ENTERTAINMENT MARKET REPORT GEORGIA 2015

Transcription

1 ENTERTAINMENT MARKET REPORT GEORGIA 2015

2 Contents Executive Summary 3 Georgia - Country Profile 5 Entertainment Market Overview Gudauri Casinos 8 Cinemas 10 Amusement parks, Zoo and Other Destinations 11 Leisure Market Overview Gastronomy and Wine 13 Wellness 16 Active Leisure 17 Culture Market Overview Museums Sector Overview 20 Stadiums & Arenas 21 Theatres & Concert Halls 23 Conclusion & Outlook 24 Appendix 1 Real Estate Registration, Construction Permit and Incentives 25 Appendix 2 - Primary Information Sources and Data Used for The Study 27 Disclaimer 29 Project Team 30 Colliers Global Stats at a Glance 31 Team Georgia at a Glance 32 2

3 Executive Summary Georgia s entertainment industry provides a rich diversity of options, with the majority of activities falling into the entertainment, leisure or cultural categories. Most of these activities are located in Tbilisi and Batumi, followed by Kutaisi, with other regions across the country also offering numerous attractions and activity options. Tourism is one of the country s most promising sectors for growth. Given Georgia s rich and unique historical heritage, natural environmental beauty, world-class and award-winning wine and cuisine, and with a wide array of recreational offerings on hand, the annual number of tourists is rising. The Georgian government believes that development of individual industries, like gaming, sports and cultural tourism, directly correlates with an increase in foreign investment. In light of this, they re working to make Georgia a hotspot for various international events. The turnover of gambling, sport and culture-related industries King David amounted Residence to 4% of the country s total turnover in Supported with privileged tax liabilities, the gaming sector has been one of the fastest growing industries in the entertainment market since Large-scale local and international operators provide modern facilities for various games in Tbilisi and Batumi. Several international events, such as the World Series of Poker, have taken place in Georgia, establishing the country s reputation as a gaming hot spot with gamblers around the world. Various profile and theme museums, theaters and concert halls around the country provide a wide assortment of wonderful venues in which to enjoy Georgia s arts and explore its cultural heritage. The number of visitors for both museums and theaters has risen steadily during the last decade. While a majority of the country s most significant museums are located in the capital, one can find museums across Georgia, often regionally-themed and specific to the area in which they re located was a significant year for Georgia s arts scene. Tbilisi s beautiful opera house was fully renovated after six years of work to restore it to its former glory. Various concerts and festivals featuring both local and international talent were held across Georgia and a number of large scale performances are still in the pipeline. The Black Sea Concert Hall a newly constructed ultra-modern facility in resort Shekvetili on the shores of The Black Sea- is Georgia s latest 10,000-seat venue providing visitors with world-class shows and concerts. The cinema sector experienced a sharp increase in facilities in 2015 as Georgia's two largest cinemas (with a total of 15 screens, including an IMAX hall) were introduced in Tbilisi to the market by Cavea Cinemas. The number of movie theatres beyond Tbilisi has remained relatively low, though new cinemas, including the sixscreen theatre in Kutaisi scheduled to open this year, are now in the pipeline. Gastronomy and the wine industry have always been significant parts of Georgia s unique culture and Georgian dishes are considered by many to be some of the most delicious in the world. The turnover of cafes and restaurants reached its highest point in 2015, at GEL 571 mln, and it is believed that the sector is nowhere near its full potential. Georgian wine, made following the unique Kvevri process, a UNESCO-nominated Intangible Cultural Heritage of Humanity technique, is celebrated worldwide by wine aficionados. More than 143 thousand tons of grapes were produced in Georgia in 2015, feeding both a growing wine export industry and wine-focused tourism within the country. Providing a unique experience, several high-class chateaux and wine destinations, such as wine cellars and shops, have recently begun operations. The Kakheti region, famous for its cultural wine heritage, is the country s main destination for wine tourism. Mtatsminda Park is Tbilisi s biggest amusement park, while Tsitstinatela Park in western Georgia is the sector s main facility. Other important recreational destinations include the Tbilisi Zoo and Mziuri Park. The 2015 flood destroyed facilities in Tbilisi s central district and ruined the infrastructure of these two parks. Both destinations were quick to repair damages and reopen, and today they are each working on expansions that will make them even more engaging. Georgia s Botanical Garden is also a popular recreational destination, while large scale infrastructural works are underway in a number of Georgian squares and parks, including the beautiful Lisi Lake in Tbilisi.. The idea of healthy living is gaining popularity, which has led to an increase in the number of fitness centers and swimming pools. Several international fitness operators, such as Aspria and Snap, have successfully entered the Georgian market, expanding their chains in Tbilisi and Batumi. A number of active leisure options, from night clubs to extreme sport facilities, can also be found in Georgia. Winter sports draw both locals and tourists to several resorts, including three new facilities located in Hatsvali, Tetnuldi and Goderdzi. The country s most popular winter destinations remain the Gudauri and Bakurkiani Resorts. These beautiful spots offer visitors an exciting array of snow-based activities in their completely renovated facilities, while their artificial snow machines ensure the longest ski season in Georgia. Bakuriani is also frequently visited during summer for walking, hiking and other similar activities. 3

4 Entertainment Map of Georgia MESTIA King David Residence ANAKLIA GUDAURI POTI KUTAISI TELAVI BATUMI BAKURIANI TBILISI KVARELI LEGEND Airport Wine Region Stadium and Sport Complex Amusement Park Theatre and Museum Casino Ski Resort Cinema Golf Club Aqua Park Fitness Source: Colliers International 4

