SERIK TULBASSOV Chairman of the Board TS Engineering Group

n Kazakhstan, petrodollars flow eastward from Atyrau into the construction sector, but domestic capital markets are unable to absorb the large influx of money from oil and gas. In their absence, people have resorted to real estate as an investment tool. The returns on a high-end condo in Almaty can be substantially higher than interest earned at the bank; however, that also means only 40 percent of apartments in major cities are lit at night.

“As a stable region in Central Asia, many well-to-do people from neighboring states put their money into real estate here,” says Serik Tulbassov, Chairman of the Board of Directors at TS Engineering Group. For Mr. Tulbassov, who oversees the building of office towers and shopping malls, the trend is a mixed bag. Real estate investments by banks so far underlie the sector’s annual growth rate of 20 percent, but an easing of oil prices could change that. To avoid problems, Mr. Tulbassov thinks Kazakhstan should take the long-term view and diversify its manufacturing base. Developers find it cheaper to import construction materials from China than to buy from local suppliers, he argues. This stunts the growth of local SMEs. “A domestic sales market is often the key development driver,” says Mr. Tulbassov.

TS Engineering Group is only five years old, but it is already a big player in project finance and one of the largest engineering and investment companies in Kazakhstan and Central Asia. Aelita is its first venture into the luxury residential segment. Located in Almaty, its design is earthquake-resistant and meets environmental standards. Mr. Tulbassov’s team offers the full range of engineering services from stress calculations to quality certification. The construction itself is left to outside contractors. In Atyrau, the oil and gas capital, TS Engineering Group has overseen the construction of the Atyrau Plaza Business Center, a high-rise office building. Other projects include the 9-floor Ken Dala business complex in Almaty and the Crystal Air gated community in the foothills of the Tian-Shien range.

TS Engineering Group uses classical architectural and modern engineering-technological designs.

“My ambition has always been to implement interesting and useful projects,” says Mr. Tulbassov. In his day-to-day, he often draws on the expertise of foreign professionals working as consultants for TS Engineering Group. Their inputs have broadened his ambitions. Outside developers not only bring know-how and technology, but also fresh capital. In the 1990s, Turkish contractors helped build Astana, the new capital. Today the shortage of qualified professionals is acute. “More than capital, what we need are professional trainers. We are sending our people on training programs, but we still actively import experts from overseas.” says Mr. Tulbassov.

Privatization in Kazakhstan created a wide spectrum of owners, and timely reforms meant the transition was less traumatic than in other post-Soviet countries. Now, companies like TS Engineering Group see opportunities in the Russian market. Mr. Tulbassov is instituting international accounting standards and hopes that entry into the WTO will usher in more transparency. “There are already Kazakh banks in Russia and many of our partners operate there. This will make it easier for us to take our first steps in Russia.”