Construction & Real Estate
From The Report: Mongolia 2012
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The Mongolian construction industry has seen a surge of activity in the past two years. The driver is government spending, particularly the New Development Programme, which will address roads, railways, affordable housing, rural development and industrial development schemes, with a price tag of some $28.6bn. One key part of this is the 100,000 houses project, which represent an attempt to offer modern, affordable housing to the many citizens who still live in traditional gers. This will address some of the huge demand for homes in Ulaanbaatar. On the upscale front, luxury real estate is a growing market aiming to tap into the fortunes that will be created through the mining projects.
This chapter includes an interview with D. Ganbaatar, President, Max Group.

Articles from this Chapter

Overview

Bricks and mortar: Conditions are set for ongoing expansion
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With surging economic growth and a substantial amount of pent-up demand, Mongolia offers a wide range of opportunities for construction firms and investors. Indeed, figures from the third quarter of 2011 showed the sector expanding by a staggering 67% year-on-year (y-o-y) by value, up from 38% y-o-y growth in the second quarter. A wide variety of projects are currently under way or in the initial planning stages, including new airports, schools, roads, bridges and water initiatives. The building…

Interview

Building blocks: OBG talks to Dagvadorj Ganbaatar, President, Max Group
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Interview:Dagvadorj Ganbaatar What have been the trends in the Mongolian real estate market over the last three years? DAGVADORJ GANBAATAR: Just 10 years ago, most of the people in Mongolia were leaving our country for better work and living opportunities abroad. However, recent economic growth has changed this emigration pattern, with large numbers of Mongolians now returning, and we expect this reverse trend to continue. Return migration and economic growth have created significant demand…

Analysis

Rural areas rising: The government plans to revitalise the heartland
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Urbanisation has been a major factor in shaping modern Mongolia. Recent demographic changes in the country’s four major geographical areas have stark implications for the construction sector. In 1990 the percentages of the population living in the Western Region and the Khangai Region were similar to those living in Ulaanbaatar, at 20%, 27% and 26%, respectively. By 2000 the capital was home to around 30% of the population, and by 2010 around 40% of the population lived in Ulaanbaatar, whereas…

Analysis

In from the cold: A major housing project could have a positive impact on many families
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A central part of Mongolia’s ambitious New Development Programme (NDP) is the “100,000 houses” project. The aim of the scheme is simple – to construct 100,000 units of affordable family housing across the country, with the majority of these – 75,000 units – being built in Ulaanbaatar. Completing this programme will likely be one of the most important tasks carried out by the construction sector in the years to come. BOOMING DEMAND: The population of Ulaanbaatar has grown significantly…

Overview

Built ambition: Wider economic growth is underpinning demand
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Thanks to rapid economic growth and the unleashing of rising demand, Mongolia’s real estate sector is currently experiencing something of a comeback. Centred on and dominated by Ulaanbaatar, the market has experienced a strong growth in activity as well as yields in 2010-11, with the expectation that this expansion will continue into 2012. In the first quarter of 2011 alone, according to R2 Research, some 62 new developments were under way in the city. In the same period, average land prices…

Analysis

Beyond the capital: A number of regional centres are growing rapidly
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Though investors have tended to focus solely on Ulaanbaatar when it comes to real estate development, the country also has a number of potentially promising second- and third-tier conurbations. Indeed, the nation’s mining surge is increasingly a determining factor in the development of urban centres outside the capital, both as new settlements spring up and old ones expand. The government’s ambitious plans to enlarge the road and rail networks, alongside the development of a variety of domestic,…

Analysis

Space race: Demand for non-residential property is on the rise
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Mongolia’s retail, office and hotel segments have seen some positive developments in recent years. High-end commercial space in the capital, Ulaanbaatar, is currently valued at something of a premium. As with the residential sector, the commercial segment was badly impacted by the international economic downturn in 2009, with many projects suspended. More recently, however, some of these developments have started up again, and completed projects are benefitting from high demand and high…

Analysis

Urban migration: The rapid growth of cities creates challenges for planners
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The process of urbanisation globally is undeniable and irreversible. According to McKinsey, the world’s 600 major cities will house 2bn people by 2025, or 25% of the global population. These urban centres will generate 60% of global GDP. Similarly, an April 2011 report by Frost & Sullivan, a business research and consulting firm, noted that “future urbanisation will drive integration of core city centres or downtowns with suburbs and satellite cities, resulting in expanding boundaries…