5 Georgia Country Profile Introduction Located at the crossroads of Europe and Asia, the country of Georgia borders Turkey, Armenia, Azerbaijan and Russia. Georgia occupies an area of 69,700 square kilometres and is home to a population of 3.7 million people. The country s land borders run a length of 1,839 kilometres, while Black Sea coastline is 315 kilometres. There are two autonomous republics and 71 municipalities (including 12 self-governing cities) in Georgia. Since emerging from the Soviet Union as an independent country in 1991, Georgia has implemented large-scale reforms, leading to the country s political and economic transformation. These changes have made clear the country s choice to strengthen democracy and further their relationship with the EU. Georgia has made business development within the country a top priority, through encouraging entrepreneurship and devising methods to attract private investments to shifting tax incentives and making the country more attractive to the international business world. With its unique cultural heritage, highly diverse nature, and exuberant hospitality, Georgia s tourism industry continues to grow and thrive, further bolstering economic growth. Government The Georgian government shifted from a presidential to a parliamentary republic after the October 2012 parliamentary elections. The president, Giorgi Margvelashvili, is the head of state and supreme commander-inchief. Georgia s parliament is located in Kutaisi City and acts as the representative body of the country, exercising legislative power, and determining the principal directions of domestic and foreign policy. As an executive council of government ministers, the Cabinet of Georgia is headed by Giorgi Kvirikashvili who comes from the ruling Georgian Dream Coalition. Based on accountability, citizen participation, technology, and innovation as its guiding values, today s multi-party government continues to make European and Euro-Atlantic integration a primary strategic objective. Legal System The Constitution, adopted in 1995, sets out the structure of the national government as well as its powers and functions. The powers of government are divided into three branches the legislative, executive, and judicial. Georgia s court system has three branches: Courts of First Instance (District or City Courts), Appellate Courts (Tbilisi Appellate Court available for appeals from eastern Georgia, and the Kutaisi Appellate Court, available for appeals from western Georgia) and the Supreme Court. Тhe Courts of the First Instance have jurisdiction over all civil, criminal, and administrative cases. Decisions from the Courts of the First Instance may be appealed to the Appellate Courts and, from there, to the Supreme Court. As an alternative to litigation, Georgian laws allow arbitration both in local as well as in international arbitration institutions. The Constitutional Court of Georgia is the sole entity with constitutional jurisdiction in Georgia. Population Georgia s population was 3.72 million at the end of 2015, with a density of 53.4 people per square kilometre and a regional average (in the Caucasus region) 95. Urban dwellers make up 57.2% of the total population though the rate of urbanization is rising. Tbilisi, Georgia s capital and the country s largest city, is home to 30% of the total population, followed by Batumi and Kutaisi with 4.2% and 4%, respectively. Ethnic Georgians form 87% of Georgia s population. Other large ethnic groups in Georgia include the Azeri (6%), Armenians (5%), and Russians (1%). Labor Market Overview Georgia s labor force comprises approximately 2,021,500 people. The country s economic activity rate has risen in recent years, reaching 67.8% in The current unemployment rate is 12%, which is lower than the Gudauri 14.8% average seen last decade. It is worth noting that a large percentage of employed population are self-employed. Currently, 15.4% of the working population are employed by Public sector, while 84.6% work in the non-public sector. In 2015, the three industrial sectors that employed the largest share of people were wholesale and retail trade, industry, and construction. Economy Focused on improving efficiency and overcoming expected difficulties, Georgia s economy is structured to improve efficiency and overcome difficulties, thus allowing the private sector to maintain inclusive growth. The process of economic liberalization, backed by evident pro-western leanings, has greatly improved the country s competiveness for both export and investment opportunities. Georgia s main trade partners include Turkey, Russia, Azerbaijan, and China. Following institutional reforms designed to encourage and support entrepreneurship initiatives, Georgia s economy has taken a giant leap forward in attracting new business. Over the past decade, the per capita GDP increased by 2.45 times from $1,530 in 2005 to $3,743 in 2015 (at current prices). The estimated real GDP average growth equaled 2.3% for Q and is forecasted to reach 3% by the end of the year. The Ongoing Country Partnership Strategy for Georgia, developed through a collaborative effort by the World Bank Group, has further evolved to ensure the effective use of public resources and increase income opportunities. Tax system Since the wave of institutional reforms, Georgia has embraced a low-tax model, slashing the number of taxes and tax rates. Georgia now ranks globally among the top ten countries with the lowest taxes and continues to bring its fiscal policies into further alignment with those of the EU. Currently Georgia has concluded the Argument on the Avoidance of Double Taxation with 52 countries. According to the latest tax code changes, imported goods used in VAT-taxable operations will be exempt from VAT. Moreover, additional changes are planned by 2017, including the removal of the profit tax for the reinvestment of funds. Georgia s liberal tax code includes only six forms of taxes: Profit Tax 15% Personal Income Tax 20% Value Added Tax 18% Import Tax 0%, 5% or 12% Excise Tax on a few selected goods Property Tax up to 1% Tax rate on dividends is defined as a 5% in Georgia. Foreign Trade Overview In 2015 Georgia exports (FOB) and imports (CIF) amounted to $2,204 mln and $7,729 mln, respectively. The top export destinations for Georgia are its neighboring countries as well as Bulgaria and China, totaling about 50% of Georgian exports. Major export commodities include mineral water, metals, and motor cars (mainly re-exported). Throughout the world Georgia is among the largest exporters of hazelnuts, famous for their unique flavor, while the country s wide range of natural wine products continue to grow in popularity in the Chinese, EU, and USA markets. Georgia s main import partners are Turkey, Russia, and China, accounting for 33% of the country s total imports. The primary imported goods include oil, pharmaceutical products, motor cars, electrical equipment, wheat, and sugar. 5

6 Gudauri Business and Investment Environment According to the Heritage Foundation Index of Economic Freedom 2016, Georgia s economy is categorized as Mostly Free, ranking 23 rd out of the 178 countries measured. The significant improvements made to Georgia s legislative framework allowed entrepreneurship initiatives to reach new heights, encouraging domestic businesses and opening the door to foreign investors. Today, the country is exemplary in European and Central Asia due to the ease with which business can be conducted. It ranks 6 th in the world for Ease of Starting a Business, 3 rd for Ease of Registering Property, and 24 th (14 th in Europe and 1 st in the region) for Ease of Running a Business. With no minimum capital requirements, it takes on two days to set up a new business following a quick and simple process. Foreign and local investors are treated equally in Georgia. Today there are four Free Industrial Zones (FIZ) in Georgia in the cities Tbilisi, Poti and Kutaisi and several more is also planned to open including Kulevi FIZ. Two unique Free Tourism Zones in Anaklia and Kobuleti offers various advantages to investors such as free land and ready infrastructure. Aimed at the development of different sectors, the Georgian government has implemented several large-scale projects. Launched in 2014, Produce in Georgia is a successful state program that encourages entrepreneurship as it relates to the exportation of Georgian goods. Another interesting program which began this year is Film in Georgia which hopes to attract international film producers by cash rebate up to 25% on filming expenses. With the project Host in Georgia the local Government provides financial and technical assistance including co-financing to entrepreneurs in hotel industry. The Check in Georgia program brings together musical events with international stars, and promotes events dedicated to local products, all in an effort to increase tourism. In order to promote the development of innovative ideas, The Development Center of High Technology and Innovation (Tech Park Georgia) opened this year. According to the last Trade Policy Review produced in 2016 by the World Trade Organization (WTO), as evidenced by the progressive liberalization of its trade regime, Georgia has undertaken an impressive range of successful reform initiatives. The country has been a member of the WTO since Currently, Georgia is considering joining the expanded Information Technology Agreement, which would help the country attract further investment. FDI of USD 1.75 billion in Georgia in 2014 was the highest indicator seen since 2008, however, this number decreased by 11% in In H FDI of USD 376 billion is 29% higher compared to the same period of time of previous year (highest amount of to the same period of time since 2008). Georgia has signed FTAs with CIS countries. Georgia benefits from the General Scheme of Preferences regulation, which lowers tariffs on goods exported from Georgia to the US, Canada, and Japan. As a result of negotiations with the European Free Trade Association in 2016, Georgia was given duty free access to markets in Iceland, Liechtenstein, Norway, and Switzerland. FTA between the Republic of Turkey and Georgia entered into force in Currently, an FTA between Georgia and China is also in negotiations and will be finalized by the end of The EU represents Georgia s main trade partner. The Association Agreement (AA) between the EU and Georgia, signed in 2014, was ratified by all EU countries in December The Deep and Comprehensive Free Trade Area (DCFTA) was set up as a part of the AA and aims to gradually enhance Georgia s trade and economic growth on its path toward integrating with the European economy. The DFCTA has provided better opportunities for local businesses to trade with the EU and made foreign investment in Georgia much easier. For the period of Georgia also benefits from the unilateral Generalized Scheme of Preferences (GSP). Under the current regulations, due to sustainable development and good governance Georgia qualifies for a special incentive (GSP+) that provides advantageous access to the EU markets. Georgia in International Rankings According to the Doing Business report, Georgia has been among The Top Improvers since 2005 in the EE&CA and globally. Characterized as an efficientlydriven economy, Georgia ranked 66 th in with the relative average score of 4.2 on the Global Competitiveness Index, improving its position by 28 levels when compared to their ranking. The Transformation Index BTI shows that Georgia is up from 95th to 39th position in Management Index Ranking and up from 79 th to 45 th position for Status Index Ranking during the period from 2003 to Democracy Status of the country has also risen in recent years and ranks at 40 th position for the period of The country is ranked 48 th among 168 counties and territories on the Corruption Perception Index, greatly outperforming its bordering countries. Fitch s credit rating for Georgia was last reported at BB- with a stable outlook, and referred to 2016 as a challenging year for growth in Georgia. The report also revealed expectations that the country s economy will grow 2.5% in 2016 and 4.2% in Infrastructure & Transport Due to its access to important terrestrial and maritime transport routes, Georgia has always been a key player in the transportation of cargo as well as natural gas and oil. Today, the three main pipelines are the Baku-Tbilisi-Ceyhan pipeline, the Baku- Supsa oil pipeline, and the South Caucasus gas pipeline. With a capacity to export one million barrels of oil a day, the Baku-Tbilisi-Ceyhan (BTC) oil pipeline runs 443 km through Azerbaijan, 249 km through Georgia and 1,076 km through Turkey. The Baku-Supsa oil pipeline (the Western Route Export Pipeline, WREP) runs from Azerbaijan to Georgia. The pipeline is 833 km long, with 375 km running through Georgia. Reconstruction of portions of the pipeline is scheduled in the near future. The South Caucasus gas pipeline (SCP) has been operational since 2006, following the route of the BTC crude oil pipeline project. The pipeline runs 691 km, with 443 km in Azerbaijan and 248 km in Georgia. Expansion of the SCP is now underway, and will eventually triple the gas volume exported through the pipeline. With the annual capacity of 7 mln tons Supsa oil terminal is a storage for crude oil transported via the WREP. With higher annual capacity of 10 mln tons Kulevi oil terminal has started functioning in Launched in December 2015, the Iron Silk Road is listed among the 100 Best Projects of Global Significance. Cargo trains will pass via Georgian transit, making the country the key link between the cheapest and shortest roads connecting Europe and Asia. Trade relations between Georgia and China have deepened in recent years, and the Georgian railway received its first cargo train from China in late The two main ports of Georgia are located in Poti and Batumi, though in order to develop the transit potential currently underutilized, the new $2.5 bln Anaklia Deep Sea port will be constructed till the year of Efforts will be made to increase its capacity to 40 mln tons in twelve years as the port is expected to become a trade connection between Europe and Asia, and between China and Europe through the New Silk Road. With increasing passenger traffic and an expanding network, the Tbilisi International Airport is the most efficient and secure cargo centre in the Caucasus Region. Reconstruction of the main runway is currently underway and will be completed in Two other international and one local airport are located in Kutaisi, Batumi, and Mestia. The Central and Eastern Europe's biggest low-cost airline Wizz Air will place an airplane at Kutaisi International Airport on permanent basis in Wizz Air will conduct flights to 11 destinations in 8 European countries, including Berlin, Munich, Sofia and Milan. Ukraine International Airlines and Pegasus Airlines also operate in Kutaisi Airport. Expanding its services, the airport will offer new, affordable flights to several other European destinations. Several local airports including Mestia Airport and Natakhtari Airport are also presented in Georgia. Georgia has also modernized its road infrastructure with some large projects, including the current construction of a primary autobahn that will connect Tbilisi and Georgia s eastern regions to the seaports. The total length of Georgian Railroad is 2,084 km with an operational length of 1,146 km. Estimated to finish in 2017, the Baku-Tbilisi-Kars (BTK) railway will further enhance Georgia s reputation and capacity as a transit country. Energy The country is rich in terms of renewable energy resources and substantial coal reserves, however, only about 25% of country s total energy potential has been exploited thus far. There are approximately 26,000 rivers in Georgia out of which more than 300 can contribute energy sector. Georgia intends to become a regional leader in the sustainable/efficient energy market by The Government is actively investing in the sector in order to achieve energy security and to establish a fully competitive energy market. Water is Georgia s most important natural resource. The country s sizable hydroelectric capacity per capita (40 TWh) ranks as one of the best in the world. This extra capacity holds the promise of export growth and energy self-sufficiency for the country. Currently, Georgia is focused on the development of small and medium-sized hydroelectric power plants to make efficient use of the country s remarkably rich water resources and to maximize domestic potential. Large-scale projects that have been implemented recently include: Khudoni HPP with an installed capacity of 750 MW and an average projected annual generation 1,66 TWh; Cascade of Oni HPPs with an installed capacity of 272 MW and an average projected annual generation 1530 TWh; Cascade of Namakhvai HPPs with an installed capacity of 450 MW and an average projected annual generation 1,6 TWh. 6

