Project description
and objectives:
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The proposed project will finance International Estate Investments’ development of a modern mixed-use complex in Tbilisi, capital of Georgia. The complex comprises a 187-rooms 5-star hotel, 30,000 sqm of Class A office space, approximately 90 flats, 550 parking spaces, a fitness centre and conference facilities. The complex will be operated under the Park Hyatt brand.
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Transition impact:
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The proposed project is the Bank’s first hotel debt financing in Georgia.
The Tbilisi property market is at its nascent stage and requires substantial capital resources for the financing of the construction of new properties. The Project significantly contributes to the structure and extent of the Georgian real estate market by providing new supply of quality products to the market. This will have the desirable effect of triggering greater competition in the property sector.
In addition, the Bank’s investment will facilitate the development of the local hotel, office and residential real estate segments, transferring skills and know-how to the local economy during the construction, implementation, and management phases through backward linkages in the local construction sectors. Local contractors will be engaged in construction works, which should facilitate the skills transfer and help bring local skills up to international standards.
Finally, due to the Bank’s involvement the Project will set a new standard for contractual practices in real estate project finance in a market that is currently dominated by vertical integration as well as poor design and execution.
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The client:
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International Estate Investments (a limited liability company registered in Georgia) which is 100% owned by Loyal Property Group B.V. (a company registered in the Netherlands).
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EBRD finance:
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The Bank will provide senior and mezzanine debt financing in a total of USD 110.7 million:
- A Senior Loan of USD 100.7 million structured as A/B Loan comprising Bank ‘A’ loan of USD 25.2 million and Participants (commercial banks) ‘B’ loan of up to USD 75.5 million.
The Senior Loan will comprise two tranches:
(i) a commercial tranche to be repaid from office and hotel revenues; and
(ii) a residential tranche to be repaid from residential sales proceeds.
- A Mezzanine Loan of USD 10 million structured as A/B Loan comprising Bank ‘A’ loan of USD 2.5 million and Participants (commercial banks) ‘B’ loan of up to USD 7.5 million.
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Total project cost:
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USD 200.8 million.
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Environmental impact:
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Screened B/0. The environmental due diligence to date indicates that the project has been developed in accordance with good international practice (including Hyatt's own environmental, health and safety standards) and there are no significant environmental issues to prevent the further development of the Project. All necessary municipal and governmental approvals have been obtained for the project. Hyatt (the operator for the hotel and office) has been closely involved in the project from the very beginning and opined on the design, budgeting and technical specifications to ensure that the quality of the development is in line with Hyatt's international standards. The Project will be required to comply with national and EU environmental, health and safety standards and to submit an annual environmental report to the Bank.
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Technical
cooperation:
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None.
For consultant opportunities for projects financed by technical cooperation
funds, visit procurement
of consultants.
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Company contact:
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International Estate Investments-Georgia LLC
Office Address:
Mr. Kakha Sharabidze, CEO
King Erekle II Str., 2nd Turn,
Tbilisi 0105, Georgia
Tel/Fax: +995 32 934052; 920958
E-mail: office@loyalcapital.ge
Website: www.loyalcapital.ge
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EBRD contact:
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Julia Stepanova, Operation Leader: stepanoj@ebrd.com
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Business opportunities:
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For business opportunities or procurement, contact the client company.
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General enquiries:
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EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168; Fax: +44 20 7338 7380
Email: projectenquiries@ebrd.com
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