Georgia Capital Financial Highlights
Private late
stage portfolio
Housing development business overview
Investment rationale
■ Shortage of housing from Soviet era combined with Georgian tradition of multi generations living
under one roof - average household size is significantly higher at 3.3 compared to Eastern or Western
Europe
■ Most of the housing stock dates back to Soviet era and is amortised
■In line with the economic growth, urbanization level is expected to increase from current low level
Value creation potential
Unlock land value by developing housing projects
■ Development of third-party land - franchise m² brand name.
■ Earn Construction management fees from third-party projects and bring construction works in-house
Household size further reduction driving demand for
housing market
Average household size and home ownership, latest available data
m
უძრავი ქონეგა
REAL ESTATE
Significant room for further growth in mortgages
GEORGIA
CAPITAL
Mortgage loans to GDP %, 2018
45% 43% 43%
41%
36% 35% 31% 30%
28%
25%
22%
17% 16%
14%
13%
Spain
France
Source: IMF, Central banks
28% increase in the number of transactions
in Tbilisi in 2018
Finland
Malta
Germany
Belgium
Estonia
In 2018 the number of residential unit transactions peaked at 34,600 units with
record growth and the share of new apartment sales has been increasing each year.
Total share of new apartments sold
59% 57%
54% 60% 54%
75% 71% 76% 69% 68%
33%
38%
52%
57%
60%
Slovakia
Austria
Ireland
Italy
Lithuania
Latvia
Slovenia
Georgia
Most of the housing stock needs
replacement
Around 205,000 units (62%) of the apartments were built
between 1961 and 1990 and are out of their usable lifecycle.
205
92% 91% 90% 84% 97% 83% 85%
82%
90%
69%
Thousands
2014-2018 CAGR - 16.8%
34.6
27.0
Thousands
66
22.3
53
18.6
17.8
20.8
15.3
6.2
6.7
11.6
7
3.3 2.8 2.8 2.8 2.6 2.4 2.3 2.3
2.2
2.2
12.4
11.1
10.6
11.7
13.8
<1960
1961-1990
1991-2005
2006-2019
Georgia Croatia Slovakia Poland Romania Bulgaria Hungary EU Estonia Lithuania
Average Household Size
Urbanization Level
Source: Eurostat, TBC Capital, World Bank, National statistics office of Georgia.
2014
2015
2016
2017
Home Ownership
Old apartments sold New apartments sold
2018
Apartment units by development period
Source: Galt and Taggart
Source: TBC Capital
Page 36View entire presentation