Residential complex on the first coastline in Kobuleti

Information

Project for the construction of a residential complex by the sea in Georgia (Buknari)

1. General information about the project

This investment memorandum has been prepared to provide potential investors with structured information about the project for the construction of a residential complex in the resort area of Buknari, Adjara, Georgia.

The project is being implemented in a development format with subsequent sale of residential apartments. This document is informational and intended for preliminary assessment of the investment feasibility of the project.

2. Project description

Project type: construction of a residential complex

Number of floors: 12 floors

Format: residential apartments

Key feature: 100% of apartments with a direct sea view

Distance from the sea: ~200 meters

The project is aimed at private buyers and investors, including foreign citizens. The rental model within the project is not considered.

3. Location

Buknari, Adjara, Georgia (between Batumi and Kobuleti)

The location is characterized by active development of resort infrastructure, limited supply of land by the sea, and stable demand for housing with a sea view. Price growth in Batumi creates additional demand in nearby settlements.

4. Land plot

Area of the plot: 1,216 m²

Current status: agricultural designation

Planned status: non-agricultural designation (for construction)

Maximum sellable residential area: 8,512 m²

Owner of the plot: an individual, owner of the construction company — developer of the project.

No encumbrances, pledges, or easements on the land plot.

After fulfilling the conditions of the first stage of financing, the land plot will be re-registered in the investor's ownership (100%).

5. Developer and builder

The project is being implemented by an existing construction company with over 11 years of market experience.

Company experience:

9 completed and commissioned facilities

full construction cycle with in-house resources

The builder and general contractor are the same company.

6. Permitting documentation

The following stages are planned for project implementation:

development of the architectural project;

conversion of the land plot to non-agricultural designation;

obtaining a construction permit;

registration of permitting documentation.

Timeframe for procedures: 3–4 months

Total cost: 380,000 USD (including design, state fees, and support).

7. Investment structure

Investor participation form — investment agreement.

At the initial stage, it is planned to attract one investor.

Financing stages:

Stage 1 — Preparatory (0–4 months):

financing of design and permitting;

investment volume: 380,000 USD.

Stage 2 — Construction (5–24 months):

financing of construction works;

financing is carried out according to the approved budget.

Project horizon: 24–30 months.

8. Project control and management

All investment funds pass through escrow accounts;

use of funds is limited to the approved budget;

technical supervision is carried out by an independent party;

the developer makes operational decisions within the approved budget;

personal guarantees of the developer are discussed individually during negotiations.

9. Sales concept

Sales of apartments begin after the completion of the building shell, provided that the project is fully financed.

Sales price:

average price — 1,500 USD / m²;

the price is conservatively set and corresponds to the lower boundary of the market range.

Sales are carried out with the involvement of real estate agencies and direct sales.

10. Financial model of the project

10.1 Revenues

Sellable residential area: 8,512 m²

Average sales price: 1,500 USD / m²

Projected revenue: 12,768,000 USD

10.2 Expenses (basic)

Design and permits: 380,000 USD

Construction (approximately): 4,681,600 USD

Marketing: 200,000 USD

Agency commissions (5%): max 638,400 USD

Taxes (18%): 2,298,240 USD

Basic costs: 8,198,240 USD

10.3 Contingency reserve

10% of basic costs: 819,824 USD

10.4 Total project budget

Total investments: 9,018,064 USD

11. Financial result

Revenue: 12,768,000 USD

Total costs: 9,018,064 USD

Net profit of the project: 3,749,936 USD

12. Profit distribution

Investor: 80% of net profit

Developer: 20% of net profit

Net profit of the investor: 2,999,949 USD

Return on investment is made in a combined manner — as sales occur and upon project completion.

In case of unsold apartments, the project timeline is extended until completion of sales.

13. Investment indicators

Implementation period: 24–30 months

Investor ROI: ~33%

Investor IRR: 22–24% per annum

Calculations are made taking into account taxes, agency commissions, and contingency reserve.

14. Project risks and management measures

Main risks:

delay in permitting procedures;

increase in construction costs;

slowdown in sales pace.

Risk management mechanisms:

10% reserve in the budget;

phased financing;

control through escrow accounts;

pledge in the form of land and apartments;

developer's experience.

15. Conclusion

The project represents a structured developer investment in the coastal zone of Adjara with a transparent management model, ensuring investor interests and a conservative financial model.

The project is aimed at private investors focused on capital preservation and obtaining stable returns in the medium term.

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