Mongol Tower project in Mongolia - by Tom Tsogt

Developer: Mon-Uran LLC Prepared by: Mr. Tom TsogtProject leader: Mr. Anar

Ulaanbaatar, Mongolia 2014

MON-URAN DEVELOPMENTMixed use high rise building in Ulaanbaatar

December 20, 2013

PROJECT UNDERSTANDING

FULL VERSION

Ulaanbaatar in 1913

PROJECT UNDERSTANDINGMixed use high rise building in Ulaanbaatar

This unique opportunity now exists for a

select-few investors to invest in a property

development in Ulaanbaatar, Mongolia.

The information provided in this presentation are all approximate. The prices are all projected rates according to the preliminary research we have conducted and are not final. The information are subject to change without any prior notice.



THE PURPOSE OF THIS PRESENTATION IS FOR DISCUSSION ONLY!


STIRCTLY CONFIDENTIAL



1. MONGOLIA

2. REAL ESTATE

3. THE TEAM

4. THE SITE

5. AMBITION

6. STRATEGY

7. VISION/CONCEPT

8. PRE-STUDY

9. COST

10. OFFER

TOPICS

1. MONGOLIA

2. REAL ESTATE

3. THE TEAM

4. THE SITE

5. AMBITION

6. STRATEGY

7. VISION/CONCEPT

8. PRE-STUDY

9. COST

10. OFFER


1TOPICS


MONGOLIA

Ulaanbaatar city in early days

Mongolia is one of the most exciting investment opportunities

currently available in the world.

The economy is forecast by the IMF to grow 14% yearly through

to 2016, underpinned by a thriving mining industry and China’s

increased demand for coal.

Mongolia remains the FINAL FRONTIER for investors to benefit

from continual and rapid growth.


MONGOLIA - OVERVIEW

Tiny population rich in mineral wealth

Construction of world class mines

Located between two World’s Biggest Economies

Experiencing a high annual GDP growth rate


MONGOLIA - OVERVIEW


MONGOLIA – EASE OF DOING BUSINESS


MONGOLIA – ECONOMIC FREEDOM

Mongolia is recognized as one of the world’s fastest growing economies.

Mongolia


MONGOLIA

Old ancient city in 1913


1. MONGOLIA

2. REAL ESTATE

3. THE TEAM

4. THE SITE

5. AMBITION

6. STRATEGY

7. VISION/CONCEPT

8. PRE-STUDY

9. COST

10. OFFER


2


REAL ESTATE

Ulaanbaatar today

Mongolian real estate is proving to be an attractive portfolio

diversifier for a growing number of private and institutional

investors worldwide. This is an incredibly exciting time to be

entering the market that offers rare first-mover advantages.


REAL ESTATE


REAL ESTATE – MARKET OVERVIEW

VIEWAsia Pacific Investment Partners

HOW

MONGOLIAN REAL ESTATE MARKET

1. Fastest growing economies in the world

2. Democratic and politically stable

3. Strong protections for real estate ownership, even for foreigners

4. Skyrocketing Demand for Property

5. Constrained Supply

Asia Pacific Investment Partners




VIEWM.A.D. Investment Solutions

HOW



1. Economic Growth

2. Significant FDI Inflows

3. Rapid Urban Growth

4. Lack of Urban Infrastructure

5. Upwardly Mobile, Young population

M.A.D. Investment Solutions




VIEWMongolia Growth Group

HOW



Mongolia Growth Group



1. Next emerging economy

2. Blessed with natural resources

3. Bordered with China and Russia

4. Experiencing similar types of growth as Qatar and Kazakhstan

5. GDP growth to attract more foreign investors in near future



With the expansion of the mining and financial services industries,

including the country’s insurance and lending sectors, the demand

for high quality Grade A office space, residential apartments and

hotels is expected to grow substantially.

Ulaanbaatar today



1. MONGOLIA

2. REAL ESTATE

3. THE TEAM

4. THE SITE

5. AMBITION

6. STRATEGY

7. VISION/CONCEPT

8. PRE-STUDY

9. COST

10. OFFER

3

TOPICS


THE TEAM

Our management team has an exceptional on-the-ground mix of local

and international EXPERIENCE. We strongly focus on the accurate

operational execution of the projects within the competitive

marketplaces of the local economy.

Our team source ideas and investment OPPORTUNITIES for the

investors and collaborate closely to design ways of growing the

business on long-term relationship.


THE TEAM

Anar

Erdene

Erdenetuya

Amarzaya

Orgil

Tsolmon Uyanga

Tom


THE TEAM - INTRODUCTION

TeamLeader

BusinessDeveloper

Marketing& Sales

BusinessDeveloper

Local relations

AssociateArchitect

ConstructionMonitoring

Coffee boy

1. MONGOLIA

2. REAL ESTATE

3. THE TEAM

4. THE SITE

5. AMBITION

6. STRATEGY

7. VISION/CONCEPT

8. PRE-STUDY

9. COST

10. OFFER


4

TOPICS


THE SITE

Mongolia in 1913

The following slides will show our future development location and the

comparison with surrounding buildings in the city. The placement of

our project in Ulaanbaatar city will be another pearl on the string of

high rises in the main road of Chinggis Avenue.

The building itself will become a landmark of modern architecture in

the city and will be the generator for a new and positive development.


THE SITE


N

THE SITE – DEVELOPMENT AROUND THE SITE


N

Blue Sky Tower

Central Tower

Shangri-La MCSAltai TowerMonnis Tower

ICC Tower


MU

DEV

ELO

PM

ET


MONGOL TV TOWER

MONNIS TOWER BLUE SKY

TOWERNA

ICC TOWER

SHANGRI-LA HOTEL

FROM THE PEACE BRIDGE SIDE – CHINGGIS AVENUE STARTS HERE


MU

DEV

ELO

PM

ET


MONNIS TOWER

BLUE SKY TOWER

MONGOL TVTOWERICC TOWER

NA

NA

SHANGRI-LA HOTEL

NA

OLYMPICRESIDENCE

CHINGGIS SQUARE (FORMER: SUKHBAATAR SQUARE) – CITY CENTER STARTS HERE


THE SITE


N

THE SITE – WITHING 500 M RADIUS


THE SITE

5 min

N

City CenterChinggis Khaan Square

THE SITE – WALKING RADIUS


THE SITE

N

THE SITE – MAIN ROADS

Sun Road

THE SITE11.000 sm (1.1 Ha)

TDB BANKMIAT

TICKETINGOFFICE

TDB BANKS

BAYANGOLHOTEL

BUS STOP

BUS STOP

SUPERMARKET

CORPORATEHOTEL

SEOULRESTAURANT

GOLOMT BANKS

N

NCP SPORT HALL MONGOLIAN NATIONAL SONG & DANCE ENSEMBLE


HUNNU AIRTICKETING

OFFICE

SKYTEL

THE SITE - SURROUNDINGS

THE SITE11.000 sm (1.1 Ha)


