Country guide: Kazakhstan

Kazakhstan's build and interiors industry is steadily growing, making it an excellent market to enter. The country has benefited from a number of policies that have boosted the construction sector and increased its value over the last few years.

This has been helped by the fact that the nation has put a lot of effort into attracting international investors, which has caused more activity from foreign firms entering this market. Overseas companies funding projects in Kazakhstan are treated as if they are nationals, giving them access to more rights and guarantees than they would get in other countries.

This has increased investment in the nation's build and interiors industry, allowing it to grow. Here are the facts you will need to get involved with Kazakhstan's vibrant construction sector:

 

Key statistics

 - Population: 17,948,816 (2014).

 - Annual population growth rate: 1.17 per cent (2014).

 - Percentage of population of a working age: 51.3 per cent (2012).

 - GDP per capita: $24,100 (2014 estimate).

 - Total GDP: $420.6 billion (2014 estimate).

 - Estimated GDP growth: 4.3 per cent (2014).

 - Unemployment: 5.1 per cent (2014 estimate).

 - Ease of doing business: 77th in the world, above most countries in the surrounding area including China, Iran, Kyrgyzstan and Uzbekistan.

 - Ease of registering property: 14th in the world.

 - 2014 World Competitiveness Yearbook ranking: 32nd.

 - 2014 World Talent ranking: 32nd.

 - DHL Global Connectedness Index 2014 ranking: 61st.

 - Government: republic.

 - Interest rate: 5.5 per cent (2013).

 - Foreign Direct Investment (FDI) into Kazakhstan: $23.89 billion (2014)

 - Since 2005, Kazakhstan has attracted gross FDI of over $208 billion.

 - Of this, $58.47 billion came from the Netherlands, $21.01 billion from the US, $13.11 from Switzerland, $12.74 billion from China and $11.25 billion from France.

 - Starting a business in Kazakhstan takes an average of 10 days, compared to the world average of 30.6 days.

 

Construction facts

 - Gross value added by construction: $12.77 billion per year (2012).

 - Construction spending in 2014: $14.27 billion.

 - Construction spending growth: 4.1 per cent (2014).

 - Investments in housebuilding in 2014: $3.30 billion.

 - FDI into construction in 2013: $1.03 billion.

 - Total floor area of construction projects begun in 2012: 6.74 million sq m.

 - Buildings completed in 2014: 29,516.

 - Building cost for high-rise buildings: $589 per sq m.

 - Building cost for low-rise buildings: $319 per sq m.

 - Paint consumption: 7.5 kg per head (2011).

 - Total coatings consumption predicted to grow to almost 180,000 tonnes in 2014.

 

Major projects

1. Talan Towers

Kazakhstan's capital of Astana is to soon see the completion of a major development that will include the country's first structure built to eco-friendly Leadership in Energy and Environmental Design (LEED) standards. The Talan Towers are being built by Verny Capital using energy-saving technologies to reduce the impact on the environment.

The development is made up of two towers. One will be 26 storeys tall and house the Ritz-Carlton Astana hotel, while the other will consist of 30 storeys and be used as a Class A international office center. These towers will be joined by a three-storey podium, which itself will house a luxury fashion gallery.

In total, this project measures 120,000 sq m and is expected to cost around $300 million. Construction of the project began in June 2013, and it is set to open in 2016.
 

2. Abu Dhabi Plaza

One of the largest construction projects ongoing in Kazakhstan is the Abu Dhabi Plaza, a mixed-use development with a total area of over 500,000 sq m. Among its many buildings will be a retail podium, around 550 residential apartments, international grade office space, 190 hotel rooms and several leisure facilities.

However, the crowning glory of the project is its main skyscraper, a 75-storey construction that will be 320 m tall once completed. Overall, the project has a cost of $1.6 billion, which has been funded largely by international investors - mostly from the United Arab Emirates (UAE) - as well as the Abu Dhabi government.

 

3. Expo Village

The Expo Village project is a $560 million scheme in Astana that is being designed by architecture firm AHR. On a 200,000 sq m site, AHR has planning permission for the construction of 15 buildings, including an administrative and business centre, a school, residential areas, parks, and social facilities.

