Commercial Real Estate Rental Market in Georgia

In recent years, the market for commercial real estate in Tbilisi has experienced growing demand, driven by both the development of the business environment and increased investments from international and local companies. The competitive nature of Tbilisi’s commercial real estate market is fueled by economic growth, which supports both the attraction of foreign investments and the expansion of local businesses. In particular, there has been an increase in demand for large office spaces located on a single floor, which helps optimize operational coordination and efficiency. However, such spaces are challenging to find, given the limited infrastructure and availability of commercial properties in Tbilisi’s market.

Rental rates for large commercial spaces in Tbilisi business centers range from $15 to $20 per square meter, depending on factors such as location prestige, infrastructure development, and available services. Prestigious locations with modern infrastructure command higher rental prices, while properties located in less desirable areas or lacking adequate infrastructure are valued lower. Competition for high-quality commercial spaces is intensifying, especially among large international and local companies looking to expand their operations and improve their work environment. This demand has led to a shortage of modern office spaces, driving up prices and making suitable spaces more difficult to find.

Globally, the commercial real estate rental market in developed countries remains highly dynamic and diverse. For instance, office rental rates in business districts of New York, London, and Tokyo are significantly higher than in Tbilisi. In Manhattan, New York, rental prices range from $70 to $100 per square meter; in London’s central business district, they range from $60 to $90; while in Tokyo’s Shibuya and Minato districts, they range from $50 to $80. These high rates reflect the prestige of the location, the level of business infrastructure, and transportation accessibility, making these cities global business hubs. Such high prices indicate both the strength of business activity and the high-quality infrastructure available, providing companies with the best possible services and high employee satisfaction.

In other major cities like Berlin, Paris, and Singapore, office rental rates are comparatively lower, but still higher than those in developing markets. In Berlin, the average rental price ranges from $30 to $50 per square meter; in Paris, it ranges from $45 to $60; and in Singapore, from $40 to $70. These rates reflect the strength of the economic environment and the high level of infrastructure services in these cities. Berlin is particularly known as a hub for startups and tech companies, which drives dynamic demand for commercial spaces. In Paris, high rental rates are linked to the city’s cultural and economic significance, making it an attractive destination for businesses.

Compared to Tbilisi, rental rates for commercial spaces in global metropolises are considerably higher, explained by the unique significance of their locations and the high level of service and infrastructure quality. High rental rates in prestigious areas are driven by the financial and economic importance of these cities, where the headquarters of multinational corporations and major financial institutions are located. Tbilisi’s commercial real estate market has developed over recent years, driven by interest from international companies and the expansion of local businesses. In this environment, competition in the commercial real estate segment is intensifying, leading to higher prices and increased difficulty in finding suitable spaces. The unique location of Tbilisi and its regional role are also important factors attracting further interest from investors.

In the future, the development of the commercial real estate market in Tbilisi is expected to continue growing, particularly with the establishment of new business centers and innovative office solutions. The demand for modern office spaces that occupy a single floor and ensure maximum operational efficiency will remain a key challenge. Addressing this challenge will require additional investments and improvements in infrastructure to increase the availability of spaces and enhance their quality. Attracting investments in new business centers and creating modern infrastructure within them will help both local and international companies develop their activities and improve their work environments.

Such investments will help boost the competitiveness of Tbilisi’s commercial real estate market and integrate it into global competition. Both government and private sector involvement will be crucial for ensuring a more efficient and stable economic environment. Achieving these goals will require adopting new approaches and innovative solutions that will enable the city to further develop its infrastructure and business environment, thus increasing its attractiveness to investors and international companies. Ultimately, this should help Tbilisi establish itself as a global business hub, enhancing the city’s economic potential and improving the welfare of its residents.