THE SITE - ACCESS

To the city center

To the Airport

N


THE SITE – LAND INFORMATION

SITE AREA 1.1 Ha / 11.000 sm

CONSTRUCTION To be started in 2014

PLOT RATIO 70%

BUA (Built-Up Area) 110.000 including parking

TOWER NEIGHT 68 Floors / 254* meters

PROGRAM

Observatory deck 1000 sm

Residential Area for sale 20’000 sm

Serviced Apartments 17’760 sm

Hotel 19’500 sm

Offices 16’770 sm

Commercial Area 16’170 sm

Parking indoor 12’320 sm

Parking outdoor 990 sm

* http://goo.gl/kWKt0


THE SITE – CURRENT BUILDING


N

THE SITE – SITE VIEWS

NORTH VIEW

EAST VIEW

SOUTH VIEW

WEST VIEW


N

THE SITE – VIEW FROM THE SITE


VIEW TO (NORTH) FROM THE SITE



VIEW TO (NORTH) FROM THE BRIDGE – PEACE BRIDGE OVER TO THE CITY CENTER

OUR OFFICE

THE SITE

THE SITE – VIEW FROM THE BRIDGE


N



VIEW TO (EAST) FROM THE SITE – CHILDREN’S PARK



N



VIEW TO (WEST) FROM THE SITE – BAYANGOL HOTEL



N



VIEW TO (SOUTH) FROM THE SITE



VIEW TO (SOUTH) FROM THE BRIDGE – PEACE BRIDGE OVER TO THE AIRPORT


THE SITE


THE SITE – SURROUNDING AREAS (AERIAL VIEW)

Central Business District

THE SITE

Center Area

PARLIAMENT BUILDINGAND

CITY CENTER


THE SITE – SURROUNDING AREAS

N

INTE

RN

AL


THE SITE – INITIAL S.W.O.T ANALYSIS

EXTE

RN

AL

STRENGTHS

OPPORTUNITIES THREATS

WEAKNESSES-Located on one of the main roads of Ulaanbaatar-No adjacent towers to obstruct views-Central location (CBD)-Close to every locations by foot

-Less than 0.5 kms away from the City Center-Within walking distance from the Public but stop

-Only one road to access the site

-Unknown future development of adjacent plots might affect views from tower

Ulaanbaatar today


1. MONGOLIA

2. REAL ESTATE

3. THE TEAM

4. THE SITE

5. AMBITION

6. STRATEGY

7. VISION/CONCEPT

8. PRE-STUDY

9. COST

10. OFFER


5

TOPICS


AMBITION


AMBITION

Our company owns the land and there is no investment needed to

acquire the land. And by using this opportunity we are also plan to

set few records in Mongolia by developing this ambitious project

in the heart of Ulaanbaatar city.

68Floors

ERTEarthquakeResistant

Technology

SBSmart Building

ODObservation Deck


AMBITION – FIRST EVER IN MONGOLIA

2017 Projected finish year

MU Mixed Use Development

WS World Standard Development

BM Best Management Team


AMBITION – DEVELOPMENT INFORMATION


AMBITION – SUITABLE DEVELOPMENT

S ML

XL

1. MONGOLIA

2. REAL ESTATE

3. THE TEAM

4. THE SITE

5. AMBITION

6. STRATEGY

7. VISION/CONCEPT

8. PRE-STUDY

9. COST

10. OFFER


6

TOPICS


STRATEGY


STRATEGY – 6 STEPS

2. WORLD FAMOUS

COMPANIES

3. EXTENSIVE EXPERIENCE

4. BRAND5. INCREASE

SALE AND RENT

6. WORK GLOCALLY

1. HIT THE GOAL

PRE-CONSTRUCTION CONSTRUCTIONHOMEWORK

PRELIMINARY MARKET RESEARCH

ORGANIZE DEVELOPMENT TEAM

FIND POTENTIAL PROPERTIES

CREATE CONCEPT SITE PLAN

INITIAL FEASIBILITY ANALYSIS

1

2

3

4

SEED FINANCING PROCESS

HIRE DEVELOPMENT TEAM

REDO FEASIBILITY STUDY

MEET CONTRACT REQUIREMENTS

BEGIN PERMITTING

5

6

7

8

CONSTR BIDS

MARKETING AND SALES STRATEGY

CONFIRM MARKET ASSUMPTIONS

COMPLETE FINAL FEASIBILITY STUDY

START CONSTRUCTION

9

10

11

12


STRATEGY – 6 DEVELOPMENT PROCESSES (PART 1)

POST HOMEWORK 1 POST HOMEWORK 2POST-CONSTRUCTION

SALES/RENT

LOAN DUE

MAINTANANCE

OPS MGNT

1

INCREASE SALE/RENT

ROI MANAGEMENT

FINANCIAL STATEMENT FOR SHAREHOLDERS

TBA

TBA

TBA

TBA

TBA


STRATEGY – 6 DEVELOPMENT PROCESSES (PART 2)


STRATEGY - PARTNER COMPANIES

International Law firm will be our legal partner on all of our development projects

One of the world’s top architectural company from Japanwill design the building on this development

Water feature designer company who designed Burj Khalifafountain will work on our project and design the fountain

We see CBRE as our reliable source for conducting research in Mongolian market


STRATEGY - PARTNER COMPANIES

Our local architectural company will work with internationalarchitecture company as AoR.

International hotel and resort management company will manage our hotel and residential apartments

We are looking forward to work with Ritz Carlton Hotel on this project as the management company

We are looking forward to work with Executive Apartments on this project as the management company

1. MONGOLIA

2. REAL ESTATE

3. THE TEAM

4. THE SITE

5. AMBITION

6. STRATEGY

7. VISION/CONCEPT

8. PRE-STUDY

9. COST

10. OFFER


7

TOPICS


VISION/CONCEPT


Central business districts are examples of mixed use developments

around the World and it will be generally developed for over long

periods of time. A very early example is Rockefeller Center in New

York City.

VISION/CONCEPT


1

2

3

4

5

6

Above ground

Below ground

VISION/CONCEPT - 6 DIFFERENT AREAS

HOTEL AREARitz Carlton luxury hotel has been chosen according to the research of CBRE

RESIDENTIAL 2This area is planned to be a serviced apartment managed by Marriott Executive Apartments

OFFICE AREA“A” grade office will be installed for foreign companies penetrating into Mongolian market

COMMERCIALAn opportunity exist for high quality intl. and local retail brands

CAR PARKINGFirst and biggest indoor parking in Ulaanbaatar, Mongolia

RESIDENTIAL 1This area is planned to be sold and leased


VISION/CONCEPT - AREA INFORMATION


1. MONGOLIA

2. REAL ESTATE

3. THE TEAM

4. THE SITE

5. AMBITION

6. STRATEGY

7. VISION/CONCEPT

8. PRE-STUDY

9. COST

10. OFFER

8

TOPICS

PRELIMINARY MARKET STUDY

SROUCE: MAD PropertiesMongolian PropertiesCBRE

1 RESIDENTIAL MARKET


Across the Ulaanbaatar residential property market

prices have shown almost consistent growth rate at

a remarkable 27% over the past eight years.


RESIDENTIAL APT - GROWTH RATE

2005 2006 2007 2008 2009 2010 2011 2012

27%0


Sukhbaatar District is the heart of

Ulaanbaatar city. It encompasses

the Parliament of Mongolia, the

central business district and the

earliest residential real-estate in

the city.


RESIDENTIAL APT – SUKHBAATAR DISTRICT

SUKHBAATARCHINGELTEI

BAYANGOL

PRELIMINARY MARKET STUDY PROJECT UNDERSTANDINGMixed use high rise building in Ulaanbaatar

The price curve charts

below have been upon a

basket of over 700

transactions between

2003 and 2012, with a

total transacted value in

excess of US$ 30 million

for residential properties

alone.

