Georgia’s capital market is developing mainly through corporate bonds, while the market for bonds issued by international financial institutions and the investment fund sector are also gradually expanding. However, there is currently no sufficiently liquid financial instrument on the market, according to Irakli Kirtava, CEO of the Central Securities Depository.
Kirtava sees the development of real estate investment trusts (REITs) as a potential solution. He said the initiative has been under discussion since 2019 and, with an appropriate tax regime, REITs could become a liquid instrument given strong interest in real estate among Georgian and foreign investors.
According to Kirtava, a properly structured REIT framework would create an investment instrument linked to real estate income and encourage greater public participation in the capital market. He noted that REITs have proven successful internationally, but their effectiveness depends largely on an appropriate tax environment.
Kirtava said he hopes the legislative framework for REITs will be developed this year and introduced to commercial and financial-sector participants. He considers this an important first step toward creating a more liquid capital market and supporting its long-term development.
