The coronavirus pandemic has significantly affected the statistics of Kazakhstan citizens leaving the country. In an interview with Inbusiness.kz Togzhan Sakharbekova, the founder and CEO of WT Group, confirmed this fact. Togzhan and her team have been helping our fellow countrymen to purchase real estate in the most developed countries for many years. They help not only to become property owners, but also to gain full citizenship status of countries such as the United Kingdom, the United States, or the United Arab Emirates. In this interview, we will discuss how much this pleasure costs and what are the main reasons why Kazakh people are leaving their homeland.
Togzhan, I want to start the conversation by asking about the demand for your services. Today, there is a lot of talk about people leaving Kazakhstan en masse. Is this true? If you compare today's statistics with those of previous years, how much has the number of those wanting to leave Kazakhstan increased, especially in the context of the pandemic?
Unfortunately, the pandemic has highlighted all the global issues existing in the country. Many citizens have taken off their rose-tinted glasses and began to think about moving away. Most often people move in search of earning opportunities, and this is mainly the younger generation. So there is a so-called brain drain. At present, the topic of immigration is being discussed everywhere. Kazakhs are a unique nation for foreign companies. We are self-restraint in behaviour, hard-working and organized. And our young people are talented and learn quickly. As such, witnessing this statistics is sad. There has also been an increase in the demand for the services of our company. Mostly from our extensive portfolio of services, we provide assistance in obtaining a residence permit. The main flow of requests is from families with children who are planning to go to universities. Taking into account the developed institute of family in Kazakhstan, parents want to invest their earnings correctly, wanting their children to live away from home in comfort and coziness. This is usually the motivation for obtaining a residence permit abroad. It gives such advantages as free movement around the world, including the possibility of flying to their children more often, without worrying about applying for and obtaining a visa. Also, a residence permit provides your child with a huge bonus - studying in the top universities of the world with the same price as those of the countries where the universities are located, which is two times cheaper than the prices for foreign students. In the future, children can easily build a career in developed countries, without worrying about the annual renewal of their student status.
Having the prospect of owning real estate abroad as a profitable investment surely also plays a big role. Right?
Of course. As I said, people are mostly driven by the desire to take care of their family’s future. Therefore, it is important for our clients to be under social protection and feel as comfortable as possible. As health care and education are priorities for our citizens, I can certainly say that the best way to do this is to have a residence permit/visa with property investments. Undoubtedly, Kazakh citizens invest in real estate abroad for assets – this is a common practice around the world. Having achieved certain results in their country and addressed basic needs, people want to diversify their portfolios and invest in property for additional passive income. Since 2014, we have been providing real estate selection services, including in the UAE. I myself lived in the Emirates for eight years, I know the market well and, as a resident of this country, I could use all the privileges equal to citizens of the UAE, the same medical or banking services. Also, being an investor and having experience buying real estate abroad, I started this business. I was approached by friends and acquaintances who wanted to purchase a house on the Persian Gulf and have the opportunity to rest with family at any time of the year.
Let's talk about your business in more detail. What specific services do you provide? How many years have you been in the market? How did you form your customer database, how in demand were your offers?
Since 2018 we have expanded our portfolio of countries. We added the United Kingdom, the United States, Turkey and countries of Europe. These are the most popular countries that our citizens invest in, both as a second home and for investment purposes. Clients are different. Some consider moving to another country for later life. Others invest in a low-cost property to rent out and later on sell it off as an investment with profit. The customer database developed organically as I assisted many people from Kazakhstan to buy real estate in the UAE. Then relatives, friends and colleagues of the customers started to come to us. As the lack of knowledge of the market and laws of other countries concerned them and made suspicions. It was more comfortable for them to work with one who knows the market and can choose the right project with a high return on investment and minimize all risks and the mistakes that may occur when buying a property independently. I can share a real case from my practice. Once a friend of mine approached me to buy an apartment in the UAE. The woman wanted an apartment for her children who in a couple of years would finish school and consider university admission in Dubai. The purchase of property was also interesting to them from the point of receiving passive income. The location and direct access to the sea were the main factors for the client. Our team proposed an installment plan to avoid freezing of working capital as well as any obstacles of taking the money out of the country. When buying property in Dubai one has to pay 4% land tax of the appartment value. However, thanks to our company being an official representative of the developers on the territory of Kazakhstan, we managed to get a special offer and save a good sum of money for the customer. In the end, the client was pleased with the sea-view appartment, unexpected funds, and the university being only five minutes away from home.
You have already named the most popular destinations among people from Kazakhstan. How do you explain the popularity of particular countries?