$2217

RESIDENTIAL APT – PURCHASE PRICES


Sukhbaatar district

averaged a remarkable

37% annual growth in per

square meter sales

prices, whilst Khan-Uul

district saw average

growth of 27.9% over the

past seven years.

$2217

$317

RESIDENTIAL APT – PURCHASE PRICES


In Q3 2012 study showed

that average pricing in

the upper-end of the

market stand at US$2,050

pSM for pre-sales. High

end projects featuring

low-density housing

maintain higher price

points at an average of

US$3,228 pSM.

134

RESIDENTIAL APT – MARKET FOCUS

346

LUXURY MARKETS

9 (1.8%)

5 (1%)


Current stocks of low-

density apartments and

housing units around

Ulaanbaatar presently

stand at around 1,088

units based upon City of

Ulaanbaatar data for

numbers of families living

in stand-alone or town-

housing that is not based

in ger areas of the city.

1088

878

771

567

501

RESIDENTIAL APT – HOUSEHOLDS


By Q3 of 2012 residential

units were selling from an

observed 143 new-build

(completed). The graph

below indicated that this

new construction activity

has been concentrated in

just two districts of

Ulaanbaatar, Bayanzurkh

and Khan-Uul.

12

41

47

2117

5

RESIDENTIAL APT – CURRENT SUPPLIES


Known future supply of

high end residential real

estate in Ulaanbaatar is

calculated at 7,920 units

by 2015. The majority of

these units are already

available for purchase

despite handover dates

two to three years in

advance.

614749

4096

2461

RESIDENTIAL APT – FUTURE SUPPLIES


In 2012 there were an

estimated 13,480 new

residential units coming online

within Ulaanbaatar, across all

segments of the market, with

up to 27,000 planned until the

end of 2015 around 7,900 of

these will be in the high-end

of the market.


860


Only around 12% of the

future supply listed is in the

high-end and low-density

market segment,

representing a slowdown in

luxury developments as

developers focus upon higher

density mid-end projects.


1603

5395

6482


In terms of pricing on the

future supply market, pre-

sales rates for future supply

average at around 85% of the

secondary and primary

market transaction rates per

square meter of completed

apartments.


$2234

$3833


For purposes of more fine-grained analysis, the residential markets have been split into three segments. Such a classificatory system enables us to provide a more detailed and nuanced view of diverse residential real estate markets operative in Ulaanbaatar.

SOURCE: M.A.D.

RESIDENTIAL APT – SEGMENTATION



RESIDENTIAL PROPERTY BASKET – SUKHBAATAR DISTRICT



WAGE BRACKETS


RESIDENTIAL APT – BENCHMARKING

$11455

$8808

$6814

$5722

$1744$1551$1538


RESIDENTIAL APT – BENCHMARKING

$8236

$1994$1538$1488

$1000


RESIDENTIAL APT - SummaryProposed apartment size

155 APTTotal pot. selling apt

20.000smTotal pot. selling area

TOTAL 18FTotal pot. selling floors

APT FLOOR DATA

223 sm

111 sm

5 APT pFloor

10 APT pFloor

PenthouseApartments

25 APT 05F

130 APT 13F

TOTAL 155 APT

APT SEGMENTATION



RESIDENTIAL APT - SummaryProposed apartment offer

PENTHOUSE SELLING OPTION

223 sm - US$ 55,750,000

APARTMENT SELLING OPTION

111 sm - US$ 144,300,000

PROJECTED SELLING PRICE PER SQM

US$ 10,000



RESIDENTIAL APT - SummaryPotential total income

Potential income $200,000,000from the RA pY



1. MONGOLIA

2. REAL ESTATE

3. THE TEAM

4. THE SITE

5. AMBITION

6. STRATEGY

7. VISION/CONCEPT

8. PRE-STUDY

9. COST

10. OFFER

8

TOPICS


2 SERVICED APPARTMENT MARKET

SROUCE: MAD PropertiesMongolian Properties


Immigration Authority

figures indicate that the

total number of foreign

workers resident in

Mongolia in 2012 was

27.000 and so this is

taken to be our

benchmark.

14200

27323 27000

SERVICED APT – FOREIGN RESIDENTS


The numbers of foreign

investors, professionals

and employees in the

mining supply and

financial sectors will be

increasing to fill the gap

and quickly surpass

numbers of expats

presently in Mongolia on

mining projects.

2295

5778

1917 1890

12.393

486

2241

2012


SERVICED APT – FOREIGN RESIDENTS


Expatriates in the Senior

Executive category are

usually on longer-term

contracts and will usually

remain in Mongolia for

two or more years.

For this reason they often

travel with family

members, therefore

requiring larger, family

friendly accommodation.


SERVICED APT – RENTAL MARKET SEGMENTS


The rental markets in the

upper end of the

residential market

continuing to show

robust demand and

rental prices rising

annually.85 89 96 106

28

143 165

47

10

1

5222


SERVICED APT – SA SUPPLY


52 serviced apartments as

part of phase 1 of the

Shangri-La project coming

online in 2014 and MAK

Group also just announced

their MAK Tower project

would include a stock of 22

serviced apartments as part

of the Hyatt Regency hotel

that is currently on hold.

70

25

95


SERVICED APT – SA SUPPLY


Representatives of various famous companies have been visiting Mongolia

numerous times in recent years in search of partner developers with whom

to construct dedicated serviced apartment facilities. However, a majority of

developers have not been able to meet the exact standards of these

international serviced apartment operators.


SERVICED APT – SOME FAILURE


The ability to rent an

apartment on a short

term basis (nightly to

weekly) is only

systematically offered by a

limited number of agents

and management

companies in Ulaanbaatar.

The pricing structure of serviced apartment stocks in Ulaanbaatar


SOURCE: M.A.D.

SERVICED APT – SA COMPANIES


The serviced apartment market in Ulaanbaatar still remains in its

growing stages. During the past six years a number of companies and

facilities have entered into the serviced apartment markets. These

have been largely tentative and the city still lacks a full-scale serviced

apartment facility that will meet the exacting demands of the business

sector.


SERVICED APT – SA MARKET GROWTH

This chart shows the forecasted

appreciation of per square meter

rental prices in the mid and

luxury residential market in

central Ulaanbaatar out to 2018.


SERVICED APT – FORECAST


SERVICED APT - SummaryProposed potential target population


27.000Residents pY 2012

2.700Residents pY

225Residents pM

Foreign Residents in Ulaanbaatar

2.6 YAvg duration of stay

60Max Month

3Min Month

Duration of stay



SERVICED APT - SummaryProposed potential target population


52APTNew supply in 2014

143APTSA 2013

28APTSA 2012

Current Apartment supply


2000-7000PER MONTH IN USD

Rental price range

150-300PER DAY IN USD


SERVICED APT - Summary

192 APTTotal pot. rentable apt

17.760 smTotal pot. rentable area

TOTAL 16FTotal pot. rentable floors

130 sm100 sm

80 sm60 sm

370 smPer Floor

3 APT3 APT3 APT3 APT

12 APTPer Floor

2 BR luxury1-2 BR studio

2 BR studio1 BR studio

390 sm300 sm240 sm180 sm

1.110 smPer Floor


Proposed apartment capacity



$504.000Potential Income pM

$5.000.000Potential Annual NOI

10 %Vacancy rate pM


SERVICED APT - SummaryPotential NOI per Annum

130 sm

100 sm

80 sm

60 sm

3 APT

3 APT

3 APT

3 APT

$5000 pM/pA*$3000 pM/pA*$1500 pM/pA*$1000 pM/pA*

2 BR luxury1-2 BR studio

2 BR studio1 BR studio

* Weekly and per night rent fee could be offered as well.

