1. SCOT HOLLAND | CBRE
Atyrau Market View
Residential
www.cbre.kz Q2 2012
OVERVIEW
Quick Stats Atyrau City is the capital of the Atyrau Because of the fact that Atyrau is considered
Change Province of the Republic of Kazakhstan. One primarily a city where you ‘go to work’, the
from demand for purchasing residential property is
geographical peculiarity of the city is that one
Q1 Q2
part of it is situated on the right bank of the almost completely internal, and sales
12 11
Ural River on the European continent, whilst transactions take place almost exclusively
Prices between local individuals and registered
the other part is located in Asia.
Absorption companies (legal entities).
Atyrau, known as the ‘oil capital’ of
In contrast, the residential rental market is
Kazakhstan has 263,871 inhabitants
dominated mostly by specialised foreign-owned
(according to officially published data as of and foreign-managed companies.
Hot Topics 1st January 2012).
In terms of quality, the market is represented by
• During the period Jan-June The province accounts for about 23.9% of the office buildings and hotels. In comparison,
2012 the total investment in total fixed capital investment in Kazakhstan, residential developments are significantly more
with KZT 486,031 Mln. invested during the in number, but of poorer overall quality.
residential construction in
period Jan - June 2012. The largest part of Under the current economic conditions,
Atyrau amounted to KZT
this amount was contributed by foreign mortgage lending has become practically the
15.1 Bn; investors. only opportunity for people to purchase an
• The total amount of residential apartment or other housing unit.
The combined industrial output of Atyrau
space commissioned in Atyrau Province during the period Jan-June 2012 It should be noted that several second-tier
banks have entered the mortgage lending
Province during the 1st half of amounted to KZT 2,134,366 Mln, which
market with their mortgage programs since the
2012 comprised 228 280 represents a 0.8% decrease compared to the
beginning of the year, however mortgage
sqm, representing a 36.1% same period of 2011.
lending remains an expensive and relatively
increase compared to the At the same time, during Jan-June 2012 the unaffordable instrument for the population. The
same period of 2011; total investments in residential construction average interest rates are 13-14% per annum,
reached KZT 15.1 Bn, which represents an and the required down payment is 30-40%
• Insufficient supply of good approximate increase of 49.5% compared to (depending on the condition of the housing
quality residential space to the same period of the previous year. unit). The credit period varies from 10 to 30
meet the lease and purchase The total amount of residential space
years. When choosing a mortgage credit, in
demand; the first place most potential borrowers
commissioned in Atyrau Province in the period
consider the interest rate level.
• Some decrease of residential Jan-June 2012 comprised 228,280 sqm.
The appearance of affordable housing on the
rental rate levels. It should be noted that the index of physically market is likely to contribute to the housing
commissioned residential space also improvements for the people with low and
increased on a year-on-year basis and middle levels of income, i.e. the largest portion
comprised 136.1%. of the population.
Investments into Residential Commissioning of Residential
Construction, Atyrau Province, KZT Mln Space ('000sqm)
30,000
10,000
23,137
23,670 1,000
25,000 21,949
19,820
20,000 23,865 17,136 100
20,940
10
15,000
1
10,000
2007 2008 2009 2010 2011 Jan-
5,000
Feb
0 Atyrau Province Kazakhstan 2012
2005 2006 2007 2008 2009 2010 2011
Source: Kazakhstan Statistics Agency Source: Kazakhstan Statistics Agency
©2012, Scot Holland | CBRE

2. Atyrau Market View Residential
The volumes and rates of construction of residential The average selling price ranges on the Primary and
developments, community facilities and infrastructure projects Secondary residential markets of Atyrau have not
decreased in late 2009 – 2010, due to the economic demonstrated any significant changes during Q2 2012,
conditions. The global financial crisis had a significant as shown in the table below:
negative effect on the activity of major construction
Selling Price Range,
companies, which had started large residential projects but
USD per sqm
failed to complete them.
