20 Oct 2017 - Turkmenistan (Ashgabat)

Jasen Leith

I am in Ashgabat in Turkmenistan looking at the office real estate market. Arriving at a very impressive modern airport I clear immigration and head to my hotel. As I am driven through the tree lined motorway boulevards of the city on the sunniest day possible, I am struck by the sheer scale of the architecture, the numerous roundabouts with their impressive monuments and cascading waterfalls, each one out doing the one before, and most striking of all every building is marble white. It is a statement of arrival at the gates of the ‘White City ‘’which in this sunlight is blinding. Pausing for breath I thought I had seen all the magnificence this city had to offer and then I pass the Presidential palace, larger, grander than anything I have seen so far. The palace with it sheer size, numerous burnished gold roof tops and pristine condition just takes your breath away.

The city has undergone massive urban development with numerous tall buildings in all directions but these are in fact predominately apartments, rather than commercial premises. The old city is still in existence, with its 2-storey 19th century properties, Turkish and Russian markets still breathing life, however this historic enclave whilst a pleasant reminder of former times, today it is in sharp contrast to a surrounding bold new city that is rapidly replacing it.

The new city with its numerous parks, national music hall, museums and ministry buildings does not easily guide you to a city centre location but the uncompromising Olympic City, created to host 2017 Asian Indoor and Martial Arts Games, is as good a public reference point as any.

There is no obvious CBD, however, there are a number of office buildings dotted throughout the city and its ring road. On the surface, the office market is dominated by impressive large buildings, but these are all state-owned premises and solely for the numerous government ministries and banks. The office stock available for rent is less impressive with most offering an average quality space. Typically, international occupiers are renting individual rooms, with some committing to renting 100 sqm – 300 sqm. Very few companies are renting larger than 500 sqm.

More recently though the completion of the Berkarar shopping centre complex and business centre attached to it, has attracted significant interest and occupation from international companies. This development arguably provides the best modern office accommodation in the city, but even here companies have taken 200 sqm – 300 sqm suites and only on 12-month lease with a 30-day notice provision. There are very few longer length leases in the market place since commercial enterprises are viewing the economy and its potential with some caution.
With such short-term leasing being the norm and enterprises making annual decisions to be in the country or not it is very unlikely that private developers will bring new developments to the market in the short to medium term and the resulting effect is that, what office space is available is able to command good rental levels for city locations.

Rents for the best quality properties within limits of the city ring road are USD 30 psqm /month. Average quality office space is still commanding rents of between USD 25-28 psqm /month. In the old part of the city rents are USD 10-15 psqm/month but the space is typically very low quality, small and quite often in basement accommodation. Office locations outside of the ring road are fewer in number and typically in between older residential areas and as space typically below average in quality. Here office rents are between USD 12-18 psqm/month.



Berkarar Shopping centre