The FINANCIAL -- The new phase of Lisi Development, worth more than USD 30 million, will be completed by 2017. Over 300-350 new residential apartments and townhouses will be added to the greenest district of Tbilisi. The limited number of apartments and lack of competition in its segment has allowed the company to avoid the currency shock without any impact. Eco-friendly environment and high standards of construction have become the main criteria for Georgians when choosing an apartment.
“The new phase of the project will be designed by invited Georgian and Dutch architects. We plan to introduce a radically different architectural style toour customers. It will diversify the designs of the green city on Lisi. I will not reveal all of the details but will say that the new design will be conducted with different construction materials. Our previous apartments were mostly covered with brick and wood. The new phase will be designed with stained-glass windows. This will allow residents to enjoy a perfect view of the city and surroundings,” Nodar Adeishvili, Director General at Lisi Development, told The FINANCIAL.
According to Adeishvili, overthe past two years the currency shock has deteriorated the overall economic conditions. However, devaluation did not have an impact onthe sales of Lisi Development. “The only issue is that we could have reached better parameters if it were not for thecurrency shock. Devaluation contributed to a price reduction on construction materials. So, the processes balanced each other out. Accordingly, we managed to avoid the devaluation withoutdamage.”
Founded in 2011, Lisi Development is the first and only development company in Georgia to have rejected the traditional approach to site usage in favour of a more environmentally-friendly option. The sustainable concept of its project is called “80/20”, which entails 80% of the territory being a designated green and recreational zone. The company decided to “build the environment” and meet the needs of the present without compromising on the ability of future generations to meet their own needs. The once-arid Lisi territory has been transformed into a green zone, where people recycle, cut down on carbon emissions and participate in sports competitions.
In his interview with The FINANCIAL Adeishvili talked about the development of the company and its future plans. He underlined the main challenges of the Georgian construction sector.
Q. You rarely find a business segment or company which has not been impacted by the currency shock. How did Lisi manage to maintain stability?
A. We never offer a big share of product for sale. So our segment is always limited. Another benefit is that we are the exclusive providers of such a product. On its side, the demand is constantly increasing. All these factors contribute to the stability of our business.
Q. Traditionally a big share of customers purchase apartments with mortgage loans. Such loans are always offered in a foreign currency. Have you witnessed a drop in demand for mortgage loans among your existing or potential customers?
A. Over 70% of our customers have been using mortgage loans for their final payment. Together with banking loans we offer internal credit. Since devaluation the share of customers using a mortgage loan has not changed.
Q. Lisi Development was established in 2011. Which year would you distinguish as the most important?
A. I would distinguish 2015. When in 2011 we were launching our project many people were sceptical and it was hard for them to imagine why one should live in this place. At that time awareness of Lisi as a prestigious residential district was less than zero. The company spent lots of energy on explaining to and assuring potential customers why they should accept this offer. Since our project became visible and tangible we no longer need to explain anything. Our existing residents are our ambassadors. Their positive feedback is the litmus for the success of our company.
Q. In its relatively short history Lisi Development has won various international and local awards. What is the main factor in your success?
A. The company implemented a new standard on the Georgian market. The sustainable concept of our project called “80/20”, which entails 80% of the territory being a designated green and recreational zone, was really unique. We are the only company that decided to use 80% for green areas and additional infrastructure. Moreover, year by year we try to further develop our standards and add more innovations based on experience gained.
The company stands on two values: to offer a product in line with the demands of our customers; and to improve the view of our city. Any of our new projects will be aimed at suiting the view of our city.
Q. We frequently hear complaints regarding the low literacy and qualifications of employees in the construction sector. How does Lisi Development handle this challenge?
A. We were lucky to gather staff members and partner companies from various fields that are high professionals and create our successful business. Some of our partners running construction are NCC and Anagi. The companies consist of high professionals. A separate company runs monitoring works, quality control, etc. All these companies are guarantors that the final product will be of a high standard as is expected by our customers. They also play a big role in the international recognition and awards that the company regularly receives.
Q. What is the future of energy passive construction?
A. A passive house is not only about heating and cooling abilities. First of all it includes low standards. We are clearly witnessing that the demands of consumers are changing. While choosing an apartment they pay attention to not only location and price, as they did previously; currently they want to know more about construction materials and their quality.Accordingly, the future of passive houses is really limited. It will be important for all construction companies to switch to European standards in terms of ecology and energy efficiency. First of all it will be dictated by market demand.
Q. Would you saythat an ecologically clean environment is the main priority of customers while choosing a residential space?
A. Many companies try to use a green environment as their main advantage in their marketing chains as well as in the name of the company. It is good proof that the environment in which we have to live is becoming trendy. Another issue is how they fulfil this direction. Right now customers pay huge attention toan eco-friendly environment which is important for their well-being and health. This tendency will grow further in the future.
Q. What kind of innovative technologies will be used by Lisi Development in its projects?
A. We were one of the first that started the construction of energy efficient apartments. It allows our residents to reduce over 30% of expenditure on utility bills annually.
Lisi Development has always been an innovation-oriented company. We have implemented various innovative technologies and plan to follow international standards in line with our projects. Right now we are discussing several offers in this direction which we will reveal after the selection process is finished.
Q. Do you see the importance of implementing quality control of construction materials and residential buildings?
A. I think it is necessary to monitor and control how, and with which materials, companies are constructing.
Q. What are the main challenges of the construction business of Georgia?
A. Companies should provide final products which will not damage the view of the city. It should always be a priority for city hall which is currently trying to solve this problem. They plan to ban and limit the height of buildings in various districts. The new general plan of the city should control this issue. Until the regulations are launched, the companies themselves should take care of it. We should not destroy the view of our city simply for the profit of our businesses.
I believe that our mentality and attitude towards the city is changing step-by-step. I was glad to see a video recently where drivers in traffic were giving way to an ambulance in the streets of Tbilisi. It is a good example showing how we are trying to change traditional approaches to various issues.