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The Place for Business

How Tashkent’s commercial property market is developing

The new economic policy of Uzbekistan provided a push for development of the commercial property market. In the past two years, the volume of quality shopping space offers in Tashkent has more than doubled. However, in this regard the capital of the country still lags behind the metropolitan cities of neighboring Kazakhstan rather significantly, with nearly ten times fewer retail areas.

The number of modern shopping spaces in the capital with a population of over 2.5 million (according to unofficial data, 4 million – Editor’s note) does not satisfy existing demand. Coverage is about 35 square meters (377 square feet) per 1,000 citizens.

Development of high-quality retail in the republic, same as in Kazakhstan, is hindered by the population’s low living standard and affinity for the traditional shopping format, bazaars. But demand is slowly shifting towards shopping malls. Their growing popularity is helped by the nation growing younger and more urbanized: in the past few years, the number of city dwellers exceeded that of the countryside populace. And with residence registration canceled, urbanization only promises to pick up more.

“The commercial property market of Tashkent is developing rather rapidly compared to other large Uzbek cities. In the past three or five years, the number of brand and chain operators increased significantly. Total gross building area (GBA) of existing shopping malls in Tashkent is about 212,000 sq m (2.28 million sq ft). Total GBA of retail space in design and construction stages is around 353,914 sq m (3.80 million sq ft), which will allow for an increase in the shopping space pool by 167% of the current offer,” said Bayan Kuatova, managing partner at Colliers International Kazakhstan.

The journey has just begun

According to the expert, the retail property market in Tashkent is currently in the initial stage of its development. “In our opinion, existing shopping malls in Tashkent may face strong competition if the market sees large regional shopping malls emerge which offer better opportunities for potential tenants and visitors,” Bayan Kuatova noted. Fill rate for quality retail and shopping & entertainment properties is at a high level, about 83%.

Average rent rates for retail areas in shopping malls range from $10 to $100 per sq m; in popular malls, rent might exceed $100. “In the medium- to long-term, the retail property market in Tashkent will be developing towards more conceptual shopping malls. Old-format stores will suffer decreasing demand from tenants and visitors,” Colliers International experts observed.

Demand for offices

Likewise, the office property market in Tashkent is only beginning to form. Most office spaces were constructed recently and have been in use less than ten years. The volume of existing quality office space in the Uzbekistani capital is no more than 150,000 sq m (1.61 million sq ft).

According to Bayan Kuatova, today Tashkent’s office property market lacks business centers which meet international class-A standards. However, there are projects which significantly surpass standards for class-B buildings in their construction and management quality.

“Since there is no universal classification of office buildings in Tashkent and Uzbekistan, it’s common for the building’s owner or managing company to assign a particular class to its office property based on their own judgment. The majority of currently used office spaces do not fully meet requirements of the renting international companies; hence, new planned class-A office projects will have competitive advantages over existing office buildings,” claimed Bayan Kuatova.

According to Colliers International’s data, Tashkent’s office property market is currently exhibiting considerable growth. There is high demand for quality spaces and a lack of offers. As a result, the occupancy rate for class-B and class-B+ business centers is at 90% and 96%, respectively. These numbers could decrease for existing business centers as new, high-quality office buildings are put into operation. Experts predict an increase in demand for large-scale spaces in the two- to five-year term.

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Professionals at work

The largest commercial property operator in Tashkent is The Tower Mall Management Group, which is part of the Orient Group. The holding’s assets include shopping malls, retail spaces and business infrastructure in the capital. The Tower MMG has amassed experience in development and management of Uzbekistan’s shopping malls. The company has successfully launched such retail objects in Tashkent as Samarkand Darvoza, Compass and Eski Shahar, which today are the most popular and well-known malls in the city. For the next year, The Tower MMG has announced putting into operation the two largest objects in the republic.

The Central Asian Riviera

The Riviera shopping mall
GBA – 434,500 sq ft, total parking capacity – 500 car spaces

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The most awaited project of the year, the Riviera shopping and leisure center, was ready to launch as early as late spring. Due to the lockdown restrictions because of the coronavirus, its opening was postponed till August.

