The demand for commercial real estate in Kazakhstan is projected to rise

The demand for commercial real estate in Kazakhstan is projected to rise in sectors such as shopping and entertainment malls, offices, and warehouses. Such conclusions were presented by experts of the Administration of the Astana International Financial Centre (AIFC) in the analytical overview of commercial real estate and prospects of the REIT market in Kazakhstan.

Commercial real estate is one of the most attractive sectors for investment. According to the Bureau of National Statistics, investments in fixed capital in operations with real estate in Kazakhstan showed stable growth over the past decade, reaching $7.1 billion (KZT3.2 trillion) in 2023, a 4.1-fold increase compared to 2015 in KZT terms.

According to Statista, the real estate market in Kazakhstan was $0.89 trillion (KZT406.1 trillion) in 2023. The real estate market is forecast to reach a value of $0.98 trillion (KZT450.8 trillion) in 2024, and with a CAGR of 6.7% until 2028, expected to reach $1.27 trillion (KZT584.2 trillion).

In 2023, Kazakhstan’s real estate market to GDP ratio was 3.44, compared to 4.15 for the US, 3.69 for Canada, and 7.43 for China.

Office spaces

The office real estate market in Almaty and Astana has undergone significant changes over the last few years due to a variety of factors that have impacted the volume of supply and rental rates. In 2023, Kazakhstan commissioned 595,590 m2 of office space, valued at KZT135 bn ($296 million) with Astana and Almaty leading the way, demonstrating ongoing growth in both area and cost trends.

Shopping and entertainment malls

In 2023, Kazakhstan experienced a peak in the commissioning of shopping and entertainment malls over the past nine years, both in terms of area and cost. A total of 28 malls, covering 174,001 m2 were commissioned, representing almost 60% growth compared to 2022. Almaty accounted for the majority of commissioned malls in terms of area over the last five years, with 105,562 m2 in 2023.

Warehouses

The warehouse real estate market in Kazakhstan faces a shortage of Class A and Class B spaces amid increasing demand. The total area of commissioned wholesale and non-wholesale warehouses and transport and logistics centres reached its peak in 2022 and stood at 256,010 m2. In terms of investments, the facilities commissioned in 2023 had the highest total cost – KZT46.5 bn ($102 million). Although the transport and logistics centres were relatively small in terms of area, they accounted for 30% of cost in 2023.

The AIFC’s role in real estate

The AIFC plays an important role in promoting investment in Kazakhstan’s real estate sector and enhancing its investment frameworks, thereby stimulating growth, and attracting international investors to the dynamic REIT market. The AIFC also allows the establishment of a Real Estate Investment Trust (REIT), an entity that owns and manages income-generating real estate. As of August 2024, 37 companies operating in the real estate sector and four REITs are registered at the AIFC.

You can explore the overview further by accessing it through this link.

Reference:

The Astana International Financial Centre (AIFC) is an independent jurisdiction with a favourable legal and regulatory environment and a developed infrastructure for starting and doing business, attracting investment, creating jobs and developing Kazakhstan’s economy. www.aifc.kz

AIFC Media Relations

Ainur Issabayeva

Press secretary

Phone: +7 701 777 6558

E-mail: [email protected]