7 Entertainment Market Overview

8 Casinos Georgia can be confidently named as a gaming hub for its surrounding countries, given the prohibitions and heavy restrictions on their local markets in neighboring counties. The development of the casino business is keenly encouraged by the Georgian government and supported by corresponding legal reforms. Since the deregulation of the gaming segment, the casino sector has been growing rapidly in Georgia, attracting gamblers from Turkey, Russia, Azerbaijan, Armenia the Middle East. The gaming sector is one of the major contributors to the Georgian economy. Growing since 2009, the turnover of gaming venues reached GEL 2,246 mln (USD 989 mln) in 2015, an increase of 10% compared to the same period in 2014 and by 70% from 2013.The flat tax system introduced by the government has exempted the local and overseas casino operators from income tax, as well as from tax on pay outs. The gaming business charge rates to government are differentiated and are defined by gambling business type, with corresponding quarterly fees required. Tbilisi and Batumi are the cities dominating casino supply. A variety of popular games, like Poker, Black Jack and Roulette, as well as modern slot-machines can be found in the casinos of Georgia. The leading players in the gambling sphere in the Capital include Casino Iveria, Shangri La Casino, Casino Adjara and others. The Millennium hotel will soon be opened in Tbilisi, offering another high-class Casino and up-do-date gaming facilities. As for Batumi several large scale casinos, such as Casino Adjarabet, Casino Iveria Batumi and Casino International Batumi operate in the city. Moreover, the supply will be increased in the near future by several new casinos as high-class operators plan to enter the market in Tbilisi. Such as Millennium Hotel, Sheraton Metekhi Palace and Hilton Garden Inn. The game of poker is becoming increasingly popular in the county. The first ever World Series of Poker (WSOP) Circuit event has taken place in Tbilisi, gathering poker players from various countries, with the Region s largest prize pool offered. The Festival of World Poker Tour National Georgia was also held in spring 2015 for the second time. Turnover of Gaming Venues in Georgia mln GEL ( ) 2,500 2,000 1,500 1, Existing Casinos in Georgia Tbilisi Batumi Rest of Georgia Shangri La Casino Adjara Casino Iveria Iveria (Radisson Blu Batumi) Sheraton Batumi Casino Intourist Palace Casino Golden Palace Batumi Casino Leo Grand Casino Batumi 1, ,032.8 Rooms Hotel Casino (Kazbegi) Ambassador Hotel (Kachreti) Casino Source: Developers, Operators/Property Managers, Colliers International 2, Source: National Statistics Office of Georgia, Colliers International 8

9 Gaming regulations in Georgia 1. A casino operator has to obtain a permit from the State Authorities of Georgia. The permit is issued by the Revenue Service of Georgia; 2. The fees for obtaining the permit are for the whole territory of Georgia (excluding Batumi, Dusheti Municipality nearby the Lake Bazaleti, Gudauri recreation territory, Bakuriani, Kobuleti, Borjomi, Tskaltubo and Signaghi municipalities) no less than (five million) GEL per year (approximately USD 2,2 million) A casino operator in Tbilisi is entitled to a free permit for opening three gaming clubs in the territory of Tbilisi. The permit for operating the gaming club will be granted for no more than the permit granted for casino operation. 3. The validity of the permit is five years. 4. The fee for getting the permit in Batumi, Dusheti Municipality nearby Lake Bazaleti, Kobuleti and Borjomi Municipalities constitutes GEL per year; however, the permit is free in the event the Casino is opened in the recently built hotels in Batumi, Kobuleti and Khelvachauri Municipality (with regard the hotels having no less than 100 rooms), in the villages Anaklia and Ganmukhuri in recently built hotels having no less than 80 rooms. The permit is free within the 10 years upon it is awarded. For hotels to be considered for a casino they must be less than three years old - after the completion of construction works has been officially certified by the State Authorities. 5. In order to obtain a gaming permit, the person shall meet the special requirements defined by the law and special acts of the Government. The requirements are the following: a) Casino Regulations that shall include: the list of tables in the casino, indicating the manufacturers number, title, date of production, manufacturing country; the minimum and maximum bets; the manual for operation; Gaming Rules; Rules of Conduct; the place and the time for issuance of prizes; the time for consideration of the claim; b) Types of coins; c) The type of games that are not indicated in the Casino Regulations are prohibited from being offered. Planned Casinos in Georgia Tbilisi Millennium Hotel Casino Melco Crown Entertainment Casino Sheraton Metekhi Palace Casino Permit Fee According to Geographic location in Georgia Geographic name Source: Colliers International Permit fee Tbilisi GEL 5,000,000 Batumi, Surrounding area of the Lake Bazaleti, Borjomi Municipality, Kobuleti Municipality Batumi Babillon Tower Casino Hilton Hotel Casino Crowne Plaza Casino Hotel Princess Casino Rooms Hotel Casino Swissotel Casino Le Meridien Casino Source: Developers, Operators/Property Managers, Colliers International GEL 250,000 Tskaltubo Municipality - Sighnaghi Municipality - Bakuriani - Gudauri - The rest of the country GEL 5,000,000 9