Besides more than 100 retail spaces, the mall’s three stories include an ice skating rink, a seven-screen cinema and a spacious summer terrace with an area of 1,300 sq m (about 14,000 sq ft). In 2019, during a presentation of The Tower MMG’s projects, French architect and author of the Riviera mall design Mario Bartilla noted that for him Riviera symbolizes excellent shopping and relaxation under a soft sea breeze.

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“I have learned a great deal about Uzbekistanis and I know they love to spend time outdoors in summer. That’s why the new Riviera complex is precisely like that, with a spacious summer terrace and the best shops,” claimed the architect.

The mall’s parking lot has around 500 car spaces. The GBA of the complex is 40,370 sq m (434,500 sq ft), the gross leasable area (GLA) is 20,150 sq m (217,000 sq ft). The shopping and leisure center at the junction of Nurafshon Prospect and Sebzor Avenue will present leading global brands with some making their debut in Uzbekistan, such as Gant, Calvin Klein, Liu Jo, Yamamay, Camicissima and Mayoral.

It’s expected that the Riviera shopping mall will be mainly visited by citizens from the adjacent area. Its population is over 306,000 people, 150,000 of whom live within walking distance.

Next stop: the DEPO MALL

DEPO MALL
GBA – 617,000 sq ft

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The opening of the DEPO shopping and leisure center by The Tower MMG, planned for spring 2021, promises to become one of the largest in the republic. The new mall will be located at the place of the former Chilanzar tram depot of Tashkent, on an area of 9.7 hectares (nearly 24 acres). The GBA is 57,363 sq m (617,000 sq ft) and the GLA is 33,895 sq m (nearly 365,000 sq ft). DEPO MALL’s concept was developed by the Turkish architectural company DOME+PARTNERS. 

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The design proposes an expanded street retail zone with more than 200 outlets of various modifications. Besides retail space, the DEPO MALL complex will include various entertainment facilities: the largest playground in Tashkent, the largest food court, a summer terrace and a seven-screen cinema. There will also be a large supermarket and a car service with an auto parts store and a gas station.

A plant’s new life

Multiuse shopping and leisure center
GBA – over 753,000 sq ft

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The Tower MMG plans to implement another large-scale project in the Yunusabad district of Tashkent. The former excavator plant’s territory will house the largest multipurpose complex, combining a retail park with housing of a new format. This concept will be realized jointly with the housing construction company Golden House. The project, developed by the Chapman Taylor international architecture studio, presumes construction of the largest shopping and leisure center with the GBA of over 70,000 sq m (753,000 sq ft) and the GLA of 50,000 sq m (538,000 sq ft). The retail park is going to be a multilevel space recreated with the help of terraces, bridges, stairs and an amphitheater. Besides shopping spaces, the mall will have a food court and restaurants for up to 1,000 people, a skate rink, a playground with an area of 2,500 sq m (27,000 sq ft), an art gallery, a fitness center and a parking lot with 1,000 spaces.

The multiuse shopping and leisure complex will be accompanied by “Business plus” and “Business comfort” class residential buildings with apartments of various modifications.

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According to the architects’ plans, the exterior of the complex will be designed in the combination of features that inspired the project, which is the Silk Road’s history, mountains, dunes, rivers and cotton fields.

At the capital’s heart

Orient Business Center
Class-A office building located in the very center of Tashkent

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One of the most important commercial property projects in Tashkent by The Tower MMG is the construction of the Orient Business Center. It’s a class-A office building, located at the very heart of the Uzbekistani capital. The GBA is 15,000 sq m (161,000 sq ft) and the GLA is 9,020 sq m (97,000 sq ft).

The building’s size and features are specified according to the city’s prospects. The data was acquired through an analysis of the office property market of Tashkent, done by experts from the American company Jones Lang LaSalle Inc. The way the complex is designed, a workplace in it can be organized in either the private office style or the open space style. The highly technological Orient Business Center promises to become one of the principal venues for large-scale business events. Conference halls in the building can fit up to 300 people. The complex itself, as is proper for such class-A commercial projects, will be “a city within a city” with complete infrastructure for office workers. The building will include a restaurant, a café, a cafeteria, a mini-market, a pharmacy, a bank, dry cleaning and other necessary facilities to save the employees’ time and money. The two-level underground parking is designed for 200 vehicles.

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