing to buyers is truly a cross-sector cooperation project, able to take city-living to new, exciting heights. It could play a vital role in countries experiencing negative effects such as the emigration of the talented and skilled. It could also be an answer to a problem both Europe and Georgia are too familiar with: an aging population. As we are all headed towards a silver economy, dominated by the 50+ generation, investors can benefit by providing the right content to financially potent buyers.

The 50+ remain independent and healthier for longer, driving the demand for customized senior housing, typically starting with barrier-free, easy-to-access apartments close to medical centers, dining, shopping, and recreation facilities.

In Tbilisi, a city of many theaters, museums and music venues, projects like “Fabrika” can save their artistic capital by preventing commercial interest from prevailing over the city’s aspiration to be a cultural and arts center of this part of the world, rather than just becoming another soulless economic hub.

Back in Montenegro, one of the larger international real estate developers, the Stratex Group, is already tapping into this market by developing projects tailor-made for people 50+. The group owner, Neil Emilfarb, recently formed a successful art community infusing the soul of his real estate developing project, Dukley Gardens, into the seaside town of Budva.

In an effort to create content for their residents and attract new buyers, Stratex helped turn a publishing and digital project “Age of Happiness” into a two-week arts and music festival. The project kicked-off five years ago by Jacob Weiner, an Israeli entrepreneur with long track of successful international media projects. The festival attracts people over 50 to explore their limits and add new quality to their lives and has no less than four million followers from around the globe. Every autumn, more than 400 “seniors” from more than 30 countries flock to Montenegro to listen to the lectures, concerts, attend art workshops and practice yoga, dance, or just enjoy conversations with like-minded people, making the festival one of the best examples of enriching real-estate with content. An example Georgian and urban developers across the world looking to attract buyers could take a cue from.

Ljubomir Filipovic is a Montenegrin entrepreneur, consultant and activist. Former Vice-Mayor of Budva, member of the political bureau of the Assembly of European Regions and UEF Brussels federal committee member.

Ljubomir Filipovic