10 Cinemas Cinema supply in Georgia has seen a rapid increase as cinemas of the highest international standards were added to the existing stock in The total turnover of the sector was GEL 20.7 mln (USD 9.1 mln) in 2015, up from GEL 17.9 mln (USD 7.8 mln) a year before. However, at present, Tbilisi remains the only city where the cinema industry is welldeveloped. Tbilisi s major cinemas include Cavea, Amirani and Rustaveli. Based in Tbilisi, Cavea Cinemas is the leading cinema chain in the county and the fastest growing operator in the south Caucasus. It operates the two largest ultra-modern cinemas, inside the biggest shopping and entertaining centers of Tbilisi Mall and East Point, located at two different ends of the city of Tbilisi. Five screens, with more than 750 seats are installed in Cavea Tbilisi Mall, while Cavea East Point offers the region s largest ten-screen multiplex, including an IMAX screen. Cavea Cinemas is the first provider to install an IMAX theater, greatly King David improving Residence the entertainment experience for the local population. One more cinema of highest international standards with 5 halls and total 500 seats will be opened by Cavea Cinemas in Batumi during Rustaveli and Amirani cinemas are the other most popular cinema houses, located in the central districts of Tbilisi. There are five screens and a VIP hall with a total of 750 seats in Rustaveli cinema and three screens with 650 seats in Amirani cinema. World premieres, as well as local movies are shown in both cinemas, which have the latest technology and 3d projection facilities. Relatively small cinema houses, like Cache and Cinema City, are also popular with Georgian cinema-goers. Hosting from six to 20 people, the cinema halls offer the opportunity to reserve the halls and watch movies ordered individually. The supply of cinemas in other regions are limited to the Apollo Cinema (150 seats) in Batumi and the Didveli Cinema in the winter resort of Bakuriani. A large movie theatre, equipped with modern facilities, opened in the G&G children s centre in Kutaisi in the summer of The cinema will have four screens and two VIP halls, with total capacity of 500. Turnover of Cinemas in Georgia mlngel ( ) Name Cavea East Point Cavea Tbilisi Mall Rustaveli Cinema Major cinemas in Georgia Location Tbilisi Tbilisi Number of screens 17.9 Capacity (Number of seats) 10 1, Tbilisi Amirani Cinema Tbilisi Cinema Apolo Batumi Cinema House Tbilisi Source: Developers, Operators/Property Managers, Colliers International Source: National Statistics Office of Georgia, Colliers International 10

11 Amusement parks, Zoo and other destinations Several large amusement parks have been renovated in Georgia recently and large scale spring season landscaping works have been undertaken by Tbilisi City Hall in main recreational parks and squares of Tbilisi lately. Situated on the highest place of the capital, Mtatsminda Park (Bombora) is the largest amusement park in Georgia. With an attractive panoramic view of the whole of Tbilisi from the park, it occupies more than 100 hectares of land. The park is divided into several zones, including an extreme zone, a zone for families and a zone for children. Various restaurants, cafes and shops are located around the park. The park can be reached by car or public transport, but the most direct route to Mtatsminda from the central district of Tbilisi is via the historical funicular, which has been renewed in recent years. Tbilisi Zoo, heavily damaged after the flood in summer 2015, was soon brought back to life with the mutual effort of the society and the government. The infrastructure was renovated and new species and exhibits have been added to the zoo. Today, more than 200 species are represented in Tbilisi Zoo and it remains one of the favorite places for children to visit. Currently located in the city center, there are plans to relocate the zoo to the nearby area of Tbilisi Sea. Mziuri Theme Park, also known as the City of Children, in the central district of Tbilisi Vake was opened in The park also suffered from the harmful impact of the Tbilisi flood, but it was renovated quickly. The further improvements to Mziuri Park are expected in the nearest future. The works have already been started on the upper part of Mziuri Park, where the café (adopted for people with disabilities), amphitheater and other facilities will be rebuilt as it was decades ago. An educational center, sport complex and new pathways are also planned to open up and make more efficient use of the park territory. Tsitsinatela Park (Firefly) in Ozurgeti municipality, Guria is a summer park located between the two famous sea resorts of Ureki and Kobuleti. The park was opened in 2006 and each summer it hosts approximately 300,000 visitors, mostly children. There are up to 40 modern carnival rides, including extreme ones, for children and family. A pizzeria, a coffee house and a bar can be found nearby. Nearby Tsistinatela in Shekvetili the first park of architectural miniatures will be opened in The new complex will also include the centre of visitors, café and other facilities. The National Botanical Garden of Georgia, based on former royal botanical garden, is considered to be one of the most beautiful places of the capital. The garden is located in the historical part of Tbilisi and occupies up to 100 hectares of land. Over 4,500 species from diverse regions of the world are presented in the garden. Five more botanical gardens are located in the regions of Batumi, Kutaisi, Bakuriani, Zugdidi and Sokhumi. Major Existing Parks in Georgia Name Location Visitors per year Mtatsminda Park Mtatsminda, Tbilisi 800,000 Tsitsinatela Park Guria, between the town Ureki and the city of Kobuleti 300,000 Tbilisi Zoo Saburtalo, Tbilisi 500,000 Mushtaidi Park Didube, Tbilisi 75,000 Rose Revolution Park Gldani, Tbilisi 90,000 Botanical Garden Krtsanisi, Tbilisi 120,000 Vake Park Vake, Tbilisi N/A Source: Operators/Property Managers, Colliers International Other interesting places in Georgia include Tbilisi National Park and Dendrology Park. Tbilisi National Park is located at a distance of 25 kilometres from the capital near the cities of Mtsketa and Tbilisi. With diverse plants and rich fauna the parks occupied up to 25,000 hectares. Located on the are of 300 hectares, Georgia's Dendrology Park keeps more than 700 plant species from world's various geographic zones. The park carries both cultural and scientific function. Turtle Lake (Kus Tba), near the central parts of the capital, is the place where the hot summers of Tbilisi are often spent by locals. Several cozy cafes and areas for a picnic make it an ideal place for weekend recreation. Turtle Lake also serves as a fitness facility as individual and group sport activities are often planned around the lake. Another public leisure park with panoramic views will soon be opened near Lisi Lake - one of the most popular recreational destinations in Tbilisi. The entertainment zone, children s area and green zone, with unique flora, are planned to cover one hectare. Large scale infrastructural projects has been finished in the Lisi Lake area, including the construction of the sulphur bath, stadium and a pedestrian zone, while upcoming projects include velo track. The 6 May Park in Batumi occupies up to 160,000 m 2. The educational and entertainment areas of the park include a zoo, the famous dolphinarium, an aquarium and various other attractions. 11

12 Leisure Market Overview

13 Gastronomy and Wine Georgia's variety of delicious wine and unique cuisine have brought fame to the country and established Georgia as having a strong gastronomic culture. Served at local restaurants and cafés, Georgian food is in high demand, though foreign dishes, both eastern and western, are also quite popular. The turnover of cafes and restaurants has been growing rapidly since 2009, reaching GEL 571 mln (USD 331 mln) in Tbilisi and Batumi dominate the supply of café-bars and fine dining restaurants, while other Georgian cities offer a relatively small number of gastronomic facilities. Traditional Georgian restaurants are the main players in Georgia s culinary market. Khinkali (dumplings with spiced meat and herbs) and Khachapuri (baked dough filled with cheese) are Georgia s famed specialties and many regions offer their own version of these and other famous Georgian dishes. A variety of meats, local cheeses, vegetables and generous fresh and dry herbs are the main components of most traditional Georgian dishes. Number of Restaurants, Bars and Canteens and Meal Delivery (2015) 1, Source: National Statistics Office of Georgia, Colliers International Restaurants Bars Canteens and Meal Delivery Tbilisi Batumi Kutaisi Turnover of Café-bars, Restaurants and Canteens in Georgia mln GEL ( ) Source: National Statistics Office of Georgia, Colliers International Main Market Players Operator MGroup GMT Group AMS Group Kala Group Brands Source: Colliers International In the Shadow of Metekhi, Bread House, Maspindzelo!, and Otium Chela, Puri Guliani, Function Suite, Lounge Bar Funicular and Restaurant Funicular Shemoikhede Genatsvale and Dzveli Kalaki Café Kala, Acid Bar, Café Near Opera, 19 and KGB 13

