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21 Jul, 2007 03:15

Chechnya attracts real estate investors

Reconstruction and development has become the priority in Chechnya's capital Grozny now that security has been restored. Foreign and Russian investors have been flooding the real estate market, raising concerns about a lack of affordable housing.

Choy Mun Gyu came to Grozny from South Korea. Together with other foreign entrepreneurs he is looking for investment opportunities in Chechnya.

Choy Mun Gyu is quite optimistic about what he could observe in the republic: “At first we thought it was dangerous here. But what our group saw in Chechnya, makes us think that it’s much safer now. And we are going to tell that to our colleagues”.
The Koreans plan to invest somewhere between $US 2 and 3 BLN in building a new suburban neighborhood in the Chechen capital. It will provide affordable housing for over 50, 000 people.

In the past decade Chechnya’s economy and infrastructure have been devastated by war. Hundreds of facilities, including apartment buildings, were destroyed in clashes between federal troops and armed militants.

It took several years for Russia’s Interior Ministry and the Chechen police to stop the violence and to provide security. When the war came to an end, the priorities changed. Now billions of rubles are being spent on reconstruction.

If just a few years ago the streets of Grozny looked like a war zone, considerable changes are now visible everywhere. There are dozens of new shops, restaurants and renovated apartment buildings. From the very centre of the city to the outskirts, Grozny looks like an average Russian town.

Small businesses and large retail outlets are returning to the republic, and construction companies offer anything – from simple flats to luxury housing. For example, some apartments in central Grozny cost up to $ US 170, 000.

Real estate agents say the market is overheated, and they expect the prices to fall.

People, whose home has been seriously damaged during the war, now have a chance to return to normal life. Dozens of buildings are being renovated by the federal government without any charge.

Aslan Karimov and his family live in one of Grozny’s suburbs. Their flat now looks almost like a new one.

“Just four or five months ago it was almost impossible to come close to this house. There are certainly positive changes. We see improvements, and it’s much easier to live here,” notes Aslan Karimov.

The federal government is planning to continue funding Chechnya’s reconstruction plans for at least three more years. Together with foreign investments, there is a chance the destruction caused by the war will remain only as a terrible memory. For ordinary Chechens, it will bring what they have been long-awaiting: new jobs, affordable housing and security – all in all, the prospect of a normal life.