$15.000 pM/pF

$9000 pM/pF

$4500 pM/pF

$3000 pM/pF

$31.500 pM/pF




SERVICED APT - SummaryPotential total income

Potential income $5,700,000from the SA pY




SERVICED APT - SummarySelected management company


1. MONGOLIA

2. REAL ESTATE

3. THE TEAM

4. THE SITE

5. AMBITION

6. STRATEGY

7. VISION/CONCEPT

8. PRE-STUDY

9. COST

10. OFFER

8

TOPICS


3 HOTEL MARKET

SROUCE: MAD Properties CBRE | Hotels


The inbound tourism decreased by 12.8% in the

first 10 months of 2013 compared to the same

period of the previous year. Tourists visiting

Mongolia reached 366,000


HOTEL MARKET – 2013 INBOUND TOURIST


In 2012 numbers of visitors grew dramatically across all sectors of the hotel markets. Across all accommodation types numbers of visitors rose by 24%, while at the upper end of the market they rose by 32% over figures for the same period of 2011.

224.693

72.937

13.242

208.080

12.950

104.557

26.866

138.953

239.824


HOTEL MARKET – DEMAND DRIVERS


Additional Intl. flights:

1. Turkish Airlines is

flying between

Ulaanbaatar and

Istanbul via Bishkek

since 2012

2. Hunnu Airlines is

operating intl. routes

including Hong Kong,

Shanghai and

Thailand

1.202.476

218.016

156.837

124.971




The numbers of tourists

dropped sharply in 2010

compared to 2009

figures, as a result of the

global downturn. In 2011

a slightly recovery could

be seen with over four

hundred thousand

inbound tourists

recorded into Mongolia.

446.446

492.836

456.090

460.360




Around 43.4% of all foreign

tourists entering Mongolia

in 2011 were from China.

The U.S. tourists account

for just 3.4% of the total,

while tourists from Europe

represent just over 5%.

Russia, Japan, Kazakhstan

and the Republic of Korea

make up 36.9%.

CHINA200.010 (43.4%)

KOREA43.994 (9.6%)

USA15.423 (3.4%)

OTHER40.270 (8.7%)

JAPAN14.988 (3.3%)

RUSSIA102.738 (22.3%)

KAZAKHSTAN7973 (1.7%)

UK7120 (1.5%)




The reported net income of the tourism sector in 2010.

$222.000.000



POTENTIAL INCOME FROM TOURISM SECTOR

$6.660.000

POTENTIAL TARGET

3%


20

10

$3.2 Million

+HOTEL

20

09

94% more than

20

08

$4.4 Million



1

2


The tourism and hospitality industry in Mongolia will continue

upward growth between 2012 and 2015.

The two Indications will be:

The changing demographic focus of the tourism industry of the

country and increasing presence of internationally recognized

brands in the hospitality sector.

The international media interest, which in turn is increasing the

numbers of investors and international company

representatives traveling into Ulaanbaatar.




Among high-end hotels

occupancy may fall as low

as 24 – 27% during the

winter months, rising as

high as 75% during the

mid-summer season.26

26

48

51

53

67

7275

64

44

27

24


HOTEL MARKET – OCCUPANCY REPORT


The occupancy rates in the high-end of

the market 4 Star and higher are

observed at around

65%


HOTEL MARKET – OCCUPANCY RATE




70%

The top performing hotels in terms of occupancy:1. Kempinski Khaan Palace,2. Corporate Hotel,3. Blue Sky (competing for this title)

Average occupancy recorded:1. Kempinski Khaan Palace,2. Corporate Hotel,3. Ramada Hotel


Occupancy rates in the

capital do tend to be

higher, particularly within

4 Star+ facilities.

34

28

36

24

44





HOTEL MARKET – AVG LENGTH OF STAY

AVERAGE DURATION OF STAY IN ULAANBAATAR

4 STAR OR UP HOTELS - 2012

04-14 DAYS


Hotel markets in Ulaanbaatar

indicate that there are

presently 37 hotels of between

domestic 3 Star – 5 Star

standard in and around

Ulaanbaatar alone.

3%

35

25

33

34


HOTEL MARKET – HOTEL SUPPLY


14% of the current supply

falls within the domestic 5

Star classification.

306

1034

823




5 Star hotels currently in the

market contain on average 168

rooms.

The ratio of beds available in

Ulaanbaatar by star rating will

shift dramatically up until 2017

as a result of new supply

coming onto the market. It is

estimated that 1,235 new

rooms projected until 2017.

1087

1197

1034




MU LLC land is located in

Sukhbaatar district. Thus

we have only taken into

account this district for

the review401

55 61

725

200

261

398




Out of 37 hotels that exist in Ulaanbaatar today classified as 3 Star

or above, we have selected 7 in order to deliver little more about

potential competitive environment. These are listed below:

1. Ulaanbaatar Hotel

2. Bayangol Hotel

3. Blue Sky Hotel

4. Kempinski Khan Palace

5. The Corporate Hotel and Corporate Hotel Nukht

6. Terelj Hotel

7. Ramada Hotel


HOTEL MARKET – CURRENT HOTELS


Ulaanbaatar Hotel

- Doors opened first time in 1961.- Previously Government owned - now a public listed company on the MSE.- Domestic 5 Star (Intl. 4 Star rating)- Reopened in 2006 after renovating 106 new refurbished rooms in over 6 floors. - 4 restaurants with a total capacity of 610 person- Function facilities including a 720 sm main hall (400 person dining)- 320 sm of meeting rooms- 90 external parking spaces available in front of the building- Business facilities for 240 people and few small retail spaces. - Employs around 95 staff at a time. - Total GFA of 13,800 sm- Per night prices for the lowest priced room began at US$120 in 2012- Occupancy rates now peak at around 75% during the course of the year.




Bayangol Hotel

- Opened in 1964 was the second large-scale hotel in Ulaanbaatar at the time- Privatized and is currently listed on the MSE- Domestic 4 Star (Intl. 3 Star rating) - Located to the south of the current CBD, along Chinggis Avenue- The GFA of 16,200 sm and consists of two towers, each 12 floors in height- Total current room 215- 65 parking spaces (all open-air) in front of the hotel- Contains 6 restaurants, a bar and wine house catering- Exhibition room for up to 80 persons, as well as a business centre. - Employs around 155 staff at a time- Occupancy rate across the year of around 65%.




