Despite their closeness to a man-made reservoir that locals proudly call the Tbilisi Sea, the Vazisubani and Varketili areas of the Georgian capital are not exactly tourist magnets. That is, unless a visitor to the city is interested in seeing dusty streets and rows of dilapidated communist-era blocks of flats. Yet, this is the place where Chinese conglomerate Hualing Group is building a $150m development that will include an upscale hotel and a number of trading pavilions and residential buildings.

“When I realised I was going to be working here, I was terrified. There was nothing here, just rubbish,” says Tinatin Shishinashvili, corporate communications manager at Hualing Group. “It is great to see how this bedroom community, with no commercial activity whatsoever, is transforming.” She points to the hotel building and comments that it has risen eight floors in the past three weeks.


Ms Shishinashvili is not the only one excited about Hualing’s project, which is designed to serve as the Olympic Village for the summer 2015 European Youth Olympic Festival. “I am very proud of that development. And the fact that since it is a private investment, it will come at no cost to our residents,” says Giorgi Ugulava, the mayor of Tbilisi.

According to Mr Ugulava, the fact that Hualing decided to launch its biggest foreign project in Tbilisi and that the European Olympic Committee chose the city both show the changing image of the city and are a test of how Tbilisi can deliver big projects. “We are fully committed to doing everything the right way. This event opens the possibility for the city to host even bigger tournaments in the future,” says Mr Ugulava.

A taste of luxury

The Olympic Village is the most prominent of the projects transforming the Tbilisi’s landscape, but others are in the pipeline. Azerbaijani developer AS Group is working on Dirsichala, a 22-building residential complex, while recently the city has seen the opening of Gino Paradise, a 22-hectare water park, and a logistics centre constructed by Austrian transport firm Gebruder Weiss.

Besides these, in 2014 Tbilisi's local government is planning to construct a cable car that will link the city centre with the theme park located at Mount Mtatsminda, which overlooks Tbilisi. “Just flying over the city to get to us will be an attraction in itself,” says Temur Buskadze, logistics and transport officer at Mtatsminda Park. “And there will be so many more visitors coming to us, given that the station will be located right outside the Radisson hotel.”

The building housing Tbilisi’s Radisson hotel serves as another example of the transformation the city has undergone in recent years. Built in 1967 as the Iveria hotel, the building was a Soviet take on luxury tourism. However, the collapse of the Soviet Union led to the hotel’s demise, and in 1992 the building became a home to more than 800 Georgians displaced by war in Abkhazia. In 2004, the hotel was taken over by the Radisson international hotel chain, reopened in 2009 and is now one of the region’s most popular hotels.

Privately built

To put the hotel and all the other new developments across the city in perspective, only 10 years ago Tbilisi struggled with lengthy power cuts occurring on a daily basis, and two decades ago was the scene of a violent coup d’etat. Mr Ugulava admits that the whole country has come a long way since regaining independence in 1991. Yet he also admits that there is still a lot of room for change in his country.

“In Georgia, as in all former Soviet republics, the city is still treated as a stranger. It is hard for people to see the connection between new developments and their everyday life,” he says. Ms Shishinasvili agrees that Hualing’s investment, although providing more than 500 jobs for local residents, was initially seen as an attempt to build a Chinese colony in Tbilisi.

Moreover, most of the construction seen around the city is funded privately. This is not because of a surplus of private capital, however. “There are many projects that the city really needs to implement. They are started already, and some of them nearly finished, but unfortunately they are stopped by the government,” says Mr Ugulava.

It is true that many publicly funded projects have ground to a halt, and Tbilisi’s mayor is clearly at odds with the national government, led by the Georgian Dream coalition since October 2012. At the same time, Mr Ugulava believes his city and the country in general have much to offer investors. “At the end of the day, there is no other choice for us than to be open, both for visitors and for companies willing to do business here. Openness is an important part of Georgian nature and culture,” says Mr Ugulava.

An emotional connection

That culture can be very attractive for investors, according to the mayor. Georgia is not only one of the oldest wine-producing regions in the world, but can also boast a distinctive cuisine which shows the overlap of European and Asian influences. And apart from that, says Mr Ugulava, the residents of Tbilisi have the ability to make everyone welcome. “You might forget the architecture, you might forget the taste of wine, but you will not forget the way this city made you feel,” says Mr Ugulava. No wonder then that the city’s free wi-fi service is called 'Tbilisi loves you'.

Nevertheless, Mr Ugulava is under no illusion that showing the love is all that is needed to bring investors to his city, but are a good way to grab their attention. “As a potential investor, you will of course look at stability, the tax code, the credit rating and so on,” says Mr Ugulava. “But there are hundreds of locations we compete with, so the emotional connection encourages investors to look at us.”