TBC Capital published a report on the Commercial Real Estate Sector in Georgia 2024. According to the document, in recent years, increased economic activity and the growth of the retail sector have had a positive impact on the commercial real estate market, including shopping malls, street retail spaces, and business centers.
Shopping malls
Business activity in Georgia is predominantly centered in Tbilisi, which generates half of the country’s value-added and houses a large concentration of commercial real estate. In Tbilisi there are 10 multifunctional centers offering a total GLA of 291,728 SQM. Batumi has five modern shopping centers with total GLA of 53,901 SQM. The shopping center market in cities like Kutaisi, Zugdidi, and Telavi is primarily dominated by open bazaars and smaller floor shops rather than modern shopping centers. These open markets and independent shops play a significant role in meeting local consumer demand, offering a variety of products in a more traditional, accessible format. Most of shopping centers in the cities offer limited or no food options and no entertainment amenities and are very similar or closer to open bazaar in nature. They typically attract budget brands and independent retailers.
In 2024, the average rent in Tbilisi shopping centers reached $24.1 per square meter, marking a 7.4% increase compared to the previous year. During the same period, the average vacancy rate in Tbilisi’s shopping malls stood at 4.7%, reflecting a 3.3 pp improvement from 2023. In 2024, average rental prices in Batumi shopping centers increased by 5% compared to 2023, mainly driven by the opening of new shopping centers and positive economic trends in the Adjara region. During the same period, the vacancy rate stood at approximately 5.4%, reflecting a significant improvement compared to 2023.
In the coming years, new shopping centers will appear in Tbilisi, Batumi, and Telavi. Among Tbilisi’s upcoming retail developments, notable projects include Tbilisi Outlet Village and shopping mall “Bavshvta Samkaro”. At least two new shopping centers (Orbi City and World Trade Center) are expected to open in Batumi, nearly doubling the total leasable area in shopping centers. By the end of this year, Telavi is also expected to see the addition of a new shopping center.
Street retails
Commercial streets are essential to Georgia's retail sector, offering a range of international and local stores. Tbilisi leads with the highest average rent at $31.0 per SQM, reflecting its appeal as the capital and a major retail destination. Batumi follows at $25.5 per SQM, driven by high seasonal demand in this tourism-focused coastal city. Kutaisi and Zugdidi have moderate rents at $19.7 per SQM, while Telavi has the lowest rate at $11.8 per SQM, aligning with its smaller, more localized retail market.
Business centers and offices
In 2024, the average rent in business centers was $23.4 per square meter (excl. VAT and service fee), reflecting a 6% increase over the previous year. Notably, the rent for Class A offices, at $28.0 per SQM, is nearly double the rate for Class B offices, which stands at $15.1 per SQM. As for the Class C facilities, mainly, primarily located on the first floors of residential buildings, the rent in 2024 accounted $13.0 per SQM.
In 2024, the average vacancy rate in Tbilisi's business centers stood at 12%, marking a 2 pp decline compared to 2023. Vacancy rates at Class A business centers decreased to 10%, while Class B centers experienced a reduction in vacancy rates to 17%. In Batumi, rental prices are closer to Tbilisi's average, at around 16 $/SQM.
The office market in Batumi, Kutaisi, Zugdidi, and Telavi is characterized by a lack of organized office space providers. In these cities, most office facilities are primarily located on the first floors of residential buildings, limiting the availability of dedicated business centers.