Blue Sky Hotel

- The Blue Sky Hotel was completed in 2011- Opposite of Sukhbaatar Square and offers international 4 Star- Contains 200 rooms, including 33 suites- 4 restaurants, alongside a lounge bar on the 23rd floor of the building- Cuisine from Japanese to French and European - One grand ballroom and five banquet halls (490 PAX for dining) - 700 persons with theatre style seating- A member of Preferred Hotels group- Moved away from a partnership with Intercontinental Hotels- Primarily serves international business travelers- Occupancy rates above 70%




Kempinski Khan Palace

- Operated by Tavan Bogd Group and managed by Kempinski- Doors are opened in 2005 under its present management structure- First hotel under international management to enter the Mongolian market - International 4 Star hotel- Serves to high end tourists and business travelers since operation begin - Minimum price per room per night was US$110 in 2012 - 5,000 sm of GFA with 102 rooms across 9 levels - Kempinski establishments may not be available here- 4 restaurants with seats a combined 90 - 110 persons- 45 dedicated parking spaces (outdoor)- 3 conference rooms with seats up to 260 persons- 160 staff annually - Location of this hotel is over 2 km east of Sukhbaatar Square- Occupancy remains high, above 65%




The Corporate Hotel

- Opened in 2007 and domestically owned and run- 11 storeys with the location close to Bayangol hotel- Contains 55 rooms - With GFA of over 5,000 sm - low season rates are US$ 110 per room-night- Mid- to high- end bracket for business and tourist travelers- Restaurant with seating of 80-100 persons - Only 8 exterior parking spaces and 5 underground parking spaces- Conference facilities seat a maximum of 40 person




Corporate Hotel at Nukht

- This hotel contains a total of 12 rooms- Rates are from US$300 to US$1,500- The facility boasts an exquisite location within the Nukht Valley - Innovative features such as a geo-thermal heating system- Spa facilities include a sauna and Jacuzzi, a fitness center, indoor heated swimming

pool, outdoor play areas and sporting courts

A third Corporate Hotel opened its doors in 2013. Situated next to the Mongolian Chamber of Industry and Commerce building in the Khan-Uul district of Ulaanbaatar, this new facility will contain 162 rooms in the upper- end of the domestic market, as well as conferencing facilities.




Terelj Hotel

Not strictly situated within Ulaanbaatar, situated around an hour’s drive east of Ulaanbaatar. Constructed by a Korean construction firm, this hotel, firmly placed within the high end of the domestic market, remains a favorite summer retreat among domestic clientele.

- 52 rooms - Rates start from 225,000 MNT for executive room during the low season- Presidential Suite with the rate of 4.875 million MNT during the high season- Located in Terelj national park - Facilities include a spa, swimming pool, fitness center, restaurants, cafes, several

lounges and a meeting hall- Banqueting facilities as well as business facilities for over 200 persons




Ramada Hotel

- Second newest entrant to the Ulaanbaatar Hotel market- Opened in 2011 - Features 128 rooms across 11 levels - Total GFA of the hotel is 6,600 sm - Lobby bar/restaurant as well as a sky lounge - 50-60 exterior parking spaces and limited underground parking- Focusing on high-end tourists and business travelers- Standard 4 Star hotel

Heavy traffic along Peace Avenue makes this location less than convenient for business travelers seeking swift access to the CBD.




Between 2013 and 2017 an average of

247 new hotel rooms will be coming

online each year, with 415 entering the

market in 2013 alone.

A number of hotels are also planning

renovations and expansions, including:

-196 room Chinggis Khan Hotel,

-215 room Bayangol Hotel,

-106 room Ulaanbaatar Hotel


HOTEL MARKET – FUTURE SUPPLY


New supply of over 1,235

rooms will increase the

market by an impressive 54%.

The majority of these new

rooms will be of international

4 Star standard or above, and

will mostly be clustered to

the south of Ulaanbaatar’s

Central Business District,

within Sukhbaatar District.

415

261

398

161


HOTEL MARKET – FUTURE SUPPLY


At present the 5 Star

market is limited to

Bayangol, Bayanzurkh and

Sukhbaatar districts, with

just:

-Ulaanbaatar Hotel,

-Blue Sky Hotel,

-Ramada Hotel

-Corporate Hotel

-Kempinski Khan Palace

From$120

To$180

From$154

To$667

From$113

To$777


HOTEL MARKET – ROOM RATES


Given the small size of

Ulaanbaatar’s market and

the upcoming challenges of

oversupply , CBRE|Hotels

suggests a slightly smaller

scale hotel of 5 star (upper

up-scale) standard for,

amongst others for three

reasons:

Please read on the next page


GAP-A in the market

GA

P-B

in th

e market

350

325

300

275

250

225

200

175

150

125

100

75

50

25

00 Mid-scale Upper Mid-scale Up-scale Upper Up-scale Luxury

PROPOSED POSITIONING OF HOTEL by CBRE|Hotels

Bayangol

Ulaanbaatar

Chinggis Khaan

Ramada

Corporate

Hyatt Regency

Best Western

Radisson Blue

Sunjin Grand

Kempinski Khaan

Sheraton

Shangri-La

Hilton

Blue Sky ProposedHotel

HOTEL MARKET – POSITIONING


3PRODUCT DIFFERENTIATION

2INVESTMENT

1MARKET

Ensure relatively high and sustainable level of occupancy in this competitive market

Such a hotel will require less investment than a large scale hotel with the same or similar standard and may generate higher returns

A hotel as suggested can occupy a unique space in the market, differentiating itself from the potential competition


HOTEL MARKET – POSITIONING



1. UNIQUE & TRENDY

2. HIP & COOL

3. DESIGN ORIENTED &

HI-TECH

4. PERSONALIZED

SERVICE

5. EXCLUSIVE EXPIRIENCE

1. Willing to pay a premium for experience and lifestyle

2. Trend seekers who seeks out COOL and HIP environments. They might be attracted by exclusive clubs/bars and interested in the COOL factor

3. Unique in design, amenities and cuisine to reflect the local culture, featuring locally-inspired murals ,music, scent and menu items but all of international standard

4. A feeling of staying at home and served by attentive and professionally trained staff

5. Guests who stay in a hotel as a part of their travel experience or treat the hotel as a distinctive destination

HOTEL MARKET – CUSTOMER BEHAVIOUR

GROUP TOURS:


LEISURE FIT:Free Independent Traveler

MICE:Meetings, Incentives, Conferences, Exhibitions

CORPORATE: The major demand will be generated by corporate travelers who will usually pay a higher room rate and are more sensitive to location and service quality; CBRE estimates around 70-75% of such business will originate from such sector.

As a “lifestyle” hotel is more focused on personalized service and unique experiences CBRE expects MICE demand for the rooms will only be around 10-15% of the total, although the meetings and conferences themselves may generate independent business for the F&B facilities.

There will be some demand from Leisure FIT guests owing to the hotel’s central location being easily accessible to offices, commercial areas, exhibition centers and the airport as a place of interest: CBRE has estimated such demand at 8-10% of the total.

Typically leisure groups are the most price-sensitive amongst all segments of demand. However the increasing number of high-end and small scale tour groups traveling for experience may become a potential market for the proposed hotel; CBRE has estimates such demand at 5-7% of the total.

HOTEL MARKET – MARKET SEGMENTATION

by DEMAND




112105114

44

137

250

203

216

HOTEL MARKET – BENCHMARKING



HOTEL MARKET – BENCHMARKING

112

100

7564

134

179

195


HOTEL MARKET - SummarySuggested Room Mix by CBRE | Hotels

185Total rooms

19.500Total GFA in sm

18Total floors


GUESTROOMS ROOM # ROOM SIZE/SM % OF ROOMS

Standard Twin Room 65 42 35%

Standard King Room 86 42 46%

Executive Rooms 25 42 14%

Suite 8 84 4%

Presidential Suite 1 168 1%

1118Per floor in sm

The information provided in this presentation are all taken from the research conducted by CBRE|Hotels according to our request. Further research will be done with CBRE|Hotels in the future.The information are subject to change without any prior notice.


