According to Beso Ortoidze, General Director of the development company Arsi, the Georgian real estate sector has not seen the arrival of new foreign investors in recent years. Instead, local companies have been driving development through profit reinvestment. Ortoidze shared his views during an interview with Business Morning, while commenting on the FDI decline in construction and real estate sector in 1Q2025.
“We’re closely watching the market, and I don’t recall any new players or investors entering the real estate sector recently. Current investments are coming from existing actors reinvesting profits or injecting additional capital,” said Ortoidze.
He emphasized that although local capital currently dominates the sector, foreign investment remains essential in the long term for balanced and sustainable economic growth.
“Local capital is probably at a historical high in real estate. If you also factor in banks’ exposure to development projects - which we know is at a record level - it’s clear that in the short term, there’s no urgent need for foreign investment. But long-term, FDI is critical. It brings not only capital but know-how, discipline, and international credibility,” Ortoidze noted.
Ortoidze cited Arsi as an example of a company with a long-term foreign investment partnership.
“We’ve had a foreign investor partner for 12 years, and we’ve reinvested nearly 90% of profits during that time. However, today, even that reinvestment happens mainly due to strong personal relationships rather than broader investor confidence in Georgia.”
He added that despite Georgia obtaining EU candidate status in December 2023 - an event he described as a “very strong message” to investors - the momentum did not translate into increased foreign interest.
“Investors don’t base decisions on local media narratives. They rely on reports by international institutions, consult embassies, and assess overall political and economic stability. The current environment in Georgia makes it difficult to attract new European investors.”
According to Ortoidze, international partners are cautious, and existing foreign investors are focusing on protecting their current stakes rather than pursuing expansion.
Official data supports Ortoidze’s concerns: FDI in Georgia dropped by 7.7% in Q1 2025, totaling USD 179.4 million. This suggests growing investor hesitancy amid domestic and regional uncertainties.
Ortoidze concluded by calling for more proactive, internationally credible engagement from both the public and private sectors to restore investor confidence.
“You can’t attract new investors with domestic reassurances alone. There must be internationally recognized, stable signals - something more than political messaging - to rebuild trust.”