The buildings have a secondary use, as they have been specially designed so that they act as a shield against the cold winds that blow in from the wetlands surrounding Astana. To protect pedestrians from the country's harsh weather, the project's public spaces will be linked by sheltered biodomes.

Two of the project's 15 buildings have been designed to achieve a LEED Silver sustainability certification, while a third is expected to achieve the Gold rating. Construction is set to begin this spring, and the scheme will be completed in 2017.
 

4. EXPO 2017 exhibition complex

Astana has been selected to host the international exposition EXPO 2017, and as a result is constructing a huge complex over an area of 1.74 million sq m. This will involve the building of 26 facilities, including residential complexes, a school, a kindergarten, a hotel, a meeting hall, a conference and press centre, an expo office, an Energy Hall, commercial and retail areas, an indoor city, an expo plaza and an art centre.

Part of this complex will be pavilions for the exposition itself, including the National Pavilion of Kazakhstan. This will be 80 m in diameter and 100 m tall, and shaped like a sphere. Kanat Mukashev, director of the Architecture Department of Astana EXPO 2017, described it as "a unique spherical architectural spectacle that symbolises EXPO 2017”.

 

Business culture

Kazakhstan's culture and etiquette have been formed from both Kazakh and Russian traditions, as well as remnants from when the nation was part of the Soviet Union. This, combined with the country's inherent multiculturalism (over 100 ethnic groups reside in Kazakhstan) has given it a unique business culture.

When greeting a Kazakhstani, it is polite to shake hands gently, often using both hands to do so. Continue to do this even if meeting the same person several times in a day. You should wait to be introduced to people, and use their title (e.g. Mr or Dr) and last name rather than their first name until you are asked to do otherwise.

Whenever meeting somebody in Kazakhstan, it is important to ask them a few personal questions before moving on to matters of business. It is considered rude if you do not ask about your contact, their family, their health and similar pieces of small talk. After two or three of such questions, you can safely talk about business.

You will often find that Kazakh businesspeople are eager to help and reluctant to say no to anything. This can be difficult, as discussions or requests that are likely to end negatively are often postponed and delayed in the hope that they will be resolved by others.

Business cards are an extremely important way of establishing authority and your place in the business hierarchy, so make sure to carry enough. Ensure they include your title, and it is advisable to have one side of them printed in Russian, which is a widely spoken business language in Kazakhstan.

 

International investment

Investors from a wide range of countries have funded projects in Kazakhstan recently. The nation is proactive in seeking out treaties and agreements with other countries that will benefit its private sector and allow major construction schemes to go ahead.

This can be seen in the above example of the Abu Dhabi Plaza, funded in part by investors from both the private sector and government of the UAE. A lot of Kazakhstan's investment comes from the Middle East, and the nation is set to host a Kazakh-Saudi business forum on May 19th 2015 to attract investment from Saudi Arabia.

Foreign investors are also allocated a large amount of legal protection in Kazakhstan, earning the nation a ranking of 25th in the World Bank and International Finance Corporation's 'Doing Business' survey in 2015. Foreign investors are counted as nationals, giving them the same rights as Kazakh companies.

A law from 2003 also grants international investors certain guarantees. They will receive statutory protection for investments made within the Republic of Kazakhstan, as well as guarantees for use of income and investors’ rights during nationalisation or requisition. Openness in state activity concerning investors is also guaranteed.

 

Interior design trends 2015

Kazakh interior design in 2015 can best be described as 'traditional meets modern'. In many ways, the nation's interiors are very minimalistic in a manner that is seen in contemporary homes and offices around the world. However, there are also plenty of traditional themes shining through.

For example, it is fashionable in Kazakhstan to have wood flooring throughout the home. However, this is often decorated with large, elaborate rugs featuring traditional Kazakh patterns. Similarly, chairs and sofas are often decorated either with neutral tones or traditional patterns.

Wood panelling is also being used more often on Kazakh walls. This is usually accented with windows, often covered with elaborate curtains or other decorative features.
Earthy colours are very popular in Kazakhstan, with walls often being painted in neutral beiges and browns, occasionally utilising oranges or deep pinks. These are typically decorated with more traditional patterns in the form of canvases or curtains. These are often floral, but not brightly coloured.

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