HOTEL MARKET - SummarySuggested F&B Areas by CBRE | Hotels


F&B OUTLETS SEATS # AREAS/SEATS NET AREA/SM

All day dining/Coffee Shop 120 2.0 240

Western/Asian Restaurants 60 3.0 180

Specialty restaurants (x2) 110 4.0 400

Lobby Lounge 30 2.0 60

Bar (x2) 40 4.0 160

TOTAL / AVERAGE 360 2.89 1.040

185Total rooms


18Total floors

1118Per floor in sm



HOTEL MARKET - SummarySuggested Banquet & Meeting Facility by CBRE|Hotels


MEETING & FUNCTION AREAS NO. AREAS/ROM/SM NET AREA/SM

Ballroom (Sub dividable) 1 600 600

Meeting rooms (6) 6 80 480

Pre-function space 216

Business center 1 50 50

TOTAL / AVERAGE 1.346

185Total rooms


18Total floors

1118Per floor in sm



HOTEL MARKET - SummaryOther Facilities suggested by CBRE | Hotels

185Total rooms


18Total floors


OTHER PUBLIC AREAS NO. AREA/SM NET AREA/SM

Fitness (incl. swimming pool) 1 500 500

Spa & Health Center 6 20 120

Reception area 1 80 80

Games room / other 3 42 126

Retail Outlets (Lobby Shops) 1 30 30

Total 856

1118Per floor in sm



HOTEL MARKET - SummaryPrice by CBRE | Hotels


185Total rooms


18Total floors

1118Per floor in sm

$308.372TOTAL DEV COST PER ROOM

Per CBRE|Hotels suggestion this cost calculation needs to be verified by a reputable QS company



HOTEL MARKET - SummarySelected Hotel


Advanced discussions have been in process with the hotel

185Total rooms


18Total floors

1118Per floor in sm



1. MONGOLIA

2. REAL ESTATE

3. THE TEAM

4. THE SITE

5. AMBITION

6. STRATEGY

7. VISION/CONCEPT

8. PRE-STUDY

9. COST

10. OFFER

8

TOPICS


4 OFFICE MARKET



As the transition to democracy and a liberal economy got

underway in Mongolia, new offices began to spring up

around the capital. The first office spaces in the city were

located in converted apartments situated along the city’s

main thoroughfares.


OFFICE MARKET – 1991 AND NOW


In most jurisdictions ceiling height indicates something of the

quality of a property and the market intended by developers.

Ceiling heights in Ulaanbaatar offices typically range from 2.1m

to 3.5m.

Average ceiling heights across a cross-section of selected A and B

grade offices was calculated as


2.8m

OFFICE MARKET – SEILINGS HEIGHT


Elevator services are a

defining technical feature

of office classifications.

International classificatory

schemes dictate that in A

grade office space the

available lifts must be

capable of servicing 15%

of the average human

capacity of the building at

any time.

6 6 6

22 2 2 2 2

3 3

Elevators count in various office buildings in Ulaanbaatar city


OFFICE MARKET – ELEVATORS


In terms of amenities the majority of Ulaanbaatar’s stock of office

space falls well below A grade status. Facilities such as raised floors

for cabling, suspended ceilings, intelligent climate control, carbon

neutral status and one-way transparency windows are not

standard features in the upper end of the market.


OFFICE MARKET – AMENITIES


Across Ulaanbaatar

parking is at a premium.

Most offices across the

city have extremely

limited indoor and off-

street parking available to

its tenants. Removal of

parking spaces on roads

around the city as part of

traffic calming measures

has worsen the problem

further.

66

35

75

33

23

19

26

12

44

30

18

16

80

40

620

88

30

18 16

33 33


OFFICE MARKET – PARKING SPACES


Floor area is another

determinant of A grade

status.

Internationally, office

buildings which fall below

a certain floor-plate size

are not considered grade

A facilities.

For a building to be

classed as A grade it

should have a floor plate

of over 1,000 sm size.

2000

1200

840

828

640

600

600

450

895

1200

1454


OFFICE MARKET – GROSS FLOOR AREA



OFFICE MARKET – DEMAND

1564

509280%

Financial services establishments in 2012 and active

1262 Financial services establishments in 2011 and active

Total registered companies and active

Responsible for the national GDP


The majority of companies

operating within these

facilities were either

mining companies or part

of the mining supply

chain. A further 9% were

operative directly to the

financial services sector,

whilst 11% were involved

in trading and logistics.

2%1%7%

6%

11%

9%

52%

12%


OFFICE MARKET – TENANT MIX


In 2011, concerns were

raised about oversupply in

the office market.

However by 2012 it

became all but impossible

to find office space in

Ulaanbaatar. All but a few

offices reported nearly

100% occupancy, with

limited space for sale or

rent.

42300

28800

17700

14275

25000

18700

24700

20250


OFFICE MARKET – SUPPLY VS UPTAKE


The observations indicate

a total A, B and C grade

office supply in

Ulaanbaatar as of 2012

are at just over 410,000

sm, with over 184,100 sm

already in the pipeline and

projected to come online

by 2017.

42300

17691

16151

3114024947

54500

24700

PRELIMINARY MARKET STUDYSq

uar

e m

eter

OFFICE MARKET – SUPPLY BY GRADE


Central Tower

• Completed in 2010 as a joint venture by MCS and Shangri-La (Shangri-La Ulaanbaatar Ltd)

• Only true A grade office facility with 30,000 sm of office (4-16 floors)

• Floor plate plan for each office covers 1,700 square meters (NFA) with 85% space efficiency

• 6 KONE lifts have been installed / 1 service elevator is also in place

• 81 underground parking spaces available

• Monthly parking charges 260,000 MNT pM / weekday for 350,000 MNT for 24/h parking

• The entire building is air cooled through a central air-conditioning system

• 0.15m raised floors / 2.9m ceilings

• The minimum lease period for office is two years with minimum rental size of 110 sm

• During Q3 of 2012 the office space therein was at 100% occupancy

• Typical asking rent per square meter per month is US$ 60, plus VAT incl. all management fees

• Standard handover condition is with fine decoration included


OFFICE MARKET – CURRENT OFFICES


Monnis Tower

• Monnis Tower was completed by Monnis Properties in 2009

• Total of 15,050 square meters of office space over 13 floors

• 3 SIGMA lifts and one service elevator

• Floor-plate of this development is 828 square meters (GFA)

• Does not offer raised floors but does provide a light and spacious working environment

• 3.1m tall ceilings and a central air conditioning system

• 27 underground parking spaces with a very limited on-street parking spaces

• Parking charges typically rise to around 250,000 pM

• In Q3 of 2012 occupancy stood at 100%

• Rent price is around US$ 45 to US$ 55 per square meter pM plus VAT.

