Press Releases

KALA CAPITAL BUYS LAND TO DEVELOP MASTER-PLANNED COMMUNITY IN GEORGIA'S CAPITAL

Tbilisi, Georgia - February 14, 2008 -- Kala Capital announced today that its subsidiary Arsenal Development has acquired 78 hectares of land once used as a Soviet military camp from the Government of Georgia. The plot - the largest tract of land available for real estate development in the city's capital - will be transformed into a master-planned, mixed-use community at a cost that is expected to be about $1.5 billion USD.

The planned "city within a city," called Arsenal City, will feature high-end residential, retail and commercial space, including 60,000 square meters of space for government offices, five-star hotel and convention facilities, schools, a state-of-the-art hospital, along with cultural and entertainment facilities.

The project is expected to create 25,000 new jobs in Georgia and increase the country's GDP by one percent.

"Arsenal City is extremely important to Georgia and its long-term prosperity," said Zurab Nogaideli, Chairman of Kala Capital. "Arsenal will become a prestigious destination that draws visitors from throughout the country and the world. The construction of the community will be a major economic generator and the numerous companies and enterprises that will locate in Arsenal will employ thousands of people."

Nogaideli has appointed Kahka Damenia, Georgia's former Vice Minister of Economy, as Chief Executive Officer of Arsenal Development.

Mr. Damenia, "The time is right for a project of this size and scope in Georgia and I am proud to be a part of what will become a testament to our country's progress."

For the past two centuries, Arsenal served as a military camp for the Russian Army. It was given over to the Ministry of Defense of Georgia after Georgia regained independence from the Soviet Union in the early 1990s.

Set high above Tbilisi, the property features sweeping views, is adjacent to the capital's historical section and nearby the Presidential palace and the city's largest cathedral.