Commercial real estate in Georgia is moving from a “niche for locals” to a serious asset class for global investors. Commercial real estate Georgia now includes a growing mix of modern offices in Tbilisi, high‑street retail in major cities, and hotel projects in Batumi and resort regions, all supported by strong GDP growth and rising tourism. For investors, the key questions are simple: where is the demand, what ROI is realistic, and how to choose the right segment – offices, shops, or hotels.
Market Overview
Georgia’s economy has been among the fastest‑growing in the region, with GDP expanding by around 9–10% in 2024–H1 2025, driven by trade, services and tourism. This growth directly supports commercial real estate Georgia, especially in Tbilisi and Batumi, where companies need offices, retailers expand footprints, and hotels absorb tourist flows.
According to Statista, the commercial real estate market in Georgia is valued at roughly 34 billion USD in 2025 and is projected to reach over 42 billion USD by 2030 with annual growth above 5%. TBC Capital and Cushman & Wakefield highlight three core trends:
- rising demand for quality office space in Tbilisi;
- steady expansion of shopping centers and street retail;
- higher returns in hotel and hospitality projects compared to residential rentals.
Office Spaces in Tbilisi
Tbilisi is the country’s business and financial hub, and offices in Tbilisi form the backbone of Georgia’s modern commercial market. Cushman & Wakefield reports that new A‑class business centers such as Illiyard (Vake), Moedani Hive (Avlabari) and projects in Saburtalo have pushed total supply up, with vacancy rising in some A‑class schemes but tightening in good B‑class buildings. In Q2 2025, average asking rents in prime A‑class offices were around 30–31 USD per sq.m per month, while B‑class averaged roughly 23 USD per sq.m, with some reports placing typical B‑class closer to 15–23 USD depending on location and fit‑out.
Vacancy dynamics tell an important story for investors. Cushman & Wakefield notes A‑class vacancy around 26% in early 2025 due to a wave of new supply, while B‑class vacancies tightened from about 6% to 3% by late 2024 as demand shifted to well‑located, cost‑efficient options. TBC Capital’s 2024 report shows average office rents in Tbilisi at 23.4 USD per sq.m with a 5.9% year‑on‑year increase, reflecting sustained demand from IT, outsourcing, and professional services. From Sea Inside’s experience, this creates two clear strategies: income‑focused investors gravitating to stabilized B‑class in strong districts, and value‑add investors looking at under‑managed A‑class assets with room for lease‑up.
Retail and Shopping Locations
Retail is another pillar of commercial real estate Georgia, particularly in Tbilisi and Batumi. Cushman & Wakefield reports that average prices for retail premises in Tbilisi reached about 1 464 USD per sq.m in H1 2025, with a pipeline of around 150 700 sq.m of new malls and outlets under development. TBC Capital notes that average rents in Tbilisi shopping centers hit roughly 24.1 USD per sq.m in 2024, a 7.4% increase year‑on‑year, while vacancy in business centers and major schemes declined to around 12%.
Demand is strongest for:
- street‑level shops on the first floors of new residential buildings;
- units in high‑footfall shopping centers;
- F&B locations in busy districts and tourist zones. According to PB Services, annual income from commercial units ranges roughly from 7% for restaurants up to 12% or more for well‑positioned retail space in Tbilisi and Batumi, with commercial rents per square meter often two to three times higher than residential. For Sea Inside clients, this means that a small, correctly located shop can match or beat the ROI of multiple residential units, but only if tenant quality and lease terms are well‑structured.
Hotel Investments in Batumi
If offices belong to Tbilisi, hotels clearly belong to Batumi and the coastal cities. Hotels investment Batumi has outpaced residential returns in recent years as the city shifts from pure housing boom to more balanced tourism‑led growth. Galt & Taggart and sector reports show that while residential yields in Batumi slipped from about 10% gross to around 7.4% before expenses as prices rose faster than rents, hotel projects continued to deliver double‑digit returns.