14 Main restaurant locations in Tbilisi Akhmeteli Theatre Sarajishvili Guramishvili Grmagele Didube Gotsiridze Delisi Medical University Nadzaladevi Tsereteli Vazha-Pshavela Technical University Station Square 4 3 Marjanishvili Rustaveli Liberty Square 1 Avlabari Varketili 300 Aragveli Isani Samgori Main streets of the city River Mtkvari 1 2 Shardeni Street, Kote Apkhazi Street Aghmashenebeli Alley, Beliashvili Street Café-bars, foreign cuisine Georgian restaurants 3 Akhvlediani Street, Kiacheli Street 4 Abashidze Street, Paliashvili Street Source: Colliers International 14

15 Millions Wine Archaeological discoveries prove that viticulture has been a thriving part of the Georgian culture for more than eighty centuries, making it one of the oldest wine producing regions in the world. A wide variety of wines are crafted from grapes indigenous to Georgia. These grapes, unique in aroma and taste, have helped to place Georgia on the world s wine making map. Both European and traditional Georgian wine making techniques are popular in Georgia. However, wine fermented the ancient Georgian way, called qvevri, is unique to Georgia. Using this age-old method, special underground clay jars are used to store grape juice, thus defining the main component of this winemaking tradition. Qvevri has been nominated by UNESCO as an element of Intangible Cultural Heritage of Humanity. Families throughout Georgia grow their own grapes and produce wine. Kakheti is the most important viticulture region, where approximately 65-70% of Georgian vineyards are cultivated. Out of the eighteen aboriginal wines registered in Georgia, fourteen are found in Kakheti. More than 36 mln bottles of wine (0.75 l) have been exported to 46 countries in Russian, Kazakhstan, Ukraine and China are the main wine export partners for Georgia. With its long history of winemaking and the recent addition of several wine destinations, Georgia is poised to become a globally-celebrated spot for wine lovers. The Radisson Wine resort in Tsinandali, Kakheti region is under construction, and will soon be opened. Based on the 19 th century patrimonial estate of Prince Alexander Chavchavadze, this project will contribute significantly to Georgia s cultural wine tourism industry. Leaning on hospitality as a central pillar of Georgian culture, the country offers tourists an opportunity to familiarize themselves with a wide array of indigenous Georgian wine and cuisine in a warm and welcoming environment. Wine Production in Georgia (litre) Source: National Wine Agency of Georgia, Colliers International Major Chateaux in Georgia Region Destination Distance from Tbilisi Kakheti Chateau Mere 90 km Kakheti Schuchmann Wines Chateau 135 km Kakheti Chateau Zegaani 120 km Kartli Chateau Mukhrani 40 km Chateau Mere Source: Developers, Operators/Property Managers, Colliers International Schuchmann Wines Georgia Proposed: Radisson Tsinandali 15

16 Wellness Various winter and summer resorts in the east and west offer visitors many exceptional choices, from beautiful alpine resorts high in the mountains to sunny beaches famous for their magnetic iron. Georgian resorts are renowned for their ecologically clean, balneological facilities that draw visitors who come to take advantage of the restorative mineral waters, natural springs, sand and mud. A number of resorts throughout the country provide up-to-date facilities, built to satisfy a variety of tastes and needs, though the recreational potential of some historically famous resorts is currently underutilized. The use of Tbilisi s natural hot springs for their restorative properties dates back to the 10 th century and bathing in the King David sulphur Residence baths remains an integral part of the culture. The Abanotubani district, in the old part of Tbilisi, provides locals and tourists with hot sulphur facilities, while various public and private baths offer bathing, massage and other treatments for skin and relaxation. Famous for its mineral water, the Borjomi Balneological Health Resort in south-central part of the country is one of Georgia s most visited resorts. Borjomi mineral water is applied for treatment various diseases including cardiovascular and nervous system ones. The water sources located in Borjomi Central Park have recently undergone renovation and a number of hotels and sanatoriums, providing diagnostic procedures and sulphur-based treatments are located nearby. The Tskaltubo Resort is in 20 minutes drive from Kutaisi airport in west-central Georgia, located at metres above sea level. This balneotherapy complex, famous for its unique mineral water, provides adults and children with therapies designed to treat and prevent hypertonic, bronchial and nervous system diseases. Tskaltubo is one of the most promising resorts in terms of wide possibilities of development. Financed by The World Bank, large-scale infrastructural projects were undergone in Tskaltubo. Sanatoriums with valuable cultural heritage elements are well-preserved. With two hotels under current development and 16 others planned to be renovated the resort will become a distinguished medical and wellness tourism destination. The Guria region s Ureki Seaside Resort is famous for its sand that includes rare magnetic particles renowned for their healing qualities a rare and unique phenomenon on the planet. Ureki s sand is recommended for people with lipothophy, cardiovascular and other kind of diseases. Recently renovated, the resort is especially popular with children and adolescents. Upcoming projects in Ureki include further works on water supply and sanitation. In fact, several of Georgia s most popular resorts have recently undergone renovation. The infrastructure renewal at Borjomi is now complete, while refurbishments at Abastumani are underway. The Sairme Resort is another example of a recently renovated property that is gradually regaining its past Soviet-era fame. The hotel Sairme and a new spa centre as well as recreation, shopping and food facilities were arranged in the resort. Sairme s healing springs and ecologically clean environment is ideal in case of disturbance of metabolism and gastrointestinal diseases, while its thermal baths are used to treat stomach-intestinal illnesses, skin allergic illnesses and other problems. The privatization of assets and recreational facilities is believed to be helping various Georgian resorts grow once more. Today, the Akhtala and Tetritsklebi resorts in Georgia s Kakheti region and the mountainous villages of Racha region including Shovi, Utsera, and Gebi to name but a few, are poised to become the next wave of popular wellness destinations. Various high class hotels in Georgia, such as the Rixos Borjomi, Kvareli Eden, Crowne Plaza Borjomi, Gino Wellness Rabath and Schuchmann Wines & SPA are equipped with their own wellness and spa centres, providing a wide range of leisure facilities including swimming pools, baths, steam rooms and more. A number of spa and wellness centres of varying sizes are now open in Tbilisi, offering recreational fitness and swimming facilities. Open and closed swimming pools of varying sizes operate in Georgia, though most modern swimming facilities are located in Tbilisi. Arena, Olympic, Neptuni and the Tbilisi Olympic Swimming Complex are the city s largest, with an approximate total capacity of 1,500 persons. 16

