Warehouse market in Georgia
Given the Georgia’s strategic position and potential as a gateway between Europe and CIS/Asia, the warehouse market will likely experience accelerated growth in the near future. Combined with Georgia’s strengthened ties to Europe, featuring the Association Agreement and DCFTA, these public infrastructure investment initiatives should lead to strongly improved conditions for industrial real estate market growth in the medium term.
Establishment of the Free Industrial Zones (FIZ) are aiding the development of Georgia’s industrial and warehouse markets. Together with flexible and comprehensive legislation, these steps have created a healthy investment climate for both large and start-up companies.
Tbilisi’s total industrial and logistics space amounts to 1.44 million sq.m. During 2016-2017, the city’s total industrial and logistics space grew by 86,000 sq.m., of which 49% is leasable. Supply growth was reported in B and C Class spaces. The A Class supply remains limited with a total of 10,000 sq.m., operated by Austrian logistics specialist Gebrüder Weiss. The leasable supply amounts to 321,000 sq.m., of which 293,000 is dry storage. The total capacity of cold storage facilities in Tbilisi is around 140,000 tons. Food and Beverage is the broadest demand category, primarily represented by local and international supermarket chains. Demand by the Consumer Goods and Appliances and Building Materials sectors is also significant, amounting 26% and 18% respectively.
The total amount of Industrial and logistics space in Kutaisi equates to 472,000 sq.m. During 2016-2017 the figure grew by 46,000 sq.m., of which 31% was leasable. Kutaisi’s dry storage supply is represented by B and C Class warehouses. Kutaisi’s cold storage warehouse space is extremely limited and primarily comprised of small, cold storage containers. The Consumer Goods and Appliances category is the largest occupier, leasing 50% of the supply. Additional categories with substantial occupied space are Building Materials and Food and Beverage, representing 23%- 24% of the listed supply.
The total industrial and logistics space in Batumi amounts to 293,000 sq.m., of which 42% is leasable. The vast majority of facilities in Batumi are old, Soviet-era buildings, some of which have undergone recent renovations. During 2016-2017, Batumi’s total industrial and logistics space grew by 10,000 sq.m., which was primarily attributable to the growth of owner-occupied supply. Several leasable warehouses were sold, thus reducing the leasable supply by 14%. Batumi’s industrial and logistics supply is dominated by dry storage space, while cold storage represents an insignificant share of the leasable supply. The Food and Beverage category is the most substantial occupier, leasing 41% of the supply, while Building Materials and Consumer Goods and Appliances each lease 25% of the occupied space.
Currently, Poti has 102,000 sq.m. of total industrial and logistics space, with 27,000 sq.m. (27%) of that leasable floor space. Total terminal space amounts to 38,ooo sq.m., while Poti has 23,000 tons of cold storage capacity. Poti’s leasable supply is represented by B Class spaces, of which 53% is dry storage. During 2016-2017, the leasable market supply decreased slightly, due primarily to the departure of several market players. There are no new, significant industrial and logistics projects planned for the near future.