By Kate Tabatadze
Hotel-type apartments constitute a successful business model across the world. Therefore, it is little wonder that this model also works well in Georgia – a country with a dynamically growing tourism sector. During the last 5 years alone, the number of annual visitors to Georgia increased from 2.8 million to 6.4 million. The Georgian development company RED-CO has continuously responded to market demand with correct, consumer-oriented decisions throughout these 5 years. From the very beginning, the company has aimed to build and develop tourist infrastructure that would be attractive even to the most demanding investors – both Georgian and foreign – who value modern and high-quality services, security, comfort and effective management.
RED-CO creates and manages tourist infrastructure which brings profit both to the company and the owners of the hotel-type apartments and other private or commercial properties. When owners are not staying at their apartments, they can rent out the said properties. The network of apartments with hotel services is one of RED-CO’s flagship projects and constitutes a source of guaranteed income. In these matters, property owners are looked after by Red-co’s subsidiary company, the RED-CO Management Group.
Investing in RED-CO’s aparthotels allows owners to obtain annual passive profits of up to 15-20% at a time when profits obtained from deposits at commercial banks do not exceed 5-7%. Apartment owners will be able to recover their investment within 5 to 7 years, depending on occupancy and the length of the holiday season in the holiday zones. For example, in Gudauri, where RED-CO is building New Gudauri Residences & Spa next to the cableway station Gondola, occupancy reaches 90% during the high season. As part of the New Gudauri project, the company is to construct 27 new buildings on a space of 50 ha, including 2, 3, 4 and 5-star hotels, 5 separate aparthotels with up to 500 apartments, New Gudauri Loft 1 and New Gudauri Loft 2.
The number of visitors to Gudauri is growing by 10-20% annually. As RED-CO develops the local infrastructure, the flow of tourists is also increasing during the summer months. During the 2016-2017 season, Gudauri hosted 276 000 visitors, while the last 5 years saw the visitor numbers treble. The majority of the visitors come from abroad, and apart from holidaying, they are also interested in purchasing real estate in Georgia. Investment in real estate tops the list of investments in the country. In this regard, conditions for foreign nationals are ideal: they are not taxed for purchasing real estate in Georgia, and official registration procedures take only 15 minutes at administration centres across the country. Notably, foreign nationals receive a 1-year Georgian residency permit when investing $ 35 000 or more.
With regards to Gudauri, real estate prices here are growing fast each year. Those who conduct their investment at the planning or construction stage of the project pay less, thereby benefitting more from the process. Prices per square metre in New Gudauri range from $780 to $1500. RED-CO offers its clients interest-free internal loans until the project’s completion. Customers can also take advantage of a long-term mortgage loan from the bank.
For those wishing to purchase a finished property, a 7% mortgage loan is available with a down payment of 20-30%. Non-residents can take out a 9% mortgage loan for a period of 3 to 5 years without proof of income, with a down payment of 10-30%.
Red-co will invest a sum of USD 150 million into the development of New Gudauri Resort Residences & Spa. Numerous restaurants, bars and cafes, fitness centres and spas, children’s facilities and conference rooms are available to guests for an entertaining and comfortable stay at New Gudauri. In order to create European-standard interior and exterior, Red-co has collaborated with highly qualified Georgian and foreign architects, a large group of designers, as well as representatives from world-renowned hotel brands and project companies for all of its projects.
One of the main advantages of RED-CO’s residential and leisure complex is its location. Its proximity to the modern cableway station Gondola makes it an even more attractive investment proposition, as it is an important factor for skiers. Gudauri offers skiing, snowboarding, paragliding and heliskiing opportunities during the winter season. 10 cableways operate on 70 km tracks. Gudauri is also a paradise for free riders. At other times of the year, the resort offers paraflying, horse-riding, mountain-biking and hiking opportunities.
The growth in tourism in Gudauri, as well as in Georgia in general, is a result of the country strengthening its positions on the tourist map. According to the latest international rankings, Georgia is in the top 7 of the world’s safest countries (Numbeo Crime Index 2017), top 20 with regards to ease of doing business (Doing Business 2017), and top 6 among the best tourist destinations according to The New York Times.
Apart from Gudauri, RED-CO’s portfolio includes various construction and development projects across Georgia, such as aparthotels in Bakuriani, residential properties in Tbilisi, as well as the Batumi Tower – a unique complex which includes the 5-star Le Meridien Batumi hotel, a casino, and 75 exclusive residences.