Transcript Стратегия и бизнес план компании Eurasia RED

Prospects for commercial real estate development
in Kazakhstan – office and shopping real estate
Dmitry A. Revin,
Director for finance and business development
Eurasia RED, www.eurasiared.com
Adam Smith conference – Construction and Real Estate in
Kazakhstan
April 1-3, 2008
Almaty, Kazakhstan
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WHAT’S AHEAD…?
DEMAND
SUPPLY
RATES
PROFITABILITY
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Executive summary
•
Kazakhstan is a rapidly developing market with strong GDP growth,
significant foreign investments and stable political environment that
presents exciting profitable opportunities for commercial real estate
development.
•
Astana - market will be mostly saturated for offices and shopping center
space by 2009. Unsatisfied demand for modern shopping center space
may arise in as early as 2010.
•
Almaty - there is unsatisfied demand for offices and modern shopping
center space.
•
Regions – offices and shopping real estate development projects present
marginal opportunity in selected regions.
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Analysis of Kazakhstan commercial real estate market
Sources for analysis of Kazakhstan commercial real estate market:
— JLL
— Knight Frank
— CBRE
— Cushman
— DTZ
— Deloitte
— EIU
— OECD
— Kazakhstan commercial real estate center
— Agency of RK for statistics
— Ministry of economy and budget planning of RK
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Kazakhstan is the biggest dynamically developing country in Caspian
region with attractive investment climate
1. Territory – 2,725 thousand sq.m.
2. Population – 15,514 thousand people
3. Yearly GDP growth – 9-11% a year
(2000-2007, same growth forecast for the
next 4 years)
4. Average retail turnover growth –
20% a year (2001-2007, same growth
forecast for the next 4 years)
5. Average salary increased 3,6 times
during 2000-2007
Source: Agency of RK for statistics
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Kazakhstan commercial real estate market passed through emerging
market stage and is currently still in the stage of dynamic growth
Stage I. Emerging stage
Examples
Kazakhstan regions
«Kendala»
Almaty, 2005
Stage II. Growth stage
Regions of RF Almaty, Astana
«Astana Tower» BC at Gagarina str,
Astana, 2005
Almaty 2006
Stage III. Maturity stage
Moscow
«АFC»
Almaty, 2008
Shopping
centers
Business
centers
Time
• Office real estate is comprised
• Construction of new business
of facilities in old administrative
centers of А, В+ and B class
buildings of Soviet period (i.e.
• Share of old buildings in office
Scientific Research Centers)
real estate is significant
• Modern business centers are not
constructed, just reconstruction
of Soviet period buildings
• Shopping real estate is
comprised of old stores and
soviet supermarkets,
markets/bazars, stand alone
shops, booths.
• Construction of shopping
centers, in particular due to
network retailer presence
• Share of Soviet period
commercial buildings is still
high
* MFC – multifunctional complex (offices, shopping center, hotels, etc)
• Mainly construction of А+ and А
class business centers
• MFC * with offices of premium
class
• Segmentation of shopping space
by types (trade center, shopping
mall, neighborhood store, etc.)
• Construction of malls with GLA>
20,000 sq.m. outside of the city
• Insignificant share of
markets/bazars in trade turnover
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Analysis of Kazakhstan commercial real estate market
•
Overview of Kazakhstan commercial real estate market
•
Business center real estate market
•
Shopping center real estate market
With dynamic growth of GDP per capita, office real estate area in
Almaty and Astana should significantly expand as well
Office real estate availability per 1,000 city inhabitants,
sq.m.
Office real estate availability per 1,000 inhabitants in world cities
and its correlation with GDP per capita
3500
2
R = 0,8847
Paris
Toronto
2800
Sidney
2100
Almaty (2012)
Madrid
Prague
Astana (2012)
Warsaw
1400
Bratislava
Budapest
700
Moscow
Sofia
0
5000
Istanbul
10000
Almaty(2006)
15000
Astana (2006)
20000
25000
30000
35000
40000
GDP per capita at purchasing parity index, USD
Source: OECD, JLL (Cities’ reports), Swiss Realty Group, Istanbul Metropolitan Municipality, CBRE, Knight Frank
45000
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Analysis of Kazakhstan commercial real estate market
•
Overview of Kazakhstan commercial real estate market
•
Business center real estate market
• Almaty
• Astana
•
Shopping center real estate market
Based on Almaty city population forecast and existing office real
estate, it is expected that 1,5 mln. sq.m. of office space should be
constructed to satisfy new demand by 2012
New demand growth forecast
Thousand sq.m. for office real estate in Almaty
Almaty city population forecast
Thousand city inhabitants
1000
1500
1300
1287
1301
1316
1330
1345
1360
1375
750
X
500
980
1100
646
250
900
0
2006 2007 2008 2009 2010 2011 2012
Office space per 1,000 Almaty inhabitants
based on GDP forecast
Sq.m. / 1,000 city inhabitants
2400
2090
1393
1600
122
185
2007
2008
280
2009
•
275
2011
2012
Based on forecasted population of Almaty city,
it’s expected that there will be on average 2
sq.m. per citizen by 2012.
