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BCG: Uzbekistan`s construction sector undergoing transformation
Global Trends and Their Impact on Uzbekistan
According to the BCG forecast, by 2030 the world’s urban population will increase by 5 billion people, which will lead to an increase in the need for housing and infrastructure facilities. However, the problem of affordable housing remains acute.
“Over the past 30 years, the cost of housing has grown 2-4 times faster than the population’s income, which makes buying an apartment inaccessible to young people,” Rubin emphasized. At the same time, developers are focusing on large-sized apartments for sale, while demand is shifting towards compact rental properties.
He noted that in terms of demand, more and more people, especially young people, prefer, firstly, small apartments, and secondly, not to own, but to rent, in order to maintain mobility. For developers, this is a fundamentally different business model, which not everyone is ready for.
There are similar changes in the commercial segment. The share of online sales in retail will reach a quarter of the total by 2025, which reduces the demand for traditional retail space. This requires rethinking the concept of shopping centers and adapting them to changing market needs.
Lack of personnel and technological solutions
The shortage of qualified personnel in construction is another challenge. “On the one hand, this creates difficulties, on the other, it encourages companies to introduce new technologies,” the BCG representative noted. In the United States, for example, over 40 years, the gap in productivity in the construction sector compared to other industries has increased by 2-3 times.
The introduction of innovations such as big data, predictive analytics, AI, 3D printing and virtualization will help to close this gap. However, their use remains low, and the state could more actively support these initiatives.
New formats and sustainable construction
The pandemic has changed the approach to the use of office space. Their average occupancy rate has dropped from 65-70% to 40%, which gave rise to the term "zombie offices".
In this situation, two paths are possible: converting offices into residential spaces or developing coworking spaces with additional services. In New York, 600 thousand square meters of office space have already been converted to residential use.
Another important aspect is sustainable construction. The use of "green" materials and energy-efficient technologies can reduce primary energy consumption by 75% and reduce the need for heating and electricity by 90%.
Despite the higher cost of construction, such projects pay for themselves due to operational advantages.
Key tasks for Uzbekistan
Against the backdrop of these challenges, Uzbekistan will have to adapt to the changing market. “It may not be so noticeable now, but demand is not what it used to be. Developers who are the first to respond to these changes will gain a competitive advantage,” concluded Grigory Rubin.
Among the priority steps: reducing construction costs, digitalization, introducing sustainable technologies and developing new business models focused on the changing needs of the population.
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