As Chinese developers navigate a bruised property sector at home, more firms are turning their focus outward — specifically, to Central Asia.
Uzbekistan has quickly become one of the most appealing landing spots for Chinese developers looking to escape years of debt, strict government lending regulations and a large stock of unsold housing, the Times of Central Asia reported. The country’s population is growing fast, and demand for housing is through the roof as more than 60,000 new households form every year.
About 85,000 Uzbek families are waiting for housing, but annual construction in the country only increases the existing stock by 1 to 2 percent. As a result, the nation has faced a chronic housing shortage, especially in the capital of Tashkent. This is where sustained and large-scale capital investment — in this case, through developers from China — comes in, aiding in the push for more housing construction while also committing to more stable, high-demand markets.
Chinese firm TSC HK Investment, for example, is planning a $340 million residential complex and business center in Tashkent’s Chilanzar district. Tashkent officials have also signed agreements totaling about $1 billion with Chinese state-owned builder China State Construction Engineering Corporation; part of that includes a major housing development valued at $440 million. Outside of Tashkent, another Chinese investor is planning to designate $250 million for a modern complex across nearly 136 acres in the city of Babur.
For China’s builders, Uzbekistan is an attractive option that absorbs China’s excess capacity in construction services, heavy machinery and building materials like steel and cement. Investing in the Central Asian nation also gives Chinese firms a chance to showcase their urban planning playbook of high-density, mixed-use development that fuses apartments with business centers, educational facilities and public services.
The Chinese investments will also generate employment for the Uzbek economy. The TSC HK Investment project alone is expected to create 1,000 new jobs in Tashkent.
It remains to be seen how Uzbek policymakers approach balancing the inflow, whether that be encouraging joint ventures with local contractors, requiring partial use of local labor and materials or leveraging Chinese know-how without letting it overwhelm the market.
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