928
183
2010
Comments
618
800
426
412
0
2006 2007 2008 2009 2010 2011 2012
Source: Agency of RK for statistics, Kazakhstan commercial real estate center, Deloitte estimate
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Economic forecast for office space demand shows that Almaty
market is still far from saturation point
Economic forecast of new demand and
planned supply of office real estate
in Almaty, thousand sq.m.
1200
980
Economic forecast for
new demand
900
646
Potential new supply
taking into account
AFC
600
426
340
300
280
224
122
185
100
55
0
2007
2008
240
160
83
2009
97
2010
Planned supply of
office space taking
into account declared
plans on AFC
2011
2012
According to the plans declared by the market players and business center
projects under development as of the end of 2007.
1
Source: Deloitte forecast
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Comments
• Declared volume of office space supply
by market players lags behind
economic forecast for new demand. In
2010 deficit could reach 300 - 500
thousand sq.m.
• Taking into account completion of first
phase of AFC in 2007, insignificant
market oversupply is expected that
may stabilize prices in 2008.
• Nevertheless, soon additional demand
will create deficit and rent prices will
further increase, unless market players
will manage to supply additional office
space.
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Analysis of Kazakhstan commercial real estate market
•
Overview of Kazakhstan commercial real estate market
•
Business center real estate market
• Almaty
• Astana
•
Shopping center real estate market
According to economic forecast, new demand for quality office
real estate in Astana will increase eightfold from 2007 till 20012
Astana city population forecast
New demand growth forecast
for
office real estate in Astana
Thousand sq.m.
Thousand city inhabitants
1000
500
800
600
574
602
632
663
696
730
400
766
X
300
200
416
275
100
400
2006 2007 2008 2009 2010 2011 2012
Office space per 1,000 Astana inhabitants
based on GDP forecast
Sq.m. / 1000 inhabitants
1800
1600
1109
1200
755
600
177
255
369
532
0
2006 2007 2008 2009 2010 2011 2012
0
52
79
2007
2008
120
2009
182
2010
2011
2012
Comments
• According to the forecast, Astana office
real estate could reach 1,2 million sq.m.
by 2012.
• In the near future demand for Astana
office space is unlikely to grow fast
because Astana is still an administrative
and political center rather than business
center of Kazakhstan.
Sources: Agency of RK for statistics, Kazakhstan commercial real estate center, Deloitte estimate
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15
According to economic forecast, Astana office supply will considerably
exceed demand in the next 2 years
Economic forecast of new demand
and planned supply of office real estate
in Astana, thousand sq.m.
450
423
Planned supply of
new BC¹ space
300
277
266
227
162
150
181
Comments
• In the next 3 years massive
completion of development
projects and supply of office real
estate is expected in Astana
market. Taking into account
business center projects under
development and declared
plans, more than 600 thousand
sq.m. of office space might be
constructed till 2009.
Economic forecast for
new demand
119
78
51
0
2007
1
2008
2009
2010
2011
2012
Based on market player plans and BC projects under development as of the end of 2007.
Source: Deloitte forecast
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Analysis of Kazakhstan commercial real estate market
•
Overview of Kazakhstan commercial real estate market
•
Business center real estate market
•
Shopping center real estate market
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Analysis of major foreign city development shows that there is a
strong correlation between city GDP and shopping space availability
Taking into account GDP forecast, shopping space availability may reach 650
sq.m. in Almaty and 530 sq.m. in Astana per 1,000 city inhabitants in 2011.
Shopping real estate availability per 1,000 city
inhabitants, sq.m.
Shopping real estate availability per 1,000 inhabitants in world cities
and its correlation with GDP per capita
1200
Paris
2
R = 0,8415
1000
London
800
650 sq.m. per 1,000 city inhabitants
600
Warsaw
530 sq.m. per 1,000 city inhabitants
Berlin
400
Almaty 2011
Madrid
Budapest
Astana 2011
Prague
Bratislava
Almaty 2006
200
Moscow
Astana 2006
Kiev
0
0
10
20
30
40
GDP per capita, thousand USD
Source: Kazakhstan commercial real estate center, Agency of RK for statistics, EIU, OECD, Deloitte estimate
50
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Analysis of Kazakhstan commercial real estate market
•
Overview of Kazakhstan commercial real estate market
•
Business center real estate market
•
Shopping center real estate market
• Almaty
• Astana
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Experts forecast that Almaty retail market turnover will increase
threefold from 2006 to 2012
Retail trade through trade enterprises* grows annually and may reach 56% by 2012
Markets, IE
80%
24%
16,1
6
2,8
2003
3,8
4,3
5,4
70%
64%
58%
44%
47%
48%
56%
53%
52%
20%
56%
44%
0%
2012
2007
2006
2005
2004
0
2004
2,3
2002
3
42%
60%
40%
6,5
36%
2003
9
30%
2007
Kazakhstan
The same period 20%
2006
100%
2002
12
20%
2005
15
Trade Enterprises
2012
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Retail trade turnover through
different sale channels
Retail trade turnover in Almaty,
billion USD
Almaty is the largest trade center of Kazakhstan with about 40% of total retail trade
turnover of RK in 2006.
