Overview of the office market of Astana, Almaty and Shymkent cities

2019-07-01

The office fund of Astana city is currently about 801 sq.m per 1,000 people of high-quality office real estate of A and B classes (Figure 1). In 2019, the office space index is expected to increase to 944 sq.m per 1,000 people, and offices of “A” class will have one-third of the total office space in Astana city. For comparison, in Moscow, where the main business activity of the Russian Federation is formed, there are about 1,400 sq.m per 1,000 people, and over 2,000 sq.m. in such cities of Eastern Europe as Warsaw and Prague (Figure 2).

 

Figure 1. Dynamics of office real estate market in Astana city for 2015-2019
 
It is expected that in 2019 the office market will increase by 140 thousand sq.m with the commissioning of such business centers as Abu Dhabi Plaza, Aura 2 and Azure. It should be emphasized that the above-mentioned business centers belong to the class A, B +. With the introduction of these three business centers to the market, the share of  “A” class business centers will increase from 20% to 32% in Astana city.
 
Figure 2. Provision of high-quality office space for 1,000 people in cities around the world
 
We predict that the Astana office market in the next 5 years will be able to absorb over 400,000 sq.m of A and B class office space. On the other hand, despite the fact that the Almaty office market is more mature than the Astana market, we expect that the Almaty market will be able to absorb another 250,000 sq.m over the next 5 years.
 
Figure 3. Dynamics of the office real estate market in Almaty for 2015-2019. 
 
Shymkent is another attractive location in the country after the city was declared a city of national importance in 2018. It should be emphasized that the office market in Shymkent is still at an early stage of development. The quality and range of services currently offered in the office market of Shymkent city require updating and improvement. In general, the investments inflow, rapid growth of the number of economically active enterprises, as well as the double-digit growth of GDP of the city will contribute for it to become a very attractive region for the development of office real estate.
 
At the moment, the office market of Shymkent city mainly consists of  “C” class offices with a total volume of 33,400 sq.m. Of the 20 business centers, only a few belong to the category B and B +. This indicates the initial stage of development of the office real estate market and its potential for growth.