Primary market 1,200 - 2,300
The construction of the ‘Nursaya’ and ‘Korkem’ micro-districts Secondary market 550 - 950
is in process under the State Program. The buildings in Source: Scot Holland CBRE
‘Korkem’ micro-district are designated for budget employees
A comparison of apartment sizes in existing projects and
and socially disadvantaged categories of the population,
while the buildings in Nursaya micro-district are designated developments under construction shows a trend towards
for use under the mortgage program and lease housing decreasing the average apartment areas.
scheme. Furthermore, the commissioning of the ‘Samal We would like to point out that this trend can be
Atyrau’ residential development is planned for the second observed not only in Kazakhstan, but also in many other
half of 2012. countries around the world.
In addition, municipal housing is currently under construction In our opinion, this tendency is a sign of orientation
under the state program along Zharbusynov Str., Utemisov towards a more mass-market, and should be taken into
Str. and Erniyazov. Str. The construction of these consideration by local residential developers.
developments started in March 2011, and the commissioning
is planned for the first half of 2012. The total number of Average Apartment sizes related to the number
apartments is 162 with a total area of 9,096.8 sqm. of rooms (sqm)
Under
Despite the difficulties in regional economy, Atyrau Completed
Construction
residential market observes a relative increase of the 1 room 61 45
residential demand. The reasons behind growing demand 2 rooms 92 81
include active incoming migration, leading to the rapid 3 rooms 111 102
increase of Atyrau population. 4 rooms 156 135
As mentioned earlier, according to official statistics the 5+ rooms 228 -
population of Atyrau city as of December 2011 comprised Source: Scot Holland CBRE
263,347 people. However, it is reasonable to presume that
the actual population of Atyrau is significantly larger due to Apartment sizes depending in relation
the inflow of workers from other cities and regions of to the number of rooms (sqm)
Kazakhstan, foreign specialists and inexpensive labour force 250
from other CIS countries.
200
During Q2 2012 no new residential projects have been
commissioned in Atyrau by local private developers. New 150
residential space was commissioned only in the developments 100
completed under the State Housing Program.
50
In general, the residential market of Atyrau shows slow
activity, which is predominantly caused by the limited supply 0
of new developments under construction. In particular, the
om
om
om
om
om
om
om
om
market witnesses a visible shortage of sales offers. Also, the
ro
ro
ro
ro
ro
ro
ro
ro
amount of foreign visitors dropped during Q2 2012, which
1
2
3
4
1
2
3
4
lead to a decrease of demand for renting residential space Existing projects Projects under construction
and subsequently lowered rental rates. For example, at the
beginning of the year the range of rental rates of 2-room Source: Scot Holland CBRE
apartments on the primary market was in the range However, it should be noted that this tendency is
USD 1,500 – USD 2,500, whereas currently the rental generally not applicable to Elite-class residential projects
quotations vary from USD 1,000 to USD1,500. with apartments rented by expatriates in the oil & gas
It should be noted that we have observed a very limited sector, who usually come to Atyrau accompanied by their
families and therefore seek more expensive and larger-
Q2 2012
number of residential sale/purchase transactions during the
reported quarter. The average sales price of apartments in sized housing units.
newly-commissioned buildings comprised approximately
USD 1,400 - 1,500 per sqm.
Page2
©2012, Scot Holland | CBRE

3. SCOT HOLLAND | CBRE
Atyrau Market View
Offices
www.cbre.kz Q2 2012
OVERVIEW
Quick Stats The population of Atyrau is growing thanks to At the beginning of 2009, the total existing
Change a number of young professionals relocating office stock in Atyrau was approximately
from
Q1 Q2
there to take advantage of the highest salaries 250,000 sqm.
12 11 in the country, as well as the benefits offered
Given the annual addition of approximately
Rental rates by oil companies. For example, the average
20,000 sqm in 2009, the total volume of
monthly nominal salary in Atyrau in May
Occupancy office space in Atyrau as of the beginning of
2012 amounted to KZT 173,365, which is
2010 reached the level of 270,000 sqm
more than 2 times higher than the average for
and remained unchanged during the
the Republic of Kazakhstan.
reported period.
Hot Topics Capital investments during the period January-
During Q2 2012 no new office
• The selling prices and rental June 2012 comprised KZT 162,317 Mln.
developments were constructed or
Foreign investment still represents the
rates on the Atyrau Office commissioned in Atyrau.
dominant share of the total volume of capital
market show no significant
investment in Atyrau. Due to the effects of the financial and
changes in comparison with economic crisis, property developers in
These factors affect the development of the
the previous period; Atyrau are facing problems with delayed
general city infrastructure (whether residential
• The existing Office supply is and hospitality, educational and medical, or completion of new developments.
mainly represented by a mix of community facilities), along with increasing In addition, the Atyrau region is well known
lower-class and smaller-size the existing office stock. for the strong presence of foreign-owned
class В and С office buildings, Historically, the development of the office companies, which do not have the right to
typical for most regional cities segment in Atyrau has been closely linked purchase & own property in Kazakhstan
in Kazakhstan; with the rapid growth and expansion of according to the existing country legislation.
companies in the oil & gas sector. In fact, most local companies are simply
• Office sales/purchase
Because of this, there were practically no branches of ‘parent companies’
transactions are rare, Class A office developments prior to 2001. headquartered in Astana and Almaty,
represented mostly by local However, the situation started changing with looking to rent offices rather than purchase
companies buying premises on the completion of the TCO headquarters, and property in the region.
ground floors of residential the subsequent tender by AgipKCO for a
The Atyrau office market is predominantly
buildings, or in business build-to-suit office building.
represented by Class B office space, as
centres with strata ownership; From that point on, the office market started illustrated in the pie-chart below. At the
• One of the basic growing together with the rapid expansion of same time, the share of Class A business
oil production activities, and went from centres is expected to increase with the
characteristics of the Office
shortage of office space before 2001 to commissioning of projects in the pipeline (as
property market of Atyrau is the
oversupply after 2002. shown below):
limited supply of office space
of good quality and meeting
international standards. Existing Class A and B Office Class A and B Offices Under
Ratio Construction
Class A
offices
32%
Class A
Offices
43%
Class B
Offices
Class B 57%
offices
68%
Source: Scot Holland | CBRE Source: Scot Holland | CBRE
©2012, Scot Holland | CBRE

4. It should be noted that Office space demand, particularly for Office sizes may vary significantly from 25-30 sqm to more than
Atyrau Market View Offices
Class A and B premises, is directly linked to contracts with 8,000 sqm depending on the specific company size and number
large oil companies. These contracts are often pending, of employees.
terminated, renegotiated, frozen, etc. Basically, there are 3 types of companies occupying Class A
Sales of offices are not as active in Atyrau as they may be in office premises in Atyrau:
Almaty for example. It is mostly local firms purchasing 1. International oil & gas companies. They are major, long-term
office space either on the ground floors of residential occupiers, and very often for them it makes more sense to own
buildings, or in business centres with strata ownership. their offices, rather than rent;
The analysis of the selling prices of office developments in 2. Service and project management companies (oil & gas
Atyrau during the period January-June 2012 shows that they sector), construction/engineering/design companies, ‘Big 4’
are in the range USD 1,800 - 2,000 per sqm, depending consulting firms, international accountancy and law firms.
on the location, year of construction and condition of the They usually lease a few hundred square meters. For these
building. This leads us to the observation that the average types of companies, visitor flow is not as important as
selling price remained quite stable during the 2nd Quarter of interaction between each other, with the HQs, and with their
2012 without any significant tendencies towards price field offices. A large well-located business centre with good
decreases or increases on the office market. communications would provide higher value to such tenants,
However, considering the fact that no office premises are and would help achieve economies of scale.
currently offered for sale in Atyrau, we would regard these 3. Banks – most of them have retail banking, so direct access at
selling prices more as a market indicator, rather than as street level to their premises is essential. They can either buy
actual transaction prices. or lease premises, both in business centres and residential
Owners of business centres of large and medium size buildings.
predominantly prefer to lease office premises to different Tenants in the second group of companies are usually content
companies for a long term. Rental rates are also dependant with Class B office space, but would be willing to consider
on location, infrastructure, and amenities available and may upgrading under acceptable lease conditions.
vary widely from USD15 to USD50 per sqm per month.
Some hotels convert at least part of their hotel room allocation to
The list of such services/amenities may include (without office space. The reverse option –a mixed-use development
limitation) security, wet cleaning, additional communication providing hotel rooms and serviced apartments in addition to
lines, and quite often – office furniture in accordance with office space - is also becoming popular.
the individual tenant’s request.
