2026-07-07
Until now, real estate in the Armenian market has generally been perceived in two ways: either as property acquired for personal use or as an asset purchased for future sale or rental purposes. The new concept introduces a third approach — real estate as a professionally managed investment asset.
In this case, not only the property's location or purchase price is important, but also the management system, the operator's experience, operational efficiency, service quality, protection of owners' rights, and the asset's long-term competitiveness.
This category may include various formats, such as serviced apartments, branded residential complexes, investment properties located in resort areas, income-generating units within mixed-use developments, as well as apart-hotels. The latter is only one, yet a highly visible and high-potential format within this system.
The experience of real estate market development shows that rapidly growing markets eventually face the same question: how to move from the stage of construction and sales toward a more controlled, higher-quality, and long-term investment environment.
In the initial stage, the market's primary focus is attracting capital, launching new projects, and generating demand. However, as volumes increase, new requirements emerge, including investor protection, management quality, service standards, operator accountability, and the preservation of an asset's long-term value.
In this context, the concept of investment real estate in Armenia should be viewed not through the lens of praise or criticism, but from a professional analytical perspective. Its objective is to make this type of property a more recognizable, measurable, and manageable asset by establishing specific legal, technical, service, and management approaches. The concept highlights the need for regulatory frameworks, risk reduction mechanisms for investors, the establishment of standards, and requirements applicable to operators and managers.
International experience demonstrates that investment real estate markets generally evolve through two stages. The first is primarily focused on attracting investments and creating new projects. During the second stage, the market begins to demand greater transparency, higher management quality, and stronger investor protection mechanisms.
In the short term, such changes may require greater investment capacity and increase the administrative burden on market participants. In the long term, however, their objective is to improve market predictability and trust. In mature markets, investors evaluate not only the promise of returns but also the mechanisms through which those returns are generated and who is responsible for operating the asset.
One of the most prominent and comparable examples of investment real estate development in the region is Georgia, particularly Batumi. Over the past decade, the city has transformed into a major center of tourism and investment activity, where apart-hotels and apartments intended for short-term rentals became among the key drivers of the market. This growth was largely driven by tourism development. In 2019, Batumi welcomed approximately 2.1 million visitors, while by 2023 that number had reached 2.8 million, representing growth of roughly 33%.
Alongside growing tourism demand, the scale of the real estate market also expanded. According to TBC Capital, Batumi's residential real estate market reached nearly USD 900 million in 2024, remaining close to its 2023 level. The average price of newly built apartments increased by 14% during the same year, reaching approximately USD 1,141 per square meter.
Georgia's example demonstrates how investment real estate can become a driver of capital inflows, tourism development, and construction activity within a relatively short period. At the same time, rapid growth makes issues such as management quality, transparency of returns, and operator accountability increasingly visible. These are precisely the challenges that Armenia's new concept is attempting to address proactively.
Spain is one of Europe's most developed markets for investment and tourism-oriented real estate. While the primary drivers of the market in the 2000s were the growth of tourism and the activity of international buyers, the gradual institutionalization of the sector began in the 2010s.
After 2013, a significant portion of the regulation of tourist apartments and short-term rentals was transferred to the autonomous communities, after which registration, licensing, and oversight mechanisms were introduced across various regions. As of July 1, 2025, a national registration number requirement for short-term rentals also came into effect, aiming to improve the traceability and oversight of properties listed on rental platforms.
It is important to note that stricter regulation did not result in a mechanical slowdown of the market. According to Colliers, hotel investment volume in Spain reached EUR 4.275 billion in 2025, the second-highest level in the country’s history. In the apart-hotel segment, Spain continues to be one of Europe’s leaders, attracting approximately 23% of all European investment in this asset class in 2025. Particularly noteworthy is the growth of the apart-hotel segment—a format in which guests enjoy the comfort of a traditional apartment combined with hotel-style services. Since 2019, demand in this segment has grown by an average of 5.9% annually, whereas growth in the traditional hotel sector has been only about 1%, demonstrating that investor interest is steadily shifting toward more flexible and longer-term accommodation formats.
International experience shows that within a regulated environment, investment activity not only does not decline but can actually grow if the market offers demand, manageability, and predictable rules of the game. In other words, regulation itself is not an obstacle to sales when it is accompanied by a reliable institutional framework.
Armenia’s investment real estate market is still in its formative stage. This provides an opportunity to view the sector’s development not only through the lens of quantitative growth but also from the perspective of qualitative development, avoiding from the outset many of the challenges that Georgia and Spain encountered in later stages of market maturity.
The concept approved by the Order of the Minister of Economy of the Republic of Armenia identifies several key priorities, including the development of a regulatory framework for investment real estate, the creation of an investment-friendly environment, the attraction of foreign capital, and the enhancement of the sector’s competitiveness. The document also considers this direction as an investment segment capable of generating positive economic impact and contributing to the formation of diversified investment portfolios.
This approach has the potential to change the culture of the market. Whereas investment property has often been viewed through a simple “buy and rent” logic, the new approach shifts it into a more structured environment where property management, service standards, transparency in income calculations, and the protection of owners’ rights become increasingly important.
The new concept of investment real estate should be viewed not as an object of praise or criticism, but as a new stage in market development whose actual impact can only be assessed over time. In the short term, the new standards may create additional obligations for certain market participants and require them to operate under clearer and more structured rules. However, as demonstrated by both the Georgian and Spanish experiences, investment property markets achieve long-term stability precisely when periods of unrestricted growth are followed by standards, professional management, and a culture of accountability.
For Armenia, the principal value of this process may lie not only in the increase of new projects but also in the formation of a new perception of investment property—one in which investors evaluate not only price and location, but also the operator’s experience, the management model, service quality, and the asset’s long-term value. It is this transition that may enable investment real estate to become an additional driver of Armenia’s economic growth—not only in terms of scale, but also in terms of quality.
Data Sources: Neginski, TBC Capital / Orange Group, Realting.com, Holidu, Colliers, Iberian Property, Savills, Mineconomy.am.
Developed and supplemented by RED Invest Group.