17 Active Leisure Ski resorts sector overview Georgia is gradually earning a reputation as a popular European winter tourist destination. The country s mountain resort microclimates guarantee deep snow cover despite the often-gentle weather conditions. There are five modern ski resorts in Georgia, offering a wide range of budget and family-friendly options, such as freeriding and cheap heli-skiing, and unique winter activities suited to every level of skier and adventurer. The Georgian government keenly supports the country s mountain resort development. They have provided significant funding for the modernization of ski resort infrastructure and facilities, allowing them to extend their season and increase the number of visitors and revenue generated by Georgia s winter tourism industry. Gudauri and Bakuriani, both a short drive from the capital, King David Residence have been popular since the Soviet era, while the relatively new ski resorts in the Svaneti and Adjara regions show considerable potential for future growth and are now undergoing rapid development. Bakuriani, a four-season mountain resort in the Borjomi region, is located on the northern slope of the Trialeti mountain range. The winter sport area situated between the elevations of 1,740 and 2,672 metres offers the most numerous activities, including ski jumps, ski-tracks, snowmobiles, horse-rides and sledges. Toboggan facilities have been added recently, while new ski lifts now under construction will be finished for the ski season. At 2,200 metres above sea level, the Kazbegi region s popular Gudauri Resort is Georgia s largest ski resort. Like Bakuriani ski resort it offers various levels of ski pistes from beginner to advanced. The slopes are covered with snow from December to late April, providing a vast range of options including snowboarding and heli-skiing. Last year the resort enjoyed its earliest season opening ever due to its ability to produce artificial snow and the resort s 1,100- metre-long Gudauri ski run (which meets the highest international standards) accommodated a record number of skiers. Gudauri s development master plan includes a number of future projects, including the full construction and rehabilitation of a water system, construction of a new ski chairlift and three rope-ways, connecting Gudauri and the village of Kobi. The region of Svaneti, famous for its ancient culture, has become the new winter holiday destination. Hatsvali (Mestia) Resort opened last year, allowing guests day and night skiing on its slopes that rise 482 metres up the mountain face. There are modern pistes for both expert and beginner skiers as well as unlimited opportunities for offpiste adventuring. Tetnuldi, another world-class ski resort in the Svaneti region, officially opened in The resort s pistes are concentrated on the northern, western and south-western slopes of Mount Tetnuldi. Tetnuldi is Georgia s second largest ski resort and home to the country s longest run that stretches 9.5 km. Four new drag lifts/rope-ways are currently under construction and are planned for completion in December The Adjara region s Goderdzi Resort is another four-season mountain resort. The mountains are snow-covered from November to April, creating the ideal winter sport area where visitors can enjoy 8 km of pistes situated between 1,724 and 2,366 metres. Major Ski Resorts in Georgia Number of ski runs Total length of ski runs Snowmaking Top elevation Number of cableways Distance from main city Number of rooms Number of beds Occupancy rate (annual) Gudauri km 10 km 3,260 m 6 Tbilisi km % Bakuriani km 3 km 2,700 m 15 Tbilisi km % Mestia 4 5 km - 2,350 m 1 Kutaisi 204 km % Source: Mountain Resorts Development Company, Colliers International 17

18 Other Active Leisure The main cities of the country host various popular musical events including the most famous festivals including GEM Fest, Open Air and Jazz Festivals. Georgian Electronic Music Festival (GEM Fest) is an international annual event held in Black Sea resort Anaklia. Despite the fact that GEM Fest is quite new festival started in 2015 it has already earned a reputation as the main musical event of the country. More than 40,000 guests from various countries are expected to attend GEM Fest in Starting from 2009, the Caucasus region's biggest musical festival Tbilisi Open Air is organized each year. The festival held outdoor that gathers local and international stars like Deep Purple and Placebo is widely popular in the youth. Black Sea Jazz Festival held in Batumi is another important cultural event. In 2016, 10th festival will be held with Georgian and international stars such as The Prodigy, Chris Brown and Nik West. In recent years, Georgian citizens have turned their time, energy and spending towards living a more healthy and active lifestyle. Sports and outdoor-focused activities are popular and often chosen by Georgians as weekend entertainment. A number of companies offer various hiking tours that are popular with both locals and tourists. Additionally, horseback riding, paraplaning, bungee jumping and paintball facilities can be found in or near the capital, while seaside resorts and rivers offer surfing, rafting and other water-related activities. Situated on twenty-five hectares of land, the country s first world-class golf club was opened in the South Caucasus Kakheti region in The club is located on the Ambasadori Kachreti Hotel grounds, uniting three golf courses. As the country s bar and club scene develops, Georgian nightlife is growing in popularity. Most of the famous venues are located in the capital city, though the seaside resort towns of Batumi and Anaklia, popular with foreign guests, also play a significant role in this developing sector. Local and international DJ s, can be found in Georgia s night clubs, the most famous of which include Café-Gallery, Khidi, Bassiani and others. Due to increasing market demand, the fitness club industry continues to expand as companies add new branches and modernize their facilities and equipment. Up to sixty different fitness gyms operate across Georgia, though the vast majority of them are located in Tbilisi. The country s major fitness clubs include Aspria Fitness (with four branches in Tbilisi and a Batumi branch in the pipeline), internationally-known Snap Fitness (with two branches in Tbilisi), Contours and local players including Arena, Club 71 and GYM 1. Several water parks are presented in main Georgian cities such as Tbilisi, Batumi and Anaklia. Europark and Gino Paradise Tbilisi are most famous destinations offering a wide range of entertainment and leisure possibilities like water sliding complexes and aqua bars. Europark was opened in 2007 in Tbilisi. There are four swimming pools and ten attractions for both adults and children. Pools. A pool with artificial waves, relaxation pool with hydro massage and olympic pool can be found in Aqua park of Gino Paradise Tbilisi as well as various facilities for children. 18

19 Culture

20 Thousands Museums Sector Overview Georgia s rich culture dates back thousands of years. Over the years, relics that reveal the country s unique historical heritage have been carefully collected and curated and, today, visitors are able to view a vast collection of historical Georgian artifacts housed in more than 200 museums across the country. The Georgia National Museum (GNM) resides within a chain of buildings in Tbilisi as well as in other regions of Georgia and is the country s largest and most visited museum complex. King David Incorporated Residenceinto the GNM complex, the Museum of Fine Arts is founded on the basis of The National Gallery and exhibits various historical-ethnographic collections. The Open Air Museum of Ethnography occupies 52 hectares of land and represents fourteen ethnographic zones while displaying more than 8,000 Georgian relics. The annual Art Gene festival, that draws large numbers of both locals and tourists, is held in the Ethnography Museum. A new, multi-functional fine art museum complex will be opened this year in Tbilisi, offering temporary exhibition space, conference halls on the first and second floors and a permanent 7,000 m 2 exhibition space on the top three floors. Museums in Georgia s high-mountain regions are among the country s most visited places. With exclusive household items, agricultural tools and weaponry on display, the Omalo and Keselo Ethnographic Museums are located in Georgia s north eastern Tusheti area. This region is famous for its virgin forests and pristine natural beauty as well as its ancient fortresses and, at 83 hectares, it is Europe s largest protected area. In a unique landscape dominated by historic towers, the north western Svaneti region is home to the Museum of History and Ethnography, allowing visitors to see a wide collection of ancient Svan artifacts. The Svaneti Museum was named among Europe s best museums and, following a recent renovation in 2015, the museum now boasts a world-class contemporary design, an educational center and a media library. Number of museum visitors in Georgia 1,600 1,400 1,200 1, ,101 1,066 1, Source: National Statistics Office of Georgia, Colliers International Turnover of theatres and museums in Georgia mln GEL ( ) Source: National Statistics Office of Georgia, Colliers International

21 Stadiums & Arenas The number of sport facilities being renovated or newlydeveloped in Georgia has risen in recent years due, in large part, to the number of international sport festivals that take place in the country. The Georgian government actively contributes to the development of popular sports and their required infrastructure. From July 2015 the tax on property in sport sector was declined by 1000 times to 0.001%. This rate will be maintained till the year of A majority of the country s main sport facilities are located in Tbilisi, however, other cities are gradually increasing their supply. Sector turnover of sport complexes and stadiums amounted to GEL 39.6 mln (USD 17.4 mln) 2015, which is 1.5 times higher than the same figure in Georgia s two largest stadiums - the Boris Paichadze Dinamo Arena (55,000 seats) and the Mikheil Meskhi Stadium (27,000 seats) - have recently undergone renovations to meet the demand for high-quality sporting venues. The Boris Paichadze Dinamo Arena hosted the UEFA Super Cup in Designed to be compliant with UEFA standards, a new 20,000-seat football stadium complex spanning eight hectares is also scheduled to open in Tbilisi in Tbilisi s recently renovated 10,000-seat Sports Palace is Georgia s main multi-functional facility. Its arena easily adjusts to accommodate both sporting tournaments and various kinds of cultural events, including exhibitions and concerts. The 3,300-seat New Sports Palace, in Tbilisi s Saburtalo district, was opened to host the European Youth Olympic Festival in It is equipped with all the infrastructure necessary to meet current standards and it remains under state ownership. While used by local athletes, the New Sports Palace also hosts international tournaments, such as the Judo Grand Prix that took place in A new tennis complex in Mziuri Park, Tbilisi was opened in The USD 2.9 mln complex offers players nine outdoor and two indoor courts and hosts both local and international events. The USD 31 mln new stadium with 20,000 seats will be opened in Batumi. The construction of the stadium is projected to finish in Turnover of sport complex, stadiums and sport clubs in Georgia mln GEL ( ) Name Location Capacity Sport Boris Paichadze Tbilisi Dinamo Arena Tbilisi 55,000 Mikheil Meskhi Stadium Tbilisi 27,000 Tbilisi Sports Palace Tbilisi 9,000 Football, Rugby Football, Rugby Basketball, Judo Shevardeni Tbilisi 3,000 Football Kutaisi Central Stadium Kutaisi 14, Football, Rugby Kutaisi Rugby Stadium Kutaisi 5,000 Rugby Source: National Statistics Office of Georgia, Colliers International Existing Stadiums in Georgia Source: Developers, Operators/Property Managers, Colliers International 21

