Growing Trends for the Retail Sector in Tbilisi in 2017 - By Colliers International Georgia

The real estate sector is one of the biggest contributors to Georgia’s GDP. Tbilisi remains the main supplier for the commercial real estate market amongst the country’s three main cities.

In spite of rapid growth, Tbilisi is lagging significantly behind Central and Eastern Europe in terms of supply of commercial space at shopping centres per 1000 population.

According to Colliers International Georgia’s analysis, the opening of modern shopping centres during the past few years has gradually changed the consumers’ shopping habits. A joint space offering a full spectrum of goods and services is more convenient for the consumer, which increases the popularity of shopping malls. The majority of international brands that have entered the Georgian market in recent years, have chosen to open stores in shopping centres. Therefore, high-street retailers are losing their appeal for shoppers, and are evolving under different profiles.

Notably, the supply of commercial space in shopping centres increased by 10% during the second half of 2016, with the figure expected to reach 43% (approximately 110 000 m2) over the following six months.

Significant growth has been registered in the Tbilisi suburb of Gldani, where three modern shopping centres with total space of 40 000 m2 have opened during the past two years. The retail market in the said district has been characterised by high competition.

In spite of the increase in supply, there has also been a growth in demand, which is reflected in the high level of activity inside the newly opened shopping malls.

According to the information obtained by Colliers International Georgia, commercial space totalling 30 000 m2 was rented in 2016, of which 33% was accounted for by suppliers of household goods and furniture. Several international brands such as Bricorama and Jysk have appeared on the Georgian market, while existing ones, such as Super, have expanded their network of stores.

Commercially busy high-streets (Pekini Street, Rustaveli Avenua, Chavchavadze Avenue, Aghmashenebeli Avenue) have mainly registered demand in the following categories:

  • Clothing and Shoes (45%)

  • Services (21%)

  • Food (20%)

As for the rental rates, the weighted average rental rate at shopping malls constituted USD 16 per m2, which represents a 4% increase compared to the first half of 2016. The weighted average rental rates on commercially busy high-streets fell by 3%, equalling USD 32 per m2.

The vacancy rate inside shopping centres decreased slightly, equalling 13%, while the high-street equivalent figure increased by 1% to 9%.

Subscribe to Our Newsletter to get
important News, Amazing Offers & Inside Scoops: