S’pore property firms make their mark

KAZAKHSTAN might not be very high up on the list of places for Singaporean property companies to venture into, but some home-grown players in the real estate field - including Jurong International, Surbana Corporation, and CapitaLand and its subsidiary The Ascott Group - have made their mark on the country’s landscape.

‘As the ninth-largest country in the world and ranking 11th with the largest proven reserves of both oil and gas, Kazakhstan certainly cannot be ignored,’ said a spokesperson for Jurong International.

‘Kazakhstan has strong oil and natural resource industries,’ said Tony Soh, deputy chief executive of Ascott Hospitality, Ascott’s hospitality management arm. ‘We remain optimistic on the long term potential of the serviced residence industry in Kazakhstan.’

Jurong International was active in Kazakhstan from 2004-2006, providing consultancy services for an IT Park and the National Centre for Biotechnology in Astana, the capital of Kazakhstan. Right now, the company has no projects on the ground in the country, but is open to doing more work there, it said.

The feather in Jurong International’s cap when it comes to Kazakhstan is the National Centre for Biotechnology in Astana, a world-class research facility. The centre aims to serve as a catalyst for the nation’s foray into the competitive biotechnology industry.

Designed over three phases, the 28,000 sq m centre will house laboratories, offices, R&D facilities, a vivarium, a greenhouse, a conference centre, accommodation and other amenities to promote research and innovation.

Another Singaporean consultancy group, Surbana Corporation, has also done consultancy work in Kazakhstan. And CapitaLand, Singapore’s biggest property developer, last year announced that it was venturing into Kazakhstan as well.

In April 2007, CapitaLand said that it has entered into a Memorandum of Understanding with Eurasia Logistics Limited, a major Russian logistics property developer, to build 16 logistics properties comprising up to a total of five million sq m of space across the key cities of Kazakhstan, Russia and Ukraine.

CapitaLand chief executive Liew Mun Leong said then that the deal was part of his group’s strategy to seek opportunities in fast-growing, oil-rich countries which include Kazakhstan.

CapitaLand’s serviced residence unit Ascott has also secured management contracts for two prime serviced residences in Kazakhstan - one in Astana and the other in Aktau, a city in the oil-rich western region by the Caspian Sea. The contracts were awarded by Tsesna Corporation, a well-established conglomerate in Kazakhstan.

The 200-unit Ascott Astana and the 120-unit Citadines Aktau, which will both be built by Tsesna Corporation, are targeted to open in the second half of 2010.

Doing business in Kazakhstan does not come without its challenges, companies say. Kazakhstan is reputed to be quite tough on its business negotiation stance.

‘Hence for our contract negotiations, we have been extremely careful,’ said the Jurong International spokesperson. ‘But the positive side to this is that the authorities honour their agreements and fulfil their obligations, and because they are very committed to globalisation, they are fast learners and should be making some headway soon. The Kazaks are also warm-natured and hospitable and expect you to down vodkas by the glasses!’

Source : Business Times - 16 Dec 2008