In an interview with Business Georgia, Shota Gujabidze discusses economic research and ranking methods, the importance of real estate in evaluating the assets of businesses and other economic entities, and real estate valuation practices in Georgia. Particular attention is given to a multi-criteria approach to valuation and to the technical, economic, urban, and social factors that affect real estate value. More details you can read in "Business Georgia" magazine at page 56: https://businessgeorgia.ge/downloads/TheIssueMagazine.pdf
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Generally speaking, the gradation method is very important in ascertaining the real situation and dynamics in a market. However, we have to take into the consideration the fact that the chance of taking part in a statistical research is only 1/5 (20%). Therefore, if a solid economic indicator is needed, it is more convenient to use the detailed mathematical research method, in order to reduce the number of possible fallacies.
When referring to the so-called ‘ranking’, it is extremely difficult to establish the general criteria, which fit all the objects of a gradation research, as it comprises not only businesses and people, but also such physically non-existed assets as: business ideas, internet products, professionalism and intellectual properties. Though, if we choose businesses and rich people, or activities of limited and holding companies and other giant organizations, industries or enterprises as the major research objectives, in my view, one of the most significant factors in their evaluation will be real estate records reflected in their assets and proper management.
As for the criteria of real property estimation, Georgian realty and brokerage firms do not utilize the so-called URAR (Uniform Residential Appraisal Report), i.e. an integrated approach of real estate estimation, which includes several criteria and excludes bugs in evaluation. Such evaluation system comprises everything from the elementary technical conditions of building to everything that can have impact on prices: a neighborhood, an exploitation date of building (in Georgia, attention isn’t paid to this factor, as exploitation dates of more than 60% of buildings are expired), an object location, an urban development level, a development speed of surrounding territory, a tendency for price fall and rise in surrounding vicinity, a balance for supply chain at the surrounding territory, a payment form, a noise and activity level, a management system of sewerage and household remnants, a foundation type of building and its sustainability, a roofing type, exterior decoration materials, a social status of neighborhood, an energy efficiency of building, a fire-resistant system, innovative technical services (heating and ventilation automatic systems, remote control household and electronic facilities) and other factors.