• Management fee of US$ 4 per square meter is charged on top monthly rent

• Minimum lease period is between 1-3 years and the minimum leasable space is 30 sm




Blue Sky Tower

• One of the latest entrants to the upper end of the market in Ulaanbaatar, Blue Sky Tower was

completed in 2011

• Total of 9,947 square meters of office space, spread across 5 floors in this mixed use development

• Contains leisure facilities, two floors of food and beverage facilities and a large, international

standard, domestically run hotel

• Situated directly opposite Sukhbaatar Square, a prime location

• Despite the fact that the 9,947 sm of office space in this building was initially slow to rent

• Per square meter prices well above US$ 50 even during 2011, reaching as high as US$ 90

(reported) per sm per month in late 2012.

• The most expensive office space in the city

• Bloomberg TV Mongolia now bases their operations




International Commerce Centre

• In early 2012 the ICC project found renewed funding from the Mongolian International Capital

Company (MICC) a 10 million Euro loan

• Situated in downtown Ulaanbaatar within a few hundred meters both Central Tower and Blue

Sky Tower

• Development just opened its door in 2013

• Will contain two separate underground parking lots

• A large lobby with a small commercial area dedicated to food and beverage

• Potentially high end retail anchor stores, office space and conference rooms

• The top floor of this 21 story building will contain an upscale lounge bar

• ID transponder systems for staff and smart car-park management

• ICC will contain 18 floors of office space




Mongolia, with its pipeline

supply of 44% of existing

office stock, will certainly

be a contender among the

world’s fastest growing

office markets if demand

holds and favorable

economic conditions

allow.


OFFICE MARKET – FUTURE SUPPLY


International Finance Centre

The IFC will have a GFA of 45,000 sm covering a footprint of 3,772 square meters in a prime location

along Chinggis Avenue, in the heart of Ulaanbaatar’s business district. In terms of office space it is

expected that it will contain 20 out of an initially proposed 24 floors of office space. However, it is

expected that plans for this building may be amended to make it the tallest building in Ulaanbaatar

by the time of its completion, tipping above the 26 levels of Shangri-La. Situated just opposite the

current Monnis Tower, this commercial property is expected to be a key A Grade office facility within

the Ulaanbaatar market. The project has yet to initiate full construction and is expected to come

online during 2015.

This development has already seen considerable delays. With construction expected to begin in

2011, the only movement at the construction site to date has been the embedding of pylons. The

developer spent some of 2013 seeking renewed international financing for the project and expected

to begin construction in during 2013.




GS Tower

Situated in a prime location along Chinggis avenue (Sukhbaatar district), GS Tower is the flagship

commercial construction of developer “German Standard”. This commercial project contains over

7,100 square meters of office space. Purported use of German engineering techniques has led

significant interest in this building, although the building’s lack of parking spaces – with only 10

indoor parking spaces available – reduce the attractiveness of it as a commercial location. It is

reported that the developer has approached neighboring buildings asking to purchase indoor

parking spaces therein in order to offer them to prospective tenants.




Out of 87 office facilities

across Ulaanbaatar the

following average rates

were calculated. Highest

rents are achieved within

Sukhbaatar district. The

CBD itself (within around

150-200 m radius).


OFFICE MARKET – RENT PRICE


At US$ 57 per square

meter per month the

city’s majority stock of A

grade is renting in 2012 at

a full 21% higher than in

2011.


31USD

57USD

29USD

22USD

25USD

21USD

OFFICE MARKET – RENT PRICE


Transaction rates of office space accelerated upward again in

2012. With per square meter purchase prices for A grade retail

surpassing the US$5,500 mark.


OFFICE MARKET – PURCHASE PRICE



OFFICE MARKET – BENCHMARKING

$20674

$19600

$9010$8136

$5000$4500

$2500

$20000

$16000

$8205

$7200

$2700$3500

$1944



OFFICE MARKET – BENCHMARKING

$13389

$11250

$4500

$1800$1900$1000

$12794

$11000

$3500

$1750$1269

$950


OFFICE MARKET - SummaryPotential office space calculation


16770Total GFA in sm

15Total floors

1118NFA in sm

AGRADE

OFFICE FLOOR DATA

0.15Raised floor (m)

840Parking spaces

4.35Ceilings (m)

Amenities suitable for an A grade office

OFFICE AMENITIES



OFFICE MARKET - SummaryPotential office space calculation


$55-$60Target rent price pSM/pM

$5500Target sell price pSM

50%Selling space

PRICE RANGE FOR RENT AND SELL

8385 smTotal square meter for rent

RENT AND SELL SQUARE METER

8385 sm50% square meter for sell



OFFICE MARKET - SummaryPotential rent and sale forecast


$900,000Monthly potential rental income

including vacancy rate of 10%

$4,800,000Annual potential rental incomeincluding vacancy rate of 10%

RENT - OPTION

8385 smWe have the potential to sell the

50% of the total office space

$46.000.000Potential total income from

50% office space

SELL - OPTION



OFFICE MARKET - SummaryPotential total income


Potential income $50,000,000from the office pY



1. MONGOLIA

2. REAL ESTATE

3. THE TEAM

4. THE SITE

5. AMBITION

6. STRATEGY

7. VISION/CONCEPT

8. PRE-STUDY

9. COST

10. OFFER

8

TOPICS


5 COMMERCIAL MARKET


The retail sector in Ulaanbaatar has transformed

dramatically in the transition from a centrally planned to

a liberal economy. Prior to the 1990s all private trade

was prohibited.

During the 1980s semi-legal exchange sites grew up on

the outskirts of provincial capital and other large cities.



COMMERCIAL – PRE HISTORY



COMMERCIAL – B-GRADE SALES PRICE

TODAY



http://goo.gl/sQOiW

COMMERCIAL – GLOBAL RETAIL

Market average sales prices for new and existing B-grade

retail space peaked in 2012 at around US$3,500-

US$4,500 pSM based upon reported transactions.



COMMERCIAL – AVERAGE SALES PRICE

The selling prices are expected to rise above the

US$5,000 mark for space in new retail constructions as

we come into 2014.



COMMERCIAL – FUTURE SUPPLY

Example: The new market entrants Peace Tower (B-

grade) selling retail spaces are at up to US$6,000 pSM

for prime locations on street-accessible floors.



COMMERCIAL – PEACE TOWER

Studies of trade mix for existing high-end retail projects in

Ulaanbaatar shows below listing:

- 19% to supermarket,

- 8% to food and beverage,

- 1% to entertainment facilities and

- 72% to retail.



COMMERCIAL – ZONING PRACTICES

NOTE: Entertainment facilities remain scarce and F&B facilities

are only occasionally well organized into dedicated food

courts and dining areas (MCS Central Tower and Blue Sky

Tower).



COMMERCIAL – RENTAL BASKET

The table below indicates the spread of prices per square meter across 17 retails stores and shopping centers in Ulaanbaatar, ranging from A to C grade.


PRELIMINARY MARKET STUDYsqm

The upper end of the market

(A and B grade space) saw

reasonably limited growth in

2012 as the market gears up

to see a dramatic jump in

new retail space completed

during 2014 with new

entrants including the IFC

and flagship Shangri-La

project.