According to analytical overviews, branded hotels in Batumi achieved occupancy of roughly 68–71% between 2022 and 2024, with average daily rates climbing and net returns often reaching 10–17% annually for well‑run properties. Batumi’s luxury hotel segment in particular shows strong ADR (around 120–130 USD) and diversified demand from Asia, the Middle East, Eastern Europe and the UK, reducing reliance on any single source market. Sea Inside sees growing investor interest in hotel rooms and branded apart‑hotel concepts, where buyers purchase individual units but benefit from professional management and a shared hospitality brand.
Profitability and ROI
For investors comparing different segments of commercial real estate Georgia, returns and risk profiles vary:
- Offices in Tbilisi
- Typical gross yields often fall in the 7–10% range depending on building class, tenant mix and location.
- Long leases (3–5+ years) with corporate tenants provide income stability but require more due diligence on covenant strength and building quality.
- Retail and shops
- PB Services estimates 7–12% annual income from commercial units, with top‑tier retail sometimes exceeding this range in busy urban locations.
- Tenant turnover and sector risk (FMCG vs. fashion vs. F&B) matter; the fast‑growing FMCG segment in Georgia is expanding revenues by 16–20% annually, driving demand for neighborhood stores and supermarkets.
- Hotels in Batumi and resort projects
- Residential rentals in Batumi now yield roughly 7–8% gross, while hotel investments can reach 10–14% net ROI in well‑located projects.
- Some branded schemes market guaranteed returns around 10% in USD with upside to 14–17% based on performance, significantly above typical residential yields.
From the Sea Inside perspective, offices and retail often suit investors seeking stable, multi‑year cash flow, while hotels and hospitality projects appeal to those willing to accept higher operational risk for potentially higher ROI. Combining one “stable” commercial asset with a more dynamic hotel or apart‑hotel exposure is a common portfolio approach.
Where It Makes Sense to Invest
When deciding where to open a business or buy to lease, it helps to match city and asset type:
- Tbilisi – offices and urban retail
- Best for head offices, co‑working, medical and educational centers, and high‑street or mall‑based retail.
- Strong fundamentals: largest labor market, most diversified economy, growing demand from IT and professional services.
- Batumi – hotels, apart‑hotels, tourist retail
- Strong fit for hotel rooms, branded apart‑hotels, and street retail targeting tourists (cafés, convenience stores, services).
- Residential ROI is moderating, while professionally managed hospitality assets still show attractive yields.
- Secondary cities and regions
- Niche opportunities around logistics, warehouses, and tourism clusters (wine tourism in Kakheti, ski resorts like Gudauri and Bakuriani).
- Typically higher risk and more specialized – suitable for investors with a clear operational plan.
Sea Inside often advises clients to start with a core asset in Tbilisi or Batumi, then gradually expand into more specialized segments once the local market and regulations are well understood.
Conclusion: Practical Tips for Investors
Commercial real estate Georgia offers a mix of growth and income, but each segment—offices, shops, and hotels—behaves differently and requires a tailored strategy. Offices in Tbilisi benefit from rising corporate demand and relatively transparent rent benchmarks, while hotels investment Batumi is driven by tourism and can outperform residential yields when managed professionally. Retail stands in the middle: strong potential in prime locations, but sensitive to tenant selection and consumer trends.
For investors considering their next move, Sea Inside specialists usually recommend:
- Start with clear goals– income vs. capital growth, active vs. passive involvement.
- Compare segmentsusing realistic ROI ranges (not brochure promises) and local vacancy and rent data from sources like TBC Capital and Cushman & Wakefield.
- Focus on management quality– a good operator or property manager often makes the difference between “average” and “excellent” performance.
With disciplined analysis and local support, commercial real estate Georgia can become a solid part of a diversified international portfolio, whether through offices in Tbilisi, retail units, or hotels investment Batumi aligned with the country’s long‑term tourism and economic growth.
