What sectors is MG Holding involved with and what is the company strategy?
MG Holding is a young company compared to other leading companies, especially in our sector. Movlatgiri Mestoev, the founder of the company, is an experienced and successful businessman. He has been involved in a number of different business ventures and started MG Holding in 2012 as our umbrella brand. Under MG Holding, we currently have three companies, the most active being MG Development, which I am the Chief Executive of. The company operates in two of Kazakhstan's fastest growing sectors: commercial real estate development and large-scale infrastructure development. In addition to MG Development, we have MG Construction, and we are establishing MG Sports, which is working to bring some exciting sports and fitness brands to Kazakhstan and the CIS region. Our strategy is to keep MG Holding as our umbrella brand and create dedicated companies under it when we expand into a new sector where we see opportunities that are complementary to other group activities. The way we execute a particular project is to bring together the most appropriate and experienced national and international teams on a project-by-project basis. Accordingly, we have a strong international mix in our business and it provides a structure that can expand wherever there is an attractive opportunity or need. We are focused on projects in Kazakhstan, where we have considerable experience, as well as other CIS countries.
The St. Regis Astana Hotel and Residences brings a well-known and reliable brand to MG Holding. How did partnering with Starwood Hotels & Resorts come about?
First impressions last forever. Therefore, we discussed what brand would best reflect MG's values and vision. As this is the first project we have launched and implemented, it was critical that it set the tone for the overall image of MG Holding and MG Development. After reviewing potential brand partners, St. Regis emerged with strong values consistent with ours. Globally, it is a limited and exclusive product compared to other brands. St. Regis began in the early 1900s in New York with a concept of being more of a members club than anything else, and that is very much the essence of the Astana Residences. Over the past century, the St. Regis brand has evolved from a single property to become one of the most internationally revered names in the hospitality industry. The success of the St. Regis brand is a result of commitment to delivering an unrivalled setting and bespoke service to each resident or guest, from arrival to departure. As our discussions progressed and we got to know the St. Regis team, we found our vision and values were aligned, and we welcomed their enthusiasm to enter the Kazakh market—St. Regis wanted this to be one of their top two or three new projects worldwide. As we worked through plans together, we were delighted to confirm our initial sense that we shared common values and a similar approach to business. Within a short period of time, we finalized our agreements and announced the project in July 2014. The St. Regis team has proven to be a good partner and has been involved in every stage of development—from the concept to the engineering to the interior design. We both believe the project should be executed to best international standards, including environmental standards. We are proud that the project is the first BREEAM certified development in Kazakhstan. For those not familiar with BREEAM, it is the world's leading sustainability assessment method for master planning projects, infrastructure and buildings. BREEAM inspires developers and creators to excel, innovate, and make effective use of resources. The focus on sustainable value and efficiency makes BREEAM certified developments attractive property investments and generates sustainable environments that enhance the wellbeing of the people who live and work in them. The project is located in Astana Central Park on the river and will have 120 rooms, up to 50 St. Regis Residences, and commercial space for entertainment and retail. We are planning to have a soft opening of the development by December 2016 and a full opening in the first quarter of 2017
The St. Regis project will introduce a new level of luxury to the region. Will this make Astana a more international tourist destination?
Our mission is to make the development the ultimate solution that combines lifestyle with real estate and sets a new standard of luxury living in Kazakhstan, while also staying true to the legacy of the St. Regis brand. We are confident the project will make Astana more attractive to visitors, and there is no question about Astana's potential. As the capital of Kazakhstan, it continues to grow significantly, with a population that has increased from 275,000 to nearly 900,000 over the past 16 years—forecasts suggest that by 2019, it will reach 1.5 million. Kazakhstan is, of course, the largest economy in the Commonwealth of Independent States (CIS) and Central Asia, and enjoys an enviable position on the Silk Road between the East and West, bringing attractive international trading opportunities. With the changes that have been made to visa and customs processes, Astana is becoming a more and more popular destination, and next year's Expo 2017 will boost the country's profile and reputation. Accordingly, we are expecting many of our customers to be business travelers, who will be attracted by the facilities at the St. Regis and want to combine business and leisure during their visit to Astana.
What are the main challenges in doing business in the region?
If I found Kazakhstan seriously challenging, I wouldn't have spent 15 years of my life here with my wife and family. All of our designs are created by leading foreign architects and engineers and in all our activities we adhere to the BREEAM certification standards. As we are pioneering these standards in Kazakhstan, there are no benchmark projects to compare to, making proper feasibility studies and evaluation difficult for potential investors and partners. On the other hand, it is a exciting environment and there are many new opportunities waiting for us. Not only do we have the chance to open a new chapter in real-estate development in Kazakhstan, we will also set the standards for other companies, making our own projects future benchmarks. For local and international investors, we want our projects to be the baseline—we see setting high standards as part of our social responsibility to the country and people of Kazakhstan.
What are your targets for 2016?
For now, our main target is to complete the St. Regis project on time. In connection with this, we recently opened a sales office in Almaty. We have also appointed Cushman & Wakefield, a leading global commercial real estate services company to commence sales of St Regis Residences. Within the MG Group, we are hard at work on a number of further initiatives, including in the sports and fitness market, and expect to announce two or three new projects before the end of 2016.