Sales prices about to be set for the 10,000 apartments project in the 7th Khoroolol of Ulaanbaatar, Mongolia
This new 10,000 Apartments is aimed at providing permanent housing for 40 to 50 thousand Ulaanbaatar residents.
The project is set over a 210,000 sqm area in the 7th Khoroolol of Ulaanbaatar, this project is being promoted as the most eddicient way of decreasing pollution within the city
There are currently about 170,000 families living in what is commonly known as the “ger district” of Ulaanbaatar, it is of course impossible to currently rehouse all of those families but it is more logical to start from those ger areas closest to the city center. The Capital city of Mongolia has therefore allocated 20 billion MNT (about 17 million USD) to the construction of low income housing and infrastructure in the 7th micro-district as well as some smaller projects in 9th, 10th, 11th and 12th Khoroo’s of Sukhbaatar District.
1 - The complex undertakings for this 10,000 apartments project is set to start soon.
The project is due to break ground in May 2012and is set to be completed within 3 years
The first phase of the project involves the relocation of the current residents of the area, who first have to give a valuation to their properties which the government will then buy. It is planned that within the year 2011, a total of 854 units (5,000sqms out of the 21,000sqms allocated) will be completed along with the total infrastructure of water pipes, sewers, electricity and schools for the full project. Upon completion, it is thought that over 2,100 families will leave in the current space, 5 times more residents than are currently living in the area. The tender to relocate the residents of the remaining 16,000 square meters has already been launched and work on phase 2 of the project is set to start in 2012.
2 - How are the properties valued and their owners compensated?
The current provisions of the law in Mongolia are ill defined with regards to expropriating and relocating the populations of certain areas to redevelop it
Very few provisions are made to expropriate people from land or buildings unless they are deemed to be unsafe. The valuation of a property is clearly a complicated process, the landlords would of course place an extremely high value to their properties while the interest of the government and the developer is to pay as low levels of compensation as possible. It is currently proposed that the construction companies, in partnership with the government will assign an average value per square meter and then negotiate with landlords individually. This could of course be a long process as recently demonstrated with some road and bridge construction projects. As the proposed area is centered on the ger district of Ulaanbaatar and all those residents were given 70sqms of land for free, it is difficult for the government to pay high prices for something they gave away only a short while ago. Mongolian Citizens will therefore be offered a small cash price as well as a new apartment in the same location but this is already leading to disputes as not all plots of land have the same value and not all apartments will have the same value as well. During the construction period of the new buildings, the current residents will be relocated in a 300 single bedrooms building currently under construction. Each one of those apartments is between 27 to 35 sqms but it still needs to be decided if those apartments will be rented or if they will allow relocated residents to live there for free, of course the government would prefer if they found their own accommodation elsewhere.
3 - Prices within the 7th Khoroolol project will redefine the Ulaanbaatar real estate market
It is forbidden by law for the government or any entity to influence or control market prices beyond normal market proceedings
The project is set over a 210,000 sqm area in the 7th Khoroolol of Ulaanbaatar, this project is being promoted as the most eddicient way of decreasing pollution within the city
There are currently about 170,000 families living in what is commonly known as the “ger district” of Ulaanbaatar, it is of course impossible to currently rehouse all of those families but it is more logical to start from those ger areas closest to the city center. The Capital city of Mongolia has therefore allocated 20 billion MNT (about 17 million USD) to the construction of low income housing and infrastructure in the 7th micro-district as well as some smaller projects in 9th, 10th, 11th and 12th Khoroo’s of Sukhbaatar District.
1 - The complex undertakings for this 10,000 apartments project is set to start soon.
The project is due to break ground in May 2012and is set to be completed within 3 years
The first phase of the project involves the relocation of the current residents of the area, who first have to give a valuation to their properties which the government will then buy. It is planned that within the year 2011, a total of 854 units (5,000sqms out of the 21,000sqms allocated) will be completed along with the total infrastructure of water pipes, sewers, electricity and schools for the full project. Upon completion, it is thought that over 2,100 families will leave in the current space, 5 times more residents than are currently living in the area. The tender to relocate the residents of the remaining 16,000 square meters has already been launched and work on phase 2 of the project is set to start in 2012.
2 - How are the properties valued and their owners compensated?
The current provisions of the law in Mongolia are ill defined with regards to expropriating and relocating the populations of certain areas to redevelop it
Very few provisions are made to expropriate people from land or buildings unless they are deemed to be unsafe. The valuation of a property is clearly a complicated process, the landlords would of course place an extremely high value to their properties while the interest of the government and the developer is to pay as low levels of compensation as possible. It is currently proposed that the construction companies, in partnership with the government will assign an average value per square meter and then negotiate with landlords individually. This could of course be a long process as recently demonstrated with some road and bridge construction projects. As the proposed area is centered on the ger district of Ulaanbaatar and all those residents were given 70sqms of land for free, it is difficult for the government to pay high prices for something they gave away only a short while ago. Mongolian Citizens will therefore be offered a small cash price as well as a new apartment in the same location but this is already leading to disputes as not all plots of land have the same value and not all apartments will have the same value as well. During the construction period of the new buildings, the current residents will be relocated in a 300 single bedrooms building currently under construction. Each one of those apartments is between 27 to 35 sqms but it still needs to be decided if those apartments will be rented or if they will allow relocated residents to live there for free, of course the government would prefer if they found their own accommodation elsewhere.
3 - Prices within the 7th Khoroolol project will redefine the Ulaanbaatar real estate market
It is forbidden by law for the government or any entity to influence or control market prices beyond normal market proceedings
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