* Trade enterprises – include all kinds of modern trade formats – neighborhood stores, supermarkets, hypermarkets, except for
open markets (bazaars) and small retail outlets (stalls, stands) of individual enterprisers
Source: Agency of RK for statistics, EIU
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Economic forecast for 2 scenarios of Almaty shopping space demand
– using official and unofficial statistics on city inhabitants
Scenario 1. Official
statistics on Almaty city
inhabitants
Scenario 2. Unofficial
statistics on Almaty city
inhabitants
Almaty city inhabitants growth forecast
Thousand city inhabitants
1900
1736
1500
1575
Thousand sq.m.
1200
2010
1823
Economic forecast of demand for
shopping space in Almaty
1914
1316
1330
1345
1360
1375
0
2006 2007 2008 2009 2010 2011 2012
Shopping space per 1,000 Almaty
inhabitants based on GDP forecast
650
600
200
0
160
133
206
183
865
272
252
345
474
650
2006 2007 2008 2009 2010 2011 2012
Source: Agency of RK for statistics, Deloitte estimate
268
68
200
200
91
268
162
859
121
358
217
479
642
Scenario 2
Thousand sq.m.
2000
1770
865
1000
600
500
0
1247
37%
1500
2
477
360
200
X
890
800
479
358
283
Demand
for new
shopping
space
2006 2007 2008 2009 2010 2011 2012
Sq.m. / 1000 Almaty city inhabitants
1000
600
300
900
400
859
642
1
1301
1142
32%
900
1653
1400
1287
Scenario 1
200
200
288
88
200
416
127
288
416
382
265
184
600
523
1 247
865
2006 2007 2008 2009 2010 2011 2012
Demand
for new
shopping
space
Almaty economic forecast shows that future demand for
shopping space in 2008-2009 may exceed supply by 1.5 times
Economic forecast for new demand
and planned supply of shopping real estate in
400
Almaty, thousand sq.m.
Economic forecast for new
demand for Scenario 2
300
265
Deficit ~1.5 times
127
100
88
68
Economic forecast for
new demand for
Scenario 1
162
121
91
217
210
184
200
382
Taking into account
construction of 140
sq.m. MEGA center
(IKEA)
100
80
55
Developer plans for construction of
shopping centers
0
2007
2008
2009
Source: Company data, Deloitte estimate
2010
2011
21
Comments
• In the next 4 years Almaty
developers plan to construct about
300 thousand sq.m. of shopping
space (based on the projects
announced by developers).
• Taking into account current plans
of developers up to 2010, potential
deficit of shopping space in
Almaty will potentially reach
about 220 thousand sq.m.
• It should be noted that in 2007
IKEA announced its plans for
development of 2 MEGA
centers in Kazakhstan – one in
Almaty and another one in Astana
with area of 260-380 thousand
sq.m.
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Analysis of Kazakhstan commercial real estate market
•
Overview of Kazakhstan commercial real estate market
•
Business center real estate market
•
Shopping center real estate market
• Almaty
• Astana
23
According to expert estimates annual growth of Astana retail
market turnover will comprise 25% in the next 6 years
Retail turnovers will be more and more through trade enterprises and share of
open markets (bazaars) may decrease up to 10-15% in 2012.
Retail turnover through various
sale channels
Retail turnover in Astana,
billion USD
Markets, IE
Kazakhstan
for the same period - 20%
100%
25%
80%
2,2
49%
53%
59%
62%
60%
3,16
31%
1,1
40%
51%
47%
41%
38%
34%
13%
2007
2006
2005
2004
2003
2002
2012П
2007П
0%
2006
2005
2004
2003
0,50 0,58
0,28 0,37
20%
0,83 1,03
66%
87%
60%
2002
0,0
40%
2012
3,3
Trade enterprises
Comments:
• Retail turnover growth in Astana is the highest in RK.
• Total retail turnover in Almaty and Astana comprise about 50% of total retail turnover of the
Republic of Kazakhstan.