COMMERCIAL – SUPPLY vs. UPTAKE

CENTRAL TOWER

• Situated on the south-eastern corner of Sukhbaatar Square

• Completed in 2010, this 17 floor development houses 3 floors of retail space and a further one floor of

entertainment space at the top of the building

• The net retail GFA is 6,700 square meters and exclusively targets the high end of the market

• Brands: Louis Vuitton, Apple, L’Occitane, Goyo Cashmere, Esprit, Emporio Armani, Omega, Hugo Boss, Burberry,

Swarovski, Ermenegildo Zegna, Montblanc, Vertu and many more

• MCS operate on a profit sharing agreement with the management firm

• In 2012 price for rent varied from around 90,000 MNT pSM pM

• Price for rent on the 3rd floor vary from 63,000 MNT pSM pM

• The third floor is reserved for dining and contains a coffee shop, as well as five restaurants catering everything from

Korean to American food

• Around 75% of total floor space is given over to retail with 22% allocated to food and beverage

• In late 2012 occupancy was around 95%



COMMERCIAL - BENCHMARKING




180

132123

98

4845

30



316

168140

6448

2521



COMMERCIAL - SummaryPotential retail space


16,170Total GFA in sm

3Total floors

5390NFA in sm

AGRADE

RETAIL FLOOR DATA

TENANTS IN ADVANCED DISCUSSIONS




$60-$90Target rent price pSM/pM

$6000Target sell price pSM

50%Selling space

PRICE RANGE FOR RENT AND SELL

8000 sm50% square meter for rent

RENT AND SELL SQUARE METER

8000 sm50% square meter for sell


COMMERCIAL - SummaryPotential rental and selling ranges



$400.000Monthly potential rental income

including vacancy rate

$5.000.000Annual potential rental income

including vacancy rate

RENT – OPTION *

8000 smWe have the potential to sell the

50% of the total retail space

$48.000.000Potential total income from

50% retail space

SELL – OPTION *


* Vacancy rate of 10% has been calculated

COMMERCIAL - SummaryPotential income


COMMERCIAL - SummaryPotential total income


Potential income $53,000,000from the retail pY



1. MONGOLIA

2. REAL ESTATE

3. THE TEAM

4. THE SITE

5. AMBITION

6. STRATEGY

7. VISION/CONCEPT

8. PRE-STUDY

9. COST

10. OFFER

8

TOPICS


6 PARKING AND GARAGE MARKET

SROUCE: MAD Properties

Parking & Garage

Parking is already at a premium and any developer who produces large-scale

parking will certainly be able to sell spaces at a cost now approaching the

square meter prices for mid-end apartments in the city. Within high-end

developments heated parking spaces can sell for over US$ 30,000 each an

impressive US$ 1,740 per square meter. Rental of an inner-city parking space

is even more of an expense.

Central Tower presently offers parking during weekdays only for a monthly

fee of 260,000 MNT with overnight and weekend parking incurring extra

costs.



PARKING AND GARAGE

Average building GFA to

indoor and outdoor parking

available is around 173.5

square meters per parking

space. This certainly does not

meet A grade standards.

Aware of the problem,

developers are increasingly

seeking to offer greater

numbers of parking spaces in

forthcoming developments.

66

35

75

33

23

19

26

12

44

30

18

16

80

40

620

88

30

18 16

33 33



PARKING – PARKING SPACES



475

Presently 67% of all vehicles

registered in Mongolia are

registered in Ulaanbaatar.

This capital city’s share of the

total number of vehicles in

Mongolia has steadily grown

in the past two decades as

urban migration continues

and more cars are purchased

within the city centre.

PARKING – TOTAL SQM PARKING SPACES

Parking is already at a

premium and any developer

who produces large-scale

parking will certainly be able

to sell spaces at a cost now

approaching the square

meter prices for mid-end

apartments in the city.



209,791

312,542

102,751

PARKING – NUMBER OF VEHICLES


PARKING & GARAGE - SummaryPotential parking tech data


66|30%Possible parking spaces

PARKING SPACE OUTDOOR

From total of 3300sm only 30% could be used for parking lots.

820|4FPossible parking spaces

PARKING SPACE INDOOR

From total of 30800sm only 40% are used for indoor parking lots.

$200Monthly rent fee per garage

$30,000Purchase price per garage



PARKING & GARAGE - SummaryPotential parking space


66Possible parking spaces

PARKING SPACE OUTDOOR – RENT ONLY

RENT - US$ 158,000 pY



PARKING & GARAGE - SummaryPotential parking space




PARKING SPACE INDOOR - RENT

RENT - US$ 900,000 pY


PARKING SPACE INDOOR - SELL

SELL - US$ 12,000,000 pY


PARKING & GARAGE - SummaryPotential total income


Potential income $13,000,000from the garage pY



1. MONGOLIA

2. REAL ESTATE

3. THE TEAM

4. THE SITE

5. AMBITION

6. STRATEGY

7. VISION/CONCEPT

8. PRE-STUDY

9. COST

10. OFFER

8

TOPICS


7 OBSERVATION DECK

Astonishing panoramic view over the city and beyond could be offered to

incoming tourists and local community. The observation deck could house a

famous local restaurant and a small art gallery or a meeting room. There are

many options how to use the top floors.



OBSERVATION DECK


OBSERVATION DECK - SummaryPotential pricing strategy



10000 MNTEntrance fee for 6 PAX


2000 MNTEntrance fee for children

5000 MNTEntrance fee for adults





18,000AVG Tourist per year

FROM ADULTS

7000AVG children per year

FROM CHILDREN


US$ 57,000 pY

US$ 8,000 pY

OBSERVATION DECK - SummaryPotential income per year



Potential income $ 65,000from the OD pY


OBSERVATION DECK - SummaryPotential total income


1. MONGOLIA

2. REAL ESTATE

3. THE TEAM

4. THE SITE

5. AMBITION

6. STRATEGY

7. VISION/CONCEPT

8. PRE-STUDY

9. COST

10. OFFER

9

TOPICS


COST ESTIMATION


COST ESTIMATION – EXECUTIVE SUMMARY

RESIDENTIAL $ 200,000,000

OBSERVATION DECK $ 65,000

PARKING $ 13,000,000

OFFICE $ 50,000,000

SERVICED APARTMENTS $ 5,700,000

RETAIL $ 53,000,000



COST ESTIMATION – EXECUTIVE SUMMARY

$320,000,000TOTAL PROFORMA ANNUAL INCOME (excluding Hotel)

~~



1. MONGOLIA

2. REAL ESTATE

3. THE TEAM

4. THE SITE

5. AMBITION

6. STRATEGY

7. VISION/CONCEPT

8. PRE-STUDY

9. COST

10. OFFER

TOPICS

10


THE OFFER

Old paintings - city

This unique development would not only benefit our

company, but potential partner companies as investors,

our shareholders, the surrounding neighborhoods and

most of all our country.


THE OFFER

$187,000,000 USDTo invest approximate lump sum can be safely managed through our law firm which will be spent in stages according to the request from both side. We can offer company share as a take-a-serious partner. Shares are open for discussions.

INVESTMENT OPTION - 1

110,000 smTo build the whole tower with own fund according to the design we have selected. We will take care of the whole sale/management and pay back the invested fund as per agreed terms and conditions to funder or developer.

INVESTMENT OPTION - 2

THANK YOU FOR YOUR KIND ATTENTIONTHE PURPOSE OF THIS PRESENTATION IS FOR DISCUSSION ONLY!


Old paintings - city

Mongol Tower project in Mongolia - by Tom Tsogt

Real Estate

Transcript of Mongol Tower project in Mongolia - by Tom Tsogt