“A Property Is More Than Just Square Meters”: How a Systematic Approach Changes the Profitability of Commercial Real Estate

Andrey Kononenko on commercial real estate management, the Kazakhstan market, and why practitioners need science Andrey Kononenko began his career the same way most property managers do: searching for tenants, resolving disputes, and patching holes in a property’s budget. But at some point, he asked himself a question that changed his professional trajectory: why, with similar locations and comparable conditions, do some properties consistently generate strong returns while others barely break even? Finding the answer took years of hands-on practice, hundreds of real-case analyses, and several academic publications. Today, Kononenko is the Director of Arlan Finance LLP in Almaty and one of the few specialists in the region who builds commercial real estate management as a comprehensive system rather than a series of reactions to ongoing issues. Svetlana Orlova interviews Andrey Kononenko  — Andrey, how did your journey in commercial real estate management begin? — It started with practice that raised more questions than it answered. I quickly noticed that most management decisions were made intuitively: you find a tenant—that’s good; they leave—you look for another. A vacancy period of two or three months was considered normal. Hardly anyone calculated what that actually cost. That concerned me, because behind every “normal” vacancy were real financial losses—actual money the owner simply did not receive. Gradually, I began to analyze how property financial models function, where potential revenue sources are hidden, why tenants leave, and how to prevent it. It turned out that most properties lose between 30% and 70% of their potential income—and it’s not due to poor location. The real issue is the absence of a system. — What does your work with a specific property look like in practice? — Everything begins with an audit. I analyze how much the property actually generates per square meter, the average vacancy period during tenant turnover, and whether there are unrealized revenue sources—such as facades, lobbies, parking areas, or digital screens that could generate advertising income but remain unused. Typically, the findings are revealing: the owner believes they have a “normal property with normal occupancy,” but in reality, up to one-third of its potential remains untapped. From there, the work proceeds across each direction. This includes occupancy optimization through dynamic pricing and building tenant relationships in a way that allows us to anticipate departures and respond in advance. In addition, we address legal and financial matters: litigation, overdue receivables, technical failures—all of which deter high-quality tenants and quietly erode income. Based on this work, I developed my own integrated revenue management methodology, which allows a property to be managed systematically rather than reactively. — Kazakhstan is a specific market. What keeps you here? — Precisely its specificity. Almaty is growing rapidly, international retailers are entering the market, and high-quality properties are emerging. At the same time, the culture of professional property management is still developing. Many owners manage their properties independently or with minimal resources. This means that the gap between what a property could earn and what it actually earns is especially significant here. For me, that’s not a problem—it’s an opportunity. Overall, the CIS market—Kazakhstan, Russia, and other countries in the region—is at roughly the same stage of maturity. Systematic management is still a competitive advantage rather than a standard. In Europe and the United States, this has long been the norm. I find it interesting to work at this transitional moment, when the industry is just beginning to recognize the value of a professional approach. — You publish academic articles in journals such as “Molodoy Ucheny,” “Aktualnye Issledovaniya,” and “Internauka.” Why does a practitioner need science? — I’m asked that often, and I understand why. The answer is simple: when you are required to describe your approaches in a scientific article—to define them, conduct analysis, and cite sources—you begin to understand your own work more deeply. Patterns that were intuitive in everyday practice become explicit. You can test them, refine them, and share them with others. There is also a practical aspect. Publication in a peer-reviewed journal means that your ideas have undergone independent evaluation. This matters to clients: they want to know that what they are being offered is not just a set of personal beliefs, but a verifiable approach. That transparency is important to me. — What do you say to property owners who believe that “everything is already fine”? — I ask them one question: do you know how much money you are losing right now? Not what you lost in the past—but what you are losing today, every single month. Vacant spaces, unmonetized advertising surfaces, tenants leaving because no one worked on retention—these are real funds slipping away.