The Work Goes On: Red-Co Invests More than $50m in Georgia

Established in 2012, Red-Co real estate development company was one of the pioneers of introducing an essentially new type of residential complexes to the local housing market, specifically ‘aparthotels,’ which have proved profitable for the company and have attracted a vast number of foreigners. By carrying out various construction projects across the country, with the most remarkable ones in Gudauri and Batumi, Red-Co has thus contributed largely to boosting the job market as well as the touristic potential of the regions. Mirian Katamadze, General Director of Red-Co spoke to Georgia Today about the company, ongoing projects, future plans and how the country benefits from them.

Does Georgia have an attractive investment market and how much has Red-Co invested so far?

Almost 90% of our investments are foreign and most of them are channeled towards touristic regions of Georgia, which are highly attractive and carry enormous potential, though do not always satisfy the demands set by the industry in the 21st century, a case which we hope to change. As foreign investors can freely invest wherever they want in the developed world and any country would be more than happy to accept that, it has been a challenge for Red-Co to persuade them to focus on Georgia. However, Red-Co has succeeded and already invested more than $50m in the last two years with the prospect of doubling that in the forthcoming years.

Batumi will soon boast the highest class hotel to be operating to this day in Georgia, tell us about the project

Indeed, after purchasing the 35-story Batumi Tower, a former to-be technological university building, for $25m in March 2015 and with the obligation of spending another    $15m on it in the following three years, we have started an enormous investment project. The tower is currently being re-designed to finally make up a complex comprising of presidential, deluxe and standard aparthotels, inner and outer swimming pools, restaurants, a fitness center, a lounge bar on top, and a casino. But since the stated building did not satisfy the standards necessary for opening a 5 star hotel, which we had planned beforehand, we have already started constructing an additional building on the territory and are proud to have signed a contract with Starwood Hotels and Resorts on bringing in its luxury brand Le Meridien, which will be operating in the country for at least 30 years.
We have hired up to 20, mainly international, consulting and operating firms through tenders to work on the Le Meridian project. Having extensive experience in providing professional technical and management support, the local representative of Aecom is coordinating and managing the construction process, Rooms is working on the interior design, while others are focusing on issues of safety, lightning, conditioning, kitchen, etc. to be in compliance with highest possible international standards. About 150 workers are currently employed on a rotation basis. And the complex comprised of Batumi Tower and Le Meridien, which we plan to finish by the summer season of 2017, will employee up to 400 people.

RED-CO has been focusing on touristic regions of Georgia. One of your first and biggest projects - New Gudauri - has been an important development

Starting construction in the middle of nowhere, we have already finished a complex with three aparthotels in Gudauri that can accommodate a total of 8000 people and another is underway. Red-Co manages the buildings and its infrastructure, as well as restaurants, swimming pool and wellness center. The project employed about 300 workers during construction, while 50 people are working there on an everyday basis now. Apart from benefiting the local population, the apartments have also proved interesting for foreigners. Most of them have been purchased by citizens of Ukraine, Azerbaijan, Russia and some European countries, which means they plan to spend their time, thus money, in our country, and by doing so the overall living standards and welfare should increase in the region.
The potential of Gudauri is very impressive and I believe the number of tourists can even double in the near future, taking into consideration tense relationships between the neighboring countries. However, at this point, the resort is not ready to host such numbers of tourists and we are thinking on expanding our works in this area. After a hopefully positive outcome of negotiations with the government, private owners and allocating relevant resources, we plan on constructing another 1000 rooms, thus providing relevant supply to the growing demand. The total estimated investment by 2017 will be about $40m.

What are some of the other ongoing projects and the future plans of Red-Co?

We have already signed a deal with Radisson, which will open in one of our buildings in Gudauri. This will be the first 4 or 5 star international brand-hotel in Gudauri. Currently, we are finishing a $10m aparthotel project in Bakuriani. Red-Co is building a house near Mziuri, with commercial property and offices on the first two floors and residential apartments on the rest. We already have confirmation from yet another Starwood family-member, W Hotels, which we hope to open in Tbilisi in the coming 2-3 years.

Mariam Kiasashvili

28 December 2015 20:33