Construction & Real Estate
From The Report: Mongolia 2015
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Rapid economic expansion in Mongolia over the past half-decade has played out across many of the country’s constitutive industries, and construction and real estate are no exceptions. Much of this growth took place in the residential segment, which has been the focus of an increasing number of large-scale, state-led development projects in recent years. Given the attention the construction sector is drawing from the public and private sectors, most local construction firms are looking forward to higher revenues in the years ahead. Growth in the real estate sector can be attributed to a state-sponsored mortgage scheme, fast-growing demand for commercial retail space, and, more broadly, increasing urbanisation and rising incomes among the burgeoning middle class. Despite challenges, including the dip in real estate prices in late 2014 and early 2015, many property developers and market-watchers remain optimistic about the future.

This chapter contains interviews with G. Batdorj, Executive Director, Khutul Cement Shohoi JSC; and B. Jugder, President, National Development Corporation.

Articles from this Chapter

Overview

Construction activity in Mongolia driven by the residential and infrastructure segments
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Rapid economic expansion in Mongolia over the past half-decade has played out across many of the country’s constitutive industries, and construction is no exception. According to the National Statistical Office (NSO), works carried out in 2014 totalled MNT2.2trn ($1.3bn), up 16.3% on 2013. Much of this growth took place in the residential segment, which has been the focus of an increasing number of large-scale, state-led development projects in recent years. One of the latest initiatives, a low-cost…

Interview

G. Batdorj, Executive Director, Khutul Cement Shohoi JSC
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Interview: G. Batdorj What is the importance of increasing Mongolia’s cement production capacity? G. BATDORJ: Mongolia has a sizeable cement market thanks to booming commercial and residential construction sectors, as well as the new airport and highways. The country’s vast territory and corresponding infrastructure needs (e.g., roads and railways) require a steady supply of high-quality cement. Demand is also being driven by rising capacity among heavy industries, a key towards moving up the…

Analysis

The prices of building inputs on the rise in Mongolia’s construction sector, driven by fast-growing demand for materials
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In 2014 Mongolia’s construction industry saw a major uptick in output. Driven in large part by the government’s ongoing residential housing development programmes, the sector grew by 16.3% over the course of the year, according to data from the National Statistical Office. One key challenge during this period of rapid expansion has been sourcing construction materials. Only a handful of domestic companies produce building supplies in Mongolia – primarily cement, concrete, bricks and a small…

Overview

A handful of segments driving property development in Mongolia
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Despite a number of macroeconomic headwinds, in 2013 and 2014 Mongolia’s real estate market expanded substantially. This growth can be attributed to a range of forces, including government-led construction projects; a state-sponsored mortgage scheme; fast-growing demand for commercial retail space; and, more broadly, increasing urbanisation and rising incomes among the burgeoning middle class. While the country has seen steadily declining levels of foreign direct investment (FDI) in recent years,…

Interview

OBG talks to B. Jugder, President, National Development Corporation
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Interview: B. Jugder What can construction companies do to remain competitive despite the economic downturn? B. JUGDER: For too long, the market has been dominated by real estate developers that double as construction companies, and vice versa. However, both tasks require different skill sets. When only one company buys land, and invests in infrastructure and new buildings, there is a natural tendency to inflate prices for the end-user, contributing to a real estate bubble. Therefore, we should…