The office segment of the Atyrau real estate market appears to
The difference between the average rental rates in Class А be somewhat less affected by the current economic conditions,
and Class В offices is in the range 20 – 25%. compared to the office markets in other major Kazakhstan cities
There have been no significant changes on the lease market like Astana and Almaty. As a result, existing business centres
during the reported period. Most major companies own & manage to keep relatively stable prices and rental rates, which
occupy their own office premises (for example, in turn leads to the preservation of the tenant mix and ensures
‘Schlumberger’, ‘Halliburton’ and ‘Baker Hughes’), while high and stable occupancy rates of around 90 - 95%.
smaller companies tend to lease space in large business Even when companies move their office premises from one
centres such as ‘Premier Atyrau’, ‘Atyrau Plaza’, ‘Fronter building to another, most often such relocations are not directly
Plaza’ etc. associated with prices or rental rate factors.
We have not observed any major changes of selling prices One of the major current characteristics of the office market is
on the Atyrau office market during Q2 2012 compared to deficient supply, leading to high occupancy levels of existing
the previous reported period. business centres. Despite the fact that construction of office
At the same time, the average range of office rental rates on buildings in several districts of the city is currently in progress,
the local market is USD 25-28 per sqm per month. the final completion dates of these projects are still not
determined and confirmed.
Atyrau Office Rental Rates Atyrau Office Occupancy Rate
40 100
95
35
90
USD per sqm
30 85
80
25 75
70
20
Q2 2012
65
15 60
2004 2005 2006 2007 2008 2009 2010 2011 Q2 2004 2005 2006 2007 2008 2009 2010 2011 Q2
2012 2012
Source: Scot Holland | CBRE Source: Scot Holland | CBRE
Page 4
©2012, Scot Holland | CBRE

5. Map of Atyrau Market Zones
Atyrau Market View
For more information
regarding the Market View,
please contact:
Scot Holland | CBRE
Strategic Consulting
Eugene Dolbilin
Vice President
Scot Holland | CBRE
105, Dostyk Ave.,
3rd floor
Almaty, 050051
Kazakhstan
T: +7 (727) 258 1760
F: +7 (727) 258 1768
eugene.dolbilin@cbre.kz
Source: Google | Scot Holland CBRE Peter Goranov
Senior Manager
• Avangard – comprises the North-West part of Atyrau; mostly residential properties (medium quality); Strategic Consulting and
few newly-built multifamily houses; intensive construction of individual developments in the northern Valuations
part of the district (‘Nursaya’, Nursaya-2 micro-districts) and construction of ‘economy’ class
Scot Holland | CBRE
multifamily houses (Zhety-Kazyna); basic retail properties, baked goods plant, social support facilities,
105, Dostyk Ave.,
and some office buildings – in green on the map.
3rd floor
• Privokzalniy – comprises the North-East part of Atyrau; predominantly old panel-type multifamily Almaty, 050051
residential properties and individual houses; newly-built economy class developments (Almagul Kazakhstan
microdistrict); also some warehousing premises and industrial bases; wholesale commerce at ‘Dina’ T: +7 (727) 258 1760
open market – in brown on the map. F: +7 (727) 258 1768
• Balykshi– comprises South part of Atyrau; multifamily residential buildings and individual houses; peter.goranov@cbre.kz
warehousing facilities and industrial bases, fish cannery; basic retail with no contemporary office
developments – in yellow on the map.
• Central (Europe) – comprises Central Western part of Atyrau; multifamily residential buildings of
‘business class’, prestigious developments, contemporary office and retail properties; few individual
developments (the ‘Old City’); plus some projects in progress – in pink on the map.
• Central (Asia) – comprises Central Eastern part of Atyrau; prestigious multifamily residential
properties plus some individual housing; contemporary office and retail premises; warehousing and
industrial bases, Atyrau oil refinery, chemical plant – in blue on the map.
DISCLAIMER 2012 Scot Holland | CBRE
The information herein has been obtained from sources believed reliable. While we do not doubt its accuracy, we have
not verified it and make no guarantee, warranty or representation about it. It is your responsibility to independently
confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example only
Q2 2012
and do not represent the current or future performance of the market. This information is designed exclusively for use by
Scot Holland | CBRE clients, and cannot be reproduced without prior written permission of Scot Holland | CBRE.
Page 5
©2012, Scot Holland | CBRE