Construction sector in Azerbaijan

An Expert's View about Building Products and Construction in Azerbaijan

Posted on: 28 Jan 2012

Overall economic development and a Presidential decree to privatise the construction sector in 1997, has resulted in a booming construction industry in Azerbaijan.

Construction sector in Azerbaijan Azerbaijan is the third fastest growing economy in the world and has a booming industry. According to 2011 statistics, 18% of foreign investment in Azerbaijan is in construction sector Market overview Overall economic development and a Presidential decree to privatise the construction sector in 1997, has resulted in a booming construction industry in Azerbaijan. There are several reasons behind the rapid development of business in Azerbaijan in the last few years; the main one is the large capital investment in local infrastructure, related to oil and gas projects. As a result, this business area has evolved into a very competitive sector with a number of major companies able to deliver the highest international standards in construction. A number of local and foreign developers are active in the field. The hot spot of the market is undoubtedly the capital, Baku. Growth in the construction sector of 37% since 2004 is largely attributed to increasing opportunities in the market. It is increasingly competitive, although there are certainly opportunities for newcomers, particularly in luxury apartments, guest houses management and international sales areas Key opportunities The sector is growing year by year. Substantial increases in business and residential construction have been registered since the late 1990s, in response to the growth of both commercial and household purchasing power. With the growth of demand for better living conditions, real estate prices in Azerbaijan are increasing on yearly basis. Because the income of the population is growing with the state and industry development, the demand for new construction has been increasing. Although property prices have decreased over the past year due to unoccupied real estate in Baku, it is expected that demand for real estate will increase when work on Phase II of Shah Deniz gas field gathers pace. This will result in an increase in the number of workers in the capital, increasing both demand and prices. There are also similar opportunities in agricultural, transport and industrial sectors, resulting from positive economical reforms and target programmes carried out by the Azerbaijan government for developing the non-oil sectors. As market research in the field shows, there are currently significant opportunities in: ξ Introducing state-of-the-art construction technology in Azerbaijan ξ Architectural and engineering services ξ The production of high quality building materials. Latest export opportunities - Azerbaijan Latest export opportunities - Construction Getting into the market As a result of the Decree in 1997, the state monopoly of the construction sector has been eliminated, and private individuals may now engage in construction activities. As for the law “On the Basics of City Construction”, foreigners and foreign legal entities may engage in construction works in Azerbaijan, only in conjunction with Azerbaijani nationals or legal entities. More about doing business in Azerbaijan. Contacts Market intelligence is critical when doing business overseas, and UKTI can provide bespoke market research and support during overseas visits though our chargeable Overseas Market Introduction Service (OMIS). To commission research or for general advice about the market, get in touch with our specialists in country - or contact your local international trade team. Ann Herd , British Embassy Azerbaijan. Tel: +994124377870 or email: Nurana Muradova , British Embassy Baku. Tel: +994 12 437 7870 or email: Contact your local international trade team UKTI Events UKTI runs a range of events for exporters, including seminars in the UK, trade missions to overseas markets and support for attendance at overseas trade shows. Latest events - Construction Major Events Baku Build 2012 18 th Azerbaijan International Construction Exhibition 17-20 October 2012 Useful links More about OMIS and other UKTI services for exporters UK in Azerbaijan
Posted: 28 January 2012

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