Capital Locus secured EUR 7 Mill for Grand Mall from EBRD and Bank of Georgia within risk sharing facility framework.
Grand Mall – modern shopping and entertainment centre in Batumi, Georgia – will start its operations in the summer 2023.
Grand Mall is unique in many respects. It is a modern shopping and entertainment centre located in the touristic center of Batumi. It has high visibility and is easily accessible by public and private transport.
The concept and the design of the Grand Mall were developed by professional companies with decades of experience in the development and management of shopping malls in Europe.
Grand Mall has a significant impact on regional development as an employer. It will be the largest shopping and entertainment centre in west Georgia creating more than 750 new working places.
More than 100 brands will be present in Grand Mall with a GLA of 24,000 square meters. Currently, the most popular shopping brands in Georgia are available only in the capital city of the country – Tbilisi. From summer 2023 all these strong brands will be present in Gand Mall, Batumi.
Besides utmost preferred shopping opportunities for strong fashion brands such as Massimo Dutti, ZARA, Mango, Stradivarius, Tommy Hilfiger, Gant, Guess, US Polo, the Grand Mall will serve as a meeting point for dining, entertainment, art, and sport for the residents; a marketplace with a supermarket offering gourmet products, attractive for residents, office workers and tourists at the close vicinity; a destination for ‘impulse shopping’ fun for tourists and relaxing alternative for daily needs.
Investor implements the most advanced engineering solutions that are tailored for operations of shopping and entertainment centre. These energy efficiency solutions will result in a reduction of energy consumption by around 35% relative to standard solutions.
The total cost of the project is EUR 20 Mill. Capital Locus secured EUR 7 Mill for Grand Mall from EBRD and Bank of Georgia within risk sharing facility framework.
As part of the partnership, besides the loan, the Grand Mall will additionally receive a grant from the EBRD’s FINTECC program, whose donors are the European Union and the Global Environment Facility, for energy-efficient installations and building materials.
Amiran Darchidze – the owner of Grand Mall, Batumi: “Capital Locus and its owner Avtandil Gogoli got involved in Grand Mall’s project from the early stage of its development as an investment advisor. His primary mandate was to optimally structure the financial part of the investment and secure debt financing. Moreover, he was involved in all financial matters of the project, including contracts with anchor tenants, the selection of suppliers, and the implementation of specific mechanisms for the mitigation of financial and project completion risks.
I am very happy working with Avto. On the one hand, he is backed with an extensive experience in finance and investments. On the other hand, he always puts himself in the shoes of the investor, treats the project as his own, and thus is in perfect alliance with the investor’s interests. His persistence and intensity of work in remarkable. He is very much result oriented and gets these results.”
Avtandil Gogoli – Owner of Capital Locus: “It is well known that the development of the shopping mall is a most complex type of real estate development compared to residential, office, and hotel projects. The presence of different types of key stakeholders in shopping malls creates this complexity.
Tenants are very important stakeholders in this business. For the long-term competitiveness and sustainability of the mall, it is critical to align the expectations of the tenants (especially the anchor tenants) and the investor. Therefore financial aspects of long-term cooperation with them have to be carefully weighted.
Besides selecting the right suppliers for various types of construction/development services one has to make sure that cooperation with these suppliers covers certain built-in financial mechanisms which strongly demotivate them from compromising on completion deadlines and quality of work.
Grand Mall is a green-field project. Project Financing requires a rather different approach relative to financing an operating company, especially if funding for the project has to be secured from institutional lenders. As important stakeholders, lenders also have their expectations and a need for a certain level of comfort for becoming financially exposed to the project.
And most importantly there is an investor. The interests of all stakeholders have to be structured in such a way that the project becomes commercially viable and sustainable in a long term for the investor.
Amiran Darchidze is a highly reputable entrepreneur and successful investor. Very from the beginning, I knew that working with Mr. Darchidze and securing funding for his new investment project was going to be an interesting endeavor.
I am happy that we aligned interests and the expectations of the investor and lenders, and secured debt financing for Grand Mall from EBRD and BoG within risk sharing facility framework. I am confident that by closing this deal a solid ground is laid down for a long-term and mutually beneficial partnership between Grand Mall and EBRD/BoG.”