Yes, countries such as the UAE, Turkey, and Britain are in high demand. The Arab Emirates undoubtedly attracts with its service and a desire to amaze the world with new projects. In 45 years of Dubai's existence, it has become not only a tourist destination but also a financial center thanks to investments. Kazakhs, in turn, not only get real estate by the sea, but also an opportunity to scale their business projects and take them to new markets, meeting new partners. In this regard, Dubai very successfully attracts investors. Turkey is interesting for its culture and similarity of mentalities. As a result, potential investors are interested in having real estate both in the dynamic Istanbul and in tourist places. Within 30 minutes in Turkey, you can find a place by the sea and enjoy the cleanest beaches, organic food, sea water and sunshine. Great Britain attracts investors from all over the world with its establishment as the UK market is one of the most secure on the planet. Having real estate in London is not only prestigious but also profitable as an asset. Despite the fact that residential real estate is quite expensive, there is never a problem with its reselling. In England, a steady growth in the value of real estate up to 8% a year is observed, which means it can always be profitably sold in five or six years.
Togzhan, how much do your services cost? Can you give an estimate of how much it would cost to move to another country, including purchasing real estate, obtaining citizenship or a residence visa? In other words, how much money one needs to have to be able to move abroad?
Our company does not charge for its services as we are the official representatives of the largest global developers. We get a comission from closing a deal. Due to the pandemic, prices on the global market have fallen. We observed a decrease in prices by 2-3% in the UK, 10% in Europe, 5-7% in Turkey and 10% in the UAE. But it is encouraging that, despite the drop in purchase prices, rental rates are increasing in megapolises such as London, Dubai, Istanbul and New York. Now is the most favorable time to invest. Looking at Dubai, a property of 40-50 sq. meters can be purchased for an equivalent of $100,000. Developers in the UAE offer fully equipped apartments, and if an investor purchases such real estate, the only thing he needs to think about is the furniture and interior accessories. This is a big bonus, as renovation would be energy-consuming for foreign buyers. It can be confidently said that there are attractive markets where you can invest from $100,000, which is the average cost of an apartment in Almaty. But when investing in foreign markets, you can get much more income from renting out. In addition, in developed countries, there are government bodies responsible for the real estate sector, i.e., the investor is fully protected from unscrupulous tenants, as the rent amount is paid for half a year or even a year in advance.
You assist with getting citizenship or a residence visa. How complex and time-consuming is the process?
Investors all over the world have shifted their investing trend – buying real estate for the sake of real estate is no longer the primary goal. People want bonuses in the form of residence visas to other countries which makes purchasing real estate more attractive. Many developers offers interest-free installments, and investors may pay 15-20% on construction stage then pay for the remaining of the real estate cost once they have moved in the property. This is indicative of the confidence developers have in their markets that they can offer such conditions to their purchasers. If people from Kazakhstani decide to get residence or citizenship to another country then they have a list of over 20 countries to choose from. Their governments launched programs to acquire citizenship and visas after investments. This process usually takes from two to six months. The investor must prove non-conviction, present confirmation of sustainable income, and also to be of legal age. Without our help no investor would be able to get through as in Government programs individuals can only invest through accredited agencies like our company.
Let's talk about the "brain drain". Who are your clients? What is their profile?
The term "brain drain" is relevant all around the world. Professionals leave their countries to achieve professional growth in more developed countries. We categorize our clients into three groups. The first are those who have earned capital and wish to live a decent life in wealth and comfort. The second are those who want to send their children abroad to study. The third are young blood, those who seek to achieve success in other countries.
How is the commercial real estate market abroad today, what is the price range and what are the terms of purchase in this segment? And I also would like to ask about rental real estate - what trends can be observed there?
Kazakhstani people are more likely to buy residential real estate than commercial real estate, but some still invest in commercial real estate as additional assets. This is an interesting process since commercial real estate is leased to big companies for a long-term contract, which prevents investors' risks. Buying a good commercial real estate with a high demand is one of the most challenging tasks for our experts, as it requires quick decisions. However, as our citizens not having much investing experience, they are unable to make a decision quickly due to the fear of losing money. The rental rate in megacities such as London, Madrid, New York, Dubai, and Istanbul is very high since the local population usually lives in rented apartments and houses for their whole lives. Therefore, our team conducts a thorough analysis and chooses investment objects, taking into account the needs and interests of our clients.
Do you plan to expand the geography of countries where Kazakhstani citizens can purchase real estate? What plans do you have for upscaling your business?
This year, we have added residence visa and citizenship obtaining services. We observed the demand from our investors for Russia and added Moscow to our portfolio. We also included countries in Southeast Asia, as these countries are rapidly developing and their economies are strengthening. We are allowing investors to enter new countries. We also plan to open offices in Shymkent and Atyrau - I think this is a good plan for the future. We are also considering to add South Korea to our portfolio - there is a trend of investing in warehousing. As South Korea is an exporting country, there is an acute shortage of storage space and the country welcomes investments into this sector. We are also seeing an increase in the Malaysian market and are currently gathering all the necessary information. Before launching sales, we are preparing carefully and studying the market deeply to minimize the risks of our investors.
Thank you for the conversation, Togzhan. Good luck!
Madina Yerik
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