Source: Agency of RK for statistics, Ministry of Economy and Budget Planning of RK, EIU
Demand for new shopping space in Astana may be higher than in
Almaty due to higher population growth in Astana
Scenario 1. Official data on
Astana city inhabitants
Scenario 2. Unofficial data
on Astana city inhabitants
Economic forecast of demand for
shopping space in Astana
Astana city population forecast
Thousand sq.m.
600
Thousand inhabitants
1500
1127
1000
500
700
574
770
602
847
632
932
663
1239
400
730
Scenario 1
215
200
0
0
2006 2007 2008 2009 2010 2011 2012
414
298
1
766
575
39%
1025
696
24
111
80
31
80
155
43
111
155
116
84
60
215
161
Demand
for new
shopping
space
414
298
2006 2007 2008 2009 2010 2011 2012
X
Shopping space per 1,000 Astana
inhabitants based on GDP forecast
Thousand sq.m.
900
Sq.m. / 1,000 inhabitants
800
427
323
130
114
184
155
700
244
211
287
390
530
2006 2007 2008 2009 2010 2011 2012
597
50%
600
530
400
0
894
721
600
200
Scenario 2
2
400
267
300
120
0
80
40
80
179
59
120
179
198
132
88
267
297
597
400
2006 2007 2008 2009 2010 2011 2012
Sources: Agency of RK for statistics, Kazakhstan commercial real estate center, Deloitte estimate
Demand
for new
shopping
space
Economic forecast for shopping space demand and supply shows
their balance in 2008. However, shopping space deficit may be
expected as early as 2009.
Economic forecast for new shopping space
demand and supply planned by developers in
Astana, thousand sq.m.
200
Supply and
demand
stabilization
period
Shopping space
deficit growth
period
198
Economic forecast for new
demand under Scenario 2
150
132
100
50
Supply planned by
developers
60
40
31
59
50
43
116
2008
Source: Deloitte estimate
•
Total shopping space planned for
completion by developers in Astana during
2007-2009 is around 150-170 thousand
sq.m.
•
Few large shopping complexes were
launched in 2007-2008.
•
Total shopping space completed in Astana
may exceed economic forecast for demand
in 2008.
•
Given growing competition among
shopping complexes, in 2008 rent may get
stabilized and grow insignificantly (close to
inflation level and difference of KZT to USD
rate).
84
Economic forecast for new •
60 demand under Scenario 1
0
2007
Coments
88
30
2009
2010
2011
25
Nevertheless, given potential demand for
shopping space as Astana inhibitant
income grows in 2009-2011 and absence
of major plans by developers for
construction of major shopping complexes
(except for potentially Mega by IKEA), we
expect that in 2010 there might be deficit
of quality shopping space and rent may
grow significantly.
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Is Kazakhstan commercial real estate market competitve in terms of
investment yield with other major CIS markets?
Investment yield
2006
Change YoY,
bpts
2007
Russia
Office
9.5%
8.5%
-100
Retail
11.0%
9.25%
-175
Warehouse
11.0%
9.75%
-125
Ukraine
Office
11.0%
9.5%
-150
Retail
13.0%
11.0%
-200
Warehouse
14.0%
12.0%
-200
Source: Cushman & Wakefield Stiles & Riabokobylko, JLL, DTZ, Colliers, Renaissance Capital estimates
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What about profitability? By 2012 profitability of office real estate in
Almaty and Astana may decrease to current profitability in Moscow
Investment yield for office real estate investments
25%
20%
Almaty
Moscow
18%
Аstana
5 years
15%
12,5%
18,0%
14,0%
12%
10%
11%
Western Europe
6%
5%
18%
14,5%
Eastern Europe
13%
10%
24,0%
7%
3 years
9%
6,5%
5,5%
5%
6%
4,9%
9%
5,5%
14,0%
10,0%
7,0%
7,8%
6,6%
4,8%
10,0%
5,5%
Minimal office real estate profitability ~ 4,5-5%
0%
2001
2002
2003
2004
2005
2006
2008F
2010F
2012F
Comments
• Current office real estate profitability in Astana is close to profitability level in Moscow 5 years ago.
• Office real estate profitability in Moscow in its turn is 3 years behind profitability in Eastern Europe, which has
profitability very similar to profitability of Western Europe “mature” market.
• Analysis of worldwide profitability dynamics shows that for growing stage markets profitability is decreasing at
approximately 2% a year, due to increase in new office space construction and decrease in the level of risk for
investors. Having reached the level of 7% a year, profitability decrease slows down to 0.5-1% a year and reaches
4,5-5% a year (current profitability in Western European countries).
• We forecast decrease of office real estate investment profitability in Kazakhstan by 2% a year till 2010, with slow
down to 1.5% a year after that.
Source: JLL, CBRE, MC «Accord Asset Management», Deloitte estimate
BRIGHT FUTURE FOR SELECTED MARKETS
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DEMAND
SUPPLY
RATES
PROFITABILITY