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ANALYSIS: Kazakhstan real estate: The big Apple Town
(bne) - While work on numerous real estate developments in Almaty has stalled, Woolim is continuing with its debut Kazakhstan project – Apple Town.
By Clare Nuttall in Almaty (business new europe)
Apple Town has frequently been picked by industry insiders as one of the best thought-out new developments in Almaty. The $4bn multi-purpose project comprises not just apartments to house around 6,000 people, but infrastructure including shops, schools and a business zone.
Located in south Almaty near the Tian-Shan mountains and not far from the Zhalai Alatau golf course beloved of Kazakh President Nursultan Nazarbayev, Apple Town is clearly aimed at the upper end of the market. The show apartments at Woolim’s “Model House” in central Almaty are decorated in lavish style, complete with jacuzzis and crystal chandeliers. The smallest goes for around $500,000, but despite Kazakhstan’s depressed property market and people’s new wariness of putting money into unfinished projects, Woolim staff say many have already been pre-sold. No numbers were available, though.
Kim Jin Sil, general director of Woolim Kazakhstan, acknowledges that things have changed since the Apple Town’s foundation stone was laid in late 2006. “Of course, the property market is not at such a good stage and it’s very unstable,” Kim says. “We haven’t sold as many flats as we expected. But we are continuing with construction activity because we have finance from Korean institutional investors.”
On the plus side, he points out, “the advantage is that we can find good specialists which are now free in the market because many other projects stopped. And the materials become cheaper, which makes us happy. And the sales must be expected, maybe from spring when we expect the market will be at a better stage and demand will increase.”
First bite at the apple
The first stage of Apple Town will be built by 2011, with the entire project due to be completed by 2014. By that time, the Almaty Financial Centre will also be finished, which Kim considers is an important factor in the city’s development. “I think after the Almaty Financial District is finished there will be a good future for us in Almaty, because there will be lots of investments from outside,” Kim says. “That’s why we are still here. Some more projects in the construction sphere are in negotiations. I think that as the Kazakh population grows, the demand for such buildings as Apple Town will grow too.”
Part of the reason why Apple Town will take such a long time to complete is that Woolim is fitting out the apartments completely with all the materials imported from South Korea. As far as possible – given that Kazakhstan’s communications infrastructure is less developed than South Korea’s - the company has incorporated “intelligent home” features such as security screens in each room, an electronic entry system and the ability to turn on and off heat and lighting remotely.
He is particularly enthusiastic on the subject of under floor heating. “For health, the under-floor system is the best. When the cold season comes, people start feeling not so good, getting cold, getting ill. In such a situation, Koreans go home and lie on the warm floor with a warm blanket. The next morning they wake up feeling good. We are trying to introduce this system, and the special Korean culture to the Kazakh people.”
But apart from introducing some aspects of Korean culture, Woolim has some concrete, long-range designs on Kazakhstan.
Before launching Apple Town, the South Korean conglomerate conducted extensive research into the Kazakh market. “We researched in two sectors – the first was mining and the second was construction. Woolim pays much attention to mining because in Korea there are no natural resources,” explains Kim. “In Korea at the Woolim headquarters, there is a department which works on development of this sphere. So we were working on this segment, especially in Kazakhstan, which is very rich in natural resources.”
Overall, Kim is positive about Woolim’s future in Kazakhstan after Apple Town. “Regarding other projects, I think we will do some, but when the markets are in better conditions.”
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seems like Kazakhstan real estate has a real future someone needs to get the word out to the international real estate portals