The Skyscraping Builder
Once a construction worker, Gia Bitsadze now runs his own real estate development firm. The Alliance Group founder raises the bar every time he reaches a new height.
"Sky is the limit” – Gia Bitsadze throws a look at the grand poster of the Alliance Palace and smiles back at me with utmost pride. Galleried walls speak more than words.
With his team of friends, whom Gia calls his coworkers, the Alliance Group has built more than 20 residential complexes and aparthotels, as well as 5000 apartments, covering more than 1,200,000 m2 of construction area in total. Most of the projects in the company’s portfolio are located in Batumi, Adjara. Bitsadze, 51, has been a serial entrepreneur since the late 80s. Gia’s Alliance Group, founded in 2005, is the market pioneer: “We built the very first modern residential building in Batumi,” he says.
Batumi of Gia’s boyhood has changed a lot. During Soviet times, all cities looked alike – the true story of Eldar Ryazanov’s film Irony of Fate. Identical, unimaginative multistory apartment buildings could be found in every city, town, and suburb. The teenage construction worker of Kolkhidmsheni was busy draining out marches and building bridges. The young man with a 120 Ruble salary has climbed the ladder to the top. Gia Bitsadze stripped Batumi of its Soviet uniform. He proved to have a good gut feeling – a year later, Adjara’s renaissance period started. Batumi’s real estate sector made a tremendous breakthrough; dozens of new players emerged on the market. 1,218,913 m2 of residential and 337493 m2 of hotel construction area were added to the resort in 2015 alone. The total number of beds in Batumi’s hotels and hotel-type accommodations in 2014 reached 5182 (in 2785 rooms). (Source: GeoStat).
“Innovation is what the Alliance Group is known for,” says Bitsadze. Another know-how that Gia’s company takes credit for is the aparthotel concept. In 2009, construction of the first residential hotel was launched. “The new business model turned Batumi into an investment-friendly place,” he adds. Later in 2015, the Alliance Group took things to the next level. The developer united a multifunctional aparthotel and a world-renowned upper-class hotel brand under one roof. According to the agreement signed between the local developer and Marriott International in Zurich, Courtyard by Marriott will be located on the first six floors of the 41-storey Alliance Palace complex, distinguished by its exclusive architecture. “Our early interactions with the Alliance Group were positive, and I think both sides saw the benefits of operating this Courtyard by Marriott hotel under license. Maintaining the integrity of our brands is important to us. Selecting the right partner was a key component of this deal,” said Philip Andreopoulos, Vice President for Franchise Support Europe at Marriott International, about the company’s franchise partner. The total investment budget of the project is $ 40 million. The potential buyer of the Alliance Palace’s premium class apartments is a person with small and medium-sized savings ($30 to 100,000) ready to invest in reliable property. The owner is authorized to rent out the property independently, let the international apartment management company handle it, or sell it later for a better price. “It is a safe bet that you can gain additional profit from your investment,” says Gia Bitsadze. “You get income with no fear of losing money, and become a proprietor of real estate the value of which has increased dynamically.” The starting price for the floor area at the Alliance Palace multifunctional complex has increased from $750 to $950 per m2 in less than a year’s period. By the time the complex is fully constructed, the indicator will reach as high as $1600 per m2. The Alliance Palace will open its doors to guests in 2018. “We owe 80 percent of our sales to foreigners, who come mainly from Russia and Ukraine. Saudi Arabia, UAE, the EU and the USA are also among the top potential buyer markets,” notes the Alliance Group founder. Restoration of the visa-free regime with Iran, which was cancelled by Georgia in 2013, has been welcome news for local developers. The company intends to launch a sales office in Tehran, along with planned expansion to the UAE and US markets. Currently, the Alliance Group is represented in six countries: Ukraine, Russia, Kazakhstan, Israel, Germany, and the United Kingdom. Sales in the UK are managed by Gia Bitsadze’s 22-year-old son Temur Bitsadze, who studies at the University of Exeter. According to the company’s short - and medium-term development strategy, the Group will offer local and foreign investors new opportunities to benefit from. The Alliance team will build aparthotels in Goderdzi ski resort and Mestia, as well as in Bakuriani, where the developer is already represented.
It is little wonder that for a person brought up by the seaside, tourism would be the field he would wish to establish a business in. Gia Bitsadze established Georgia’s first ever tourist agency in 1990. Three years later, war started in Georgia’s breakaway region of Abkhazia, and the country was no longer a place for holiday-planning. Gia’s entrepreneurship story takes start in 1989 – in exchange for nuts, he imported German beer Holsten. Times were tough. Notwithstanding the unfavorable circumstances, the target-driven businessman never got intimidated by challenges, neither when his importing business failed in 1998 because of wrongful political interference by the local government, nor when his gas and petrol stations got closed for the same reason in 2001. Left high and dry, Gia first thought of his family: he had a wife and two kids. “I had no right to give up, even if it meant swimming against the current,” says Bitsadze. He gave the restaurant business a try, and succeeded. “Nothing ventured, nothing gained,” Gia Bitsadze sums up his phoenix-like story.
With his x-ray look and quick grasp of things, the cautious businessman gets all the insights. “My golden rule – or golden skill, as you may as well call it –is that I choose the right people. You can always find a diamond in the rough,” he says. Alliance is a Middle English word of Old French origin (aliere), and it carries corporate philosophical content. “Team work is our company’s main strength” – his velvety voice makes every word sound reliable. Bitsadze needs no loud remarks to make himself heard. He acquired discipline and a healthy lifestyle in the army – jogging 7 km is his daily norm. “When it rains, I prefer swimming instead,” he says. The senior lieutenant has a noteworthy deed to tell about: “Granted for exceptional bravery” – Gia recalls his military days. For six months, the 20-year-old soldier had seen no daylight, as serving in the air defense radio-technical regiment required underground trainings.
Bright, spacious areas immediately catch the eye when looking through the rendered images of the Alliance Group’s two new offices in Batumi and Tbilisi. “Developing state-of-the-art architecture is our philosophy”, says Gia Bitsadze. Glass – the fundamental material of modern architecture – is used generously (22 thousand m2 in total) in the developer’s trend-setting constructions. The founder’s see-through business card again highlights the company’s transparency-focused image.
The next chapter of Bitsadze’s story is set on Tbilisi’s residential market. The creators of Batumi’s architectural revolution are setting their sights on the capital city. “Unique design, affordable price range, and high quality” – Gia names the three major tools for the successful development of the Group’s strategy. “The premium segment is our corporate niche,” he adds. The selling price of newly-built residential apartments in Tbilisi varies from $ 500 to $ 3500 by type. In total, construction permits for 3,889,860 m2 of residential floor area were issued in 2015. (Source: GeoStat). Gia Bitsadze says their project is one in a million: “Think the Empire State Building in New York, the Burj Khalifa in Dubai, or Gaudi’s Catalan style that adorns Barcelona. The Alliance Group will build an architectural wonder of the modern world in Tbilisi.”