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Mongolia’s mining wealth reaches the construction sector

November 7, 2013Article by Ray Withers

Mongolia’s construction sector is going from strength to strength. As the nomadic country’s populace shifts to the cities, at a rate that is seeing the capital Ulaanbaatar growing by 50,000 people per year, transportation and urbanisation projects are underway across the country.

Indeed, according to the World Bank’s 2013 report, capital expenditure in Mongolia has increased 35-fold during the past decade. More than 16% of all bank loans during 2012 were made to the construction industry, with the sector’s contribution to GDP expanding by an impressive 25.6% for the same year.

From underground to above ground

The mining sector has been Mongolia’s focus during recent years, due to the rich mineral deposits discovered within the country, worth an estimated $1.4 trillion. The industry makes up a fifth of the country’s economy, with foreign companies extracting copper, gold and coal. The government, naturally, gets a significant share of the profits.

It is this newfound wealth from underground which is contributing to Mongolia’s rapid urbanisation above ground. The lure of the newly rich cities is drawing people in from the countryside, opening their eyes to a new kind of more affluent lifestyle.

Government support

The Mongolian government seems happy to support the construction sector’s progress. It has provided $86.3 million in capital loans designed to improve the supply chains of construction materials and thus underpin the sector’s growth. It has also passed a raft of measures that make Mongolia a more welcoming environment to foreign investors.

The new face of Mongolia

The result of all this positive news is the emergence of the new face of Mongolia. Citizens in the capital are demanding higher standards in everything from accommodation to handbags, which further impacts on the construction sector.

The demands have led to the construction of an exciting new project in Ulaanbaatar – luxury shopping and leisure complex The Village @ Nukht. With construction well underway and due for completion on target in mid-December 2013, the site has attracted global investment interest due to its anticipated rental returns of 14.8% NET and optional assured yield of 12% for 24 months. The high end retail units are available to investors from just $254,000, making The Village @ Nukht an excellent opportunity for investors from across the world to be a part of Mongolia’s bright new future.

Get in touch for more information on this exciting new opportunity.

Author

Ray Withers

Ray has over 17 years’ experience in the international property market and bought his own first international property investment back in 2002. Aside from running Property Frontiers, Ray has been involved in residential, hotel, student and commercial property investment and development in both the UK and overseas and co-wrote "Where to Buy Property Abroad - An Investor's Guide". As Founder and Trustee of the Frontiers Foundation, Ray is directly involved with many of its projects to ensure they have a direct and tangible impact in individual communities across the globe. He is passionate about property, travelling, scouting out new opportunities and finding time to spend with his young family.
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