22 The government is heavily invested in developing Georgia s national rugby team which has, fortunately, led to successful performances, particularly in the Rugby World Cup in Up to ten rugby pitches have been built in recent years and several other large-scale projects are scheduled to finish by the time the country hosts the 2017 Rugby Youth World Cup. With a 30,000-seat capacity, a new rugby stadium in the Didi Dighomi district is expected to be the main location for rugby matches. Several other modern rugby stadiums were opened with help of state sector (stadium Sinatle) as well as private one (Wissol Stadium). One of the country s largest rugby complexes, the 7,000-seat Aia Arena, was opened in Kutaisi in 2015, providing players with four fields and a host of supporting facilities that span nine hectares. Another modern rugby complex with 3 stadiums up to 3,800 seats was opened in Akhaltsikhe. The state-funded construction of several other rugby stadiums across Georgia will provide the country with further rugby venues. Despite the fact that golf is still a relatively new sport in Georgia, it is quickly gaining popularity. The construction of a new world-class, 18-hole golf course in Teleti village, a 15- minute drive from Tbilisi s central districts, is scheduled for completion in It is the second and the largest golf complex in Georgia, with a location providing stunning views of Tbilisi and the Caucasus Mountains and a climate that virtually guarantees year-round play. The site features large elevation changes across its 330 hectares and will include a football stadium and swimming pool, running and velo tracks, a riding route and other sport and entertainment facilities as well as a residential complex. Georgia will host the 2017 UEFA European U19 Championships as well as the 30 th edition of the Woman s European Volleyball Championship. The Men s Youth World Handball Championship will be held in the cities of Tbilisi, Kutaisi, Batumi and Telavi. Planned stadiums and sport complexes Stadiums and Sports Complexes Location Capacity Major sporting events and international visitors in Georgia Event Number of visitors UEFA Super Cup 30,000 European Youth Olympic Festival 20,000 European Weightlifting Championship 5,000 IRB Tbilisi Cup 5,000 Basketball Tournament 5,000 Judo Gran Prix 4,000 Source: Ministry of Sport and Youth Affairs of Georgia, Colliers International Major sport facilities opened in 2015 Sport Facility New Sports Palace Athletics Arena Capacity 3,300 3,000 Swimming Complex 2,000 Gymnastics Place 1,500 Volleyball Gym 1,000 Parasport Development Centre 1,000 Source: Ministry of Sport and Youth Affairs of Georgia, Colliers International New sport palaces Batumi, Telavi, Kutaisi, Gori 3,000 Wrestling House Tbilisi 3, football stadiums Sport Medicine and Rehabilitation Centre Various cities of Georgia Tbilisi 1,000 N/A Source: Ministry of Sport and Youth Affairs of Georgia, Colliers International 22

23 Theatres & Concert Halls Georgia s performance art roots and traditions date back centuries. Today, forty-nine professional theatres (with a total capacity of 13,700 seats) perform almost 5,000 performances across Georgia every year. Of these theatres, 24 are located in Tbilisi, while the cities of Batumi and Kutaisi are also significant contributors to Georgia s cultural life. The Rustaveli and Kote Marjanishvili State Drama Theatres are Georgia s most prominent theatres, with 1,269 and 674 seats, respectively. Located in the capital city, the Tumanishvili Film Actors Theatre and Rezo Gabriadze Marionette Theatre, along with Batumi s Art & Music Centre and the Opera House in Kutaisi, are also among Georgia s most significant theatres. With 2,251 seats, the Tbilisi Concert Hall is the country s largest venue. It hosts a wide variety of cultural events and performances, from local festivals to mega concerts starring international performers. The grand opening of the renovated Tbilisi Opera and Ballet House took place in January This ambitious project took more than five years to complete at a cost of $40 million. Founded in 1917, the Ivane Saradjishvili Tbilisi State Conservatoire is a highly acclaimed institution for musical arts education and a major centre of scientific research in music. Renovated to modern standards, it also hosts important musical events within three halls capable of seating a total of 780 people. The Djansug Kakhidze Tbilisi Centre for Music & Culture is a leading concert organization for symphonic music, promoting classical music in the country and presenting it abroad. The new Georgia Black Sea Concert Hall in the Shekvetili resort is opened in July This state-of-the-art, open concert arena, with a retractable roof, will accommodate performances in all seasons, offering up to 10,000 visitors an opportunity to enjoy a variety of entertainment options while taking advantage of world-class facilities that will include VIP areas, visitor lounges and four cinema screens. Number of Theatre Visitors in Georgia (thousand person) Name 394 Location Number of stages Capacity Rustaveli Theatre Tbilisi 3 1,230 Marjanishvili Theatre Tbilisi Concert Hall Art and Music Centre Opera and Ballet House Tbilisi Tbilisi 1 2,251 Batumi 1 1,100 Tbilisi 1 1,056 Black Sea Arena Shekvetili 1 10, Source: National Statistics Office of Georgia, Colliers International Main theatres and concert halls in Georgia and upcoming supply Source: Developers, Operators/Property Managers, Colliers International

24 Conclusions & Outlook Georgia s leisure and recreation options - and number of destinations offering them - has seen a rapid increase in recent years. Today, this rise is occurring primarily in Tbilisi and Batumi, while other regions are in the early stages of development. It is essential that tourism remains a top priority for the country, as tourism firmly relates with the industries with the highest growth potential. The state and private sector groups dedicated to promoting Georgian culture and the recreation facilities available have been successful. A King David Residence variety of hotels have opened throughout Georgia to meet the increased demand made by local and foreign guests, though the relatively low service level, which can fall short of client expectations, remains a challenge for local operators. Georgia s historically rich culture, famous cuisine and world-class wines continue to draw increasing numbers of tourists. Both infrastructure and the level of services provided need to be elevated in order to meet the demand of the more sophisticated tourists who tend to have higher expectations. Higher-end restaurants and new winefocused facilities, like the numerous chateaux now open, are good examples of this customer service-oriented model, while many entertainment destinations are lagging and have yet to improve their service level. Several sectors, such as gambling/gaming, the cultural art, and the sporting industry have benefited from governmental support in terms of investment, lenient tax, and broad deregulation. Private investment in the casino sector recently increased as the number of higher-end gambling facilities grew and international gambling festivals have strengthened the country s image as a gaming hub. The sports, culture and cinema sectors made particularly large steps in Georgia is becoming famous as a host country for international sporting festivals and large-scale cultural events attended by local and international visitors alike. For these reasons, a number of modern sport complexes, arenas and concert halls have been constructed/reconstructed, while several other new projects are now underway. As for the cinema industry, it has changed from a poorly developed market to one that shows great promise. Recently, two large, high-end cinemas were added to the market in Tbilisi, while several other movie theatres are in the planning stage. A variety of entertainment options, including extreme land-based activities, can be found in the country, but the services supplied by the small number of operators now in business can hardly be compared to the wide range of options found in other famous European tourist spots. As an example, despite plenty of appropriate places to open one, there are no large amusement parks in Georgia. Tbilisi s amusement and theme parks continuously update and improve their infrastructure, but the amount of similar facilities beyond the capital city is limited. The Tbilisi Zoo, one of the major attractions, is planned for relocation out of the city centre, near to the Tbilisi Sea, which should allow for the provision of a much larger and enhanced facility. The government has invested heavily in Georgia s winter resort destinations, making them more popular, lucrative and among the country s top leisure destinations. As for other unique Georgian resorts, some of them have regained their past glory. Unfortunately, the supporting infrastructure and overall condition of the majority of Georgian resorts, famous for their recreational abilities, leaves much to be desired and their great potential remains virtually unexploited. 24

