The Potential of Georgia’s Logistics Infrastructure

Georgia’s warehouse real estate market appears to be on the verge of a transformational shift. A market that for years developed in a largely uncoordinated and fragmented manner now faces serious challenges — but also unique opportunities for growth. According to the latest research by TBC Capital, the average warehouse occupancy rate in the country stands at just 57%. While this figure may suggest a system safe from overcapacity, a deeper analysis reveals a far more complex picture.

Georgia has a total of 2.2 million square meters of warehouse space, but only 33% of this is available for lease — the rest is used directly by the owners themselves. This points to a market heavily oriented toward internal use and highlights a significant shortage of professional, multi-tenant warehouse facilities. Tbilisi continues to serve as the logistical heart of the country — it is home to 68% of all leasable warehouse space, with an occupancy rate of 77%, signaling both strong demand for logistics services and a relatively higher level of service.

A regional breakdown makes it clear that logistics capacities are unevenly distributed. Kutaisi, Poti, and Batumi — despite having significant geographic and infrastructural potential — are only partially capitalizing on these advantages. Kutaisi operates with low occupancy (36%), while in Poti, the figure stands at just 21%, despite the city being one of the country’s key logistical centers. Poti’s terminals and transit companies handle large cargo volumes, which means that formal occupancy data may not reflect the full scope of actual cargo movement. In Batumi, occupancy remains at just 39%, despite relatively high rental prices ($3–$6 per square meter).

Despite this uneven usage, the overall outlook is optimistic. In 2023, demand for warehouse capacity reached 38.6 million cubic meters, and in 2024 it grew by another 11.6%, driven by increased trade and transit activity. The most interesting insight comes from TBC Capital’s forecast: from 2025 to 2028, demand for warehouse capacity is expected to grow by an average of 9% annually. This points not just to a trend, but to a structural transformation — one that demands a more organized, standardized, and innovative infrastructure.

Rustavi stands out as a city with untapped potential. At present, its logistics market is fragmented and underdeveloped, but thanks to its strategic location and the clear market vacuum, it could emerge as a new center of growth — provided there is targeted investment in modern logistics facilities.

Today’s situation shows that Georgia’s logistics market is still seeking stability. Unpredictable occupancy levels, inconsistent pricing, and the dominance of small-scale operators create an ecosystem that is highly dynamic but difficult to forecast. At the same time, these very characteristics present a unique opportunity for new players, investors, and policymakers to develop a more coordinated, digitally managed, and future-oriented logistics infrastructure.

If Georgia aims to become a true logistics hub in the region, it must not only expand warehouse capacity, but also improve service quality, introduce professional standards, and integrate digital technologies. These will be the driving forces behind the next phase of market growth — a market that is still using only a portion of its full potential.