World President of FIABCI on importance of public and private sector partnership

- As you mentioned, the effect of the COVID-19 outbreak on the real estate industry varies by sector, geography and market, and the extent of the impact depends on the length of the economic shutdown. As you are aware, FIABCI Georgia recently conducted a survey of its members and other companies involved in real estate and construction, to obtain feedback from them. One thing that makes this economic disruption so challenging for the companies, is that the future is not clear. It would be interesting to hear your recommendations and insights regarding the Georgian market, and to hear your advice on how Georgians should conduct their activities in order to be ready for similar outbreaks in the future.

- I know that FIABCI Georgia has presented suggestions for how it could help. I have read a little bit about the initiatives of the government of Georgia to support the economy. I think that although people usually have a tendency to criticise the government, from what I have seen, some important measures have already been taken by your government, such as the allocation of money to firms and businesses to pay salaries, and exemptions from the payment of property tax. The National Bank is also trying to create policies for helping with loans and mortgages. For the time being, loans have been rescheduled for three months, and the Tbilisi City Hall have exempted tenants from paying rent until a later date. Other good measures concern gas and electricity payments and loans to hotels in order to keep them going. All of that is great, as I compare it with what is happening across the world.

If the crisis were to be over in, say, middle of May or the beginning of June, then all of this could be enough. However, if this goes on beyond May, then we will need not a postponement but a cancellation of taxes for two or three years. Maybe this can apply to the money that was paid into the pension fund. We need to see how loans can be rescheduled on a larger scale, because if you are not going to be working for a year, then you will still not be able to pay next year what you did not pay this year. You will need at least 10-15 years to get back on your feet. What are the margins of profit nowadays? Repayment should be done over many years, so that you do not feel the impact and it does not affect your income. So, these payments should be rescheduled for at least 15 years.

For sure, we need incentives for local and international investment – this is a must. The private sector has a major role to play here to convince the public sector what the real needs are. The public sector can guess what the problem is, but it will not know what the precise needs are. That is why the private sector has to show initiative and, together with the public entities, organise meetings and brainstorming sessions. I pray that the public sector accepts that initiative, invites you to those meetings and listens to you. Sometimes they invite you, but do not listen or do what you ask them to. This time, things are very serious, and FIABCI has a major role to play with the experience that it has. I am not a genius, but I follow the news everywhere, and try to see what is good and bad here or there, and which ideas can be implemented elsewhere. The fact that FIABCI Georgia is open to the international community means that it can gain insights on what is working elsewhere and make suggestions to the local authorities.

I hope that FIABCI Georgia will be able to play that role, organise a lot of meetings with public authorities, and convince them what should be done. I am here to assist you and become involved virtually in any of FIABCI’s meetings with local authorities. I would like to assist FIABCI Georgia for three reasons – first, because FIABCI Georgia is very dear to me, and I consider myself a part of this chapter. Secondly, I am naturally a person who likes to help and tries to get involved in everything related to the real estate sector – devise initiatives and find solutions. Thirdly, as World President of the International Real Estate Federation it is my duty to do so. I will not be the World President forever, but even with what I can tell you based just on my international experience and the global exposure that I have, I will always be ready to help and stand next to you – the chapter and real estate community in Georgia.