25 APPENDIX PROPERTY REGISTRATION AND CONSTRUCTION PERMITS

26 Property Registration In Georgia, the National Agency of Public Registry is the state institution responsible for the registration of property, registering both transfers between private entities and state-owned properties. In case of private transfer, the purchaser has two options: Via a notary - contract drafting and legalization by the notary and subsequent registration. The notary assumes responsibility for the content of the draft and its legalization. The presence of a translator and his signature on the bilingual purchase document is required and the translator assumes responsibility for the authenticity of texts. Time for preparation of the bilingual document and its legalization varies depending on the notary Via the National Agency of Public Registry - direct submission of the purchase contract for legalization and registration. In this case, the bilingual purchase document is to be drafted directly by both parties or by their authorized representatives. The Agency s representative certifies the signatures and may provide recommendations if the document is not accurately drafted, but does not carry any responsibility for the validity or its content. The National Agency of Public Registry is represented in: a) Public Services Halls (Tbilisi, Gori, Kutaisi, Batumi, Ozurgeti, Mestia, Zugdidi, Rustavi, Marneuli, Gurjaani, Telavi, Kvareli and Akhaltsikhe) and b) regional departments of the National Agency of Public Registry (located in cities throughout the country). Construction Permits For the purposes of construction, buildings are divided into five types: 1 st class buildings - no construction permit is required; 2 nd class buildings - buildings with low risk factors; 3 rd class buildings - buildings with medium risk factors; 4 th class buildings - buildings with high risk factors; 5 th class buildings - buildings with very high risk factors. The permit issuance process is divided into three stages: Stage I - Statement of urban construction terms; Stage II - Approval of architectural-construction project; Stage III - Issuance of Construction Permit; State organs responsible for the issuance of permits: Local self-governmental (municipal) organs - for II, III class buildings within the municipal territory (at stages I and II) except from Gudauri, Bakuriani, Bakhmaro, Ureki-Shekvetili recreation territories and for special regulatory zones on the territory of Borjomi. Local self-governmental (municipal) organs - for IV class buildings (at stages I and II) with the participation of corresponding state organs Local self-governmental (municipal) organs - for II, III and IV class buildings (at III stage) independently (including Gudauri, Bakuriani, Bakhmaro, Ureki-Shekvetili recreation territories and for special regulatory zones on the territory of Borjomi) Tbilisi City Hall - for II, III and IV class buildings in Tbilisi Municipality (at all stages) independently Corresponding local organs of Adjara Autonomous Republic and Abkhazia Autonomous Republic - for II, III and IV class (at all stages) on the territory of the Autonomous Republics Local self-governmental (municipal) organs - II, III and IV class buildings (at stages I and II) for Gudauri, Bakuriani, Bakhmaro, Ureki-Shekvetili recreation territories and for special regulatory zones on the territory of Borjomi - with the participation of the Ministry of Economy and Sustainable Development. Ministry of Economy and Sustainable Development - for V class buildings Ordinary terms per each stage (working days): Stage I 12 days for II and III class buildings 15 days for all IV class buildings, for Gudauri, Bakuriani, Bakhmaro, Ureki- Shekvetili recreation territories and for special regulatory zones on the territory of Borjomi (excluding V class buildings), also for all buildings that require ecological expertise 30 days for V class buildings In the case the property being purchased from the state/municipality (privatization, auction or other form of purchase) the documents should be submitted directly to the Agency. Times and fees for registration 4 working days upon the submitting of documents (ordinary time) - the day of submission of documents is not counted - GEL 50 (registration fee per one property) + GEL 5 for certifying the document (GEL 5 per each document subject to submission) 1 working day - GEL GEL 5 for certifying the document On the day of submitting the agreement in the Agency - GEL GEL 5 Times and fees for renewal of public registry information Online 1 working day - GEL 10 (USD 4.4) Same working day - GEL 40 (USD 17.6) Justice House 1 working day - GEL 15 (USD 6.6) Same working day - GEL 50 (USD 22) 18 days for II and III class buildings Stage II 20 days for all IV class buildings, for Gudauri, Bakuriani, Bakhmaro, Ureki- Shekvetili recreation territories and for special regulatory zones on the territory of Borjomi (excluding V class buildings), also for all buildings that require ecological expertise and for V class buildings 5 days for II, III and IV class buildings 10 days for V class buildings Exceptions: Stage III The special terms for permission process: Construction permits concerning: III class buildings with an intensity coefficient up to 1,500 p/m 2 and for buildings with a height of up to the 14 meters that will be located on the territories where urbanization regulatory plans do not exist and are organized according to land use or which are organized according to the perspective development regulatory plans on the territory of Tbilisi - the permission process may involve II and III stages only The simplified permit procedure may involve just two stages and the permit is issued in the second stage. The terms for the simplified procedure are as follows: Stage I - 12 days for II and III class buildings 15 days for all IV and V class buildings, for Gudauri, Bakuriani, Bakhmaro, Ureki-Shekvetili recreation territories and for special regulatory zones on the territory of Borjomi, also for all buildings that require ecological expertise. Permission fees Stage II (issue of permit) - 20 days for all classes The municipal organs determine the permission fees though the maximum limits are envisaged by the Law: For all territory of Georgia - 1 (one) GEL (USD 0.4) p/m 2 of construction territory For construction of industrial buildings - 5 (five) GEL (USD 2.2) p/m 2 of construction territory Exceptions: Investors seeking the construction of hotels in free tourism zones and investing not less than 1,000,000 (one million) GEL (USD 440,494) per each hotel are exempted from paying the permission fee. 26

27 APPENDIX PRIMARY INFORMATION SOURCES AND DATA USED FOR THE STUDY

28 Primary Information Sources In the process of preparing the research, we were guided by the information provided by property managers, owners, developers, governmental institutions (The National Agency of Public Registry, the National Statistics Office of Georgia, the National Bank of Georgia, the Ministry of Economy and Sustainable Development of Georgia, City Halls). Information from Colliers International EMEA office was used for benchmarking. The following web-portals is also used: Definition and Assumptions DCFTA: Deep and Comprehensive Free Trade Agreement EMEA: Europe, Middle East and Africa FDI: Foreign Direct Investment IMF: International Monetary Fund GDP: Gross Domestic Product GEL: Georgian Lari GLA: Gross leasable area m 2 : Square metre USD: The United States Dollar VAT: Value added tax 28

29 Disclaimer This document has been prepared by Colliers International for general information only. Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. This publication is the copyrighted property of Colliers International and/or its licensor(s) All rights reserved. 29

30 Project Team Mark Charlton Head of Research & Forecasting United Kingdom Zurab Kananashvili Head of Valuation & Advisory Georgia Nikoloz Kevkhishvili MRICS Manager Valuation & Advisory Georgia Ramaz Sharabidze Team Leader Research & Forecasting Georgia Mariam Benashvili Research Analyst Georgia Eliso Burkishvili Junior Research Analyst Georgia 30

31 COLLIERS GLOBAL STATS AT A GLANCE 554 OFFICES 66 COUNTRIES 6 CONTINENTS 16,000 EMPLOYEES $2.5 BN REVENUE $112 BN TOTAL TRANSACTION VALUE 185m SQUARE METERS MANAGED >80,000 LEASE/SALE TRANSACTIONS United States 153 Canada 31 Latin America 24 Asia-Pacific 231 EMEA 112

32 TEAM GEORGIA AT A GLANCE 22 PROFESSIONALS 53 PROJECTS COMPLETED $1.5 BILLION SALES GENERATED 9,500 VALUATIONS CONDUCTED 15 YEARS IN INDUSTRY 2.7 MILLION SQUARE METERS DEVELOPED $310 MILLION FUNDS RAISED 150 MARKET & ADVISORY REPORTS We cover 10 Regional Centers and 59 Municipalites in Georgia BLACK SEA TURKEY RUSSIA ARMENIA AZERBAIJAN CONTACT DETAILS DIR FAX /39 Kostava Street Grato Business Centre 0179 Tbilisi Georgia