Overall, rents remained largely stable in 70% of markets. Growth accelerated in 22% of markets in H1 2019 indicating that despite the current macro-economic environment and weak industrial sentiment, real estate market fundamentals remain in favour of landlords.
Compared to other European cities, Tbilisi’s existing and upcoming warehouse supply per 1,000 inhabitants, as well as the rental rates for storage spaces are remarkably low. Furthermore, Tbilisi ranks last among comparable cities in terms of upcoming stock. These characteristics indicate that the warehouse market in Georgia is underdeveloped.
The total area of warehouse spaces in Tbilisi, Batumi, Kutaisi and Poti amounts to approximately 2.5 million sq m, 1.16 million sq m of which is leasable. With 767 K sq m leasable storage area, Tbilisi is the largest supplier in the country, followed by Kutaisi with 230 K sq m leasable area.
Supply of modern A Class spaces is limited and is represented only by Gebrüder Weiss hat offers a complex rental service. Due to limited demand for A Class storages in the country, a high share of (local) owner-occupied stock, and a limited number of international tenants, the leasable area of Gebrüder Weiss has increased only slightly in recent years.
The majority of leasable and owner-occupied spaces are located in old buildings. After the collapse of the Soviet Union, the ownership of state-owned industrial buildings was transferred to the individuals. This led to an increase of low-class warehouse spaces, the majority of which is now occupied by the local companies. As the rental rates are quite low, the construction of new properties is not profitable for interested individuals, thus the market is dominated by old storages.
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