The FINANCIAL -- After successfully completing its fifth residential complex at Tamarashvili 6, development company m2 plans to launch two new projects this year. The first premium line project -‘Skyline Residence’ - is already under construction. Having a diversified segment was the main contributor to the company’s positive sales dynamic despite the dramatic devaluation.
Established in 2006, m2 currently has five completed and four ongoing projects. Last week the company opened its fifth complex atTamarashvili 6. ‘Optima Isani’ - the first project of the Optima line will also be completed very soon, in July 2016. ‘m2 at Hippodrome 2’ - a 819-apartment complex, will be completed in October 2018. It should be noted that 30% of this project (247 apartments) has already been sold. The company has just started construction of ‘m2 on Kazbegi 2’, which is located at Kazbegi Avenue 15. Its construction will be completed in 2018. Sales of this project are about to start. A three-star hotel under the brand name ‘Ramada Encore’ will also be built as part of this project. The hotel will be designed to hold 152 rooms. In addition, the first premium line project of m2 - Skyline Residence - is already under construction. It is located in Sololaki and will incorporate 19 exclusive apartments, a health club and open swimming pool overlooking old Tbilisi.
Construction of the energy efficient complex m2 at Tamarashvili was completed three months ahead of schedule. The company is now beginning the process of handling over fully-renovated apartments to their future residents. m2 on Tamarashvili is a 270-apartment complex, consisting of two 19-storey blocks.
The project is distinguished by a green environment - perennial plants and a specially created square alongside the buildings. For more comfort and security the complex will have its own security, cleaning and landscaping services. Also, for additional safety reasons, the complex is equipped with a fire alarm system in accordance with international standards, including fire detectors on each floor and fire-resistant doors in the hallways.
“In 2016 we plan to launch two new projects in the most prestigious places - Chavchavadze Avenue and Melikishvili Street. In addition, several residential complexes are in the design phase,” Irakli Burdiladze, Deputy CEO at m2, told The FINANCIAL.
“The rapid change of the exchange rate slowed down the process of purchase to a certain extent at the first stage. However, this factor did not cause dramatic changes in our sales. Our company has a wide choice of apartments to offer in terms of price and location. In accordance, our potential customers can choose an apartment in line with their solvency capacity. It should also be noted that the rate of instability changes consumer behaviour. It increases the decision-making process, because at such times people become more careful about decision making. The recent exchange rate stability showed that the market has returned to previous dynamics,” Burdiladze said.
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 since the devaluation?
A. We believe that this process has not forced potential clients to reject a new apartment purchase. They still have a need for it. It is significant that increased competition among banks contributed to a reduction of interest rates on mortgage loans. m2 has signed an agreement with several commercial banks. Accordingly, our customers can take out mortgage loans from Bank of Georgia, Bank Republic and TBC Bank with competitive rates. This enables more customers to buy an apartment with the support of their desired bank and desired conditions.
In addition, this year we offered new flexible payment terms, called‘10/90’ to our customers. It allows them to pay only 10% of the total cost till the end of the construction process, while the remaining 90% can be covered up to 6 months after completion.
Q. m2 was established in 2006. Which year would you distinguish as the most successful for your company and why?
A. Our company is developing and growing from year to year more and more. In our view, the success of the development company is determined by its already-started, within a defined period or earlier-completed, and successful, projects. For example, ‘m2 at Tamarashvili’ has been completed two and a half months earlier than planned. We believe that 2016 is better than 2015, but worse than 2017 will be. It’s a joke. In fact 2015 was also successful. We started the most large-scale project ‘m2 at Hippodrome 2’ and also offered the first project of our premium lineSkyline Residence.
Q. With its new line - Optima - introduced in 2014, m2 started creating projects for the middle and low-end segment. How are the sales of your company divided between the medium and high-end segment?
A. This project has very good references. m2 was the first to start offering fully renovated, energy-efficient apartments at an affordable price - USD 29,000. It was unprecedented, a sensational price for that time. Over 70% of Optima Line apartments are already sold. This is quite a good result. As mentionedabove, this project has been successfully constructed and fully-renovated apartments will soon be delivered to their owners.
Q. What kind of innovative technologies are used by m2?
A. m2 was one of the first to start building with energy-efficient materials and we established this trend. We are pleased that other companies have followed us in this venture. Residents of our Nutsubidze, Kazbegi, and Tamarashvili streets save up to 23% on utility bills due to the energy efficient components. The company started using a modern façade and fire protection systems. It should be noted that m2 continues the search for innovation and each new project is upgraded from the previous one in this way.
Q. The Georgian real estate market is still lacking international standard office space. Is m2 planning to enter this segment?
A. The company has already started work in this regard. Office as well as commercial space will be offered in our new complex on Kazbegi Avenue. By the way, there will also be a kindergarten in this complex.
Q. Please can you describe to us what residents of m2 are like?
A. Our customers are people who appreciate quality, security and surrounding environment. Potential residents of our houses pay huge attention to the quality of construction, materials and repairing works. They value security and deadlines of completion, which we always meet. Ecology and clean environment have become crucial nowadays. Accordingly, m2 complexes are surrounded by a green environment.In this regard, m2, and its residents are in harmonic convergence.
Q. How has the establishment of m2 influenced the Georgian real estate market?
A. m2 has significantly contributed to the development of the Georgian real estate market. We supported the return of customers’ confidence towards the development sector that was damaged bythe 2008 crisis. m2 is introducing new standards in construction, which is very important for the development of this sector.