UB Park is on of the most exciting real estate investment funds to launch this year in Ulaanbaatar, Mongolia, it is focused on the purchase and subsequent rental of parking spaces in the congested capital city. The fund is Managed by M.A.D. Investment Solutions and marketed by Emerging Frontiers.
The closed ended fund aims to benefit from Ulaanbaatar’s solid market fundamentals with constrained supply and growing demand. To summaries, a few of the key fundamental are as follows:
- Growing urban population – according to the World Bank since 2000 the city’s built up area has expanded by 40% over the past year and the population has almost doubled.
- The supply of cars on the road is very large – UB has a staggering 250,000 cars for only 195,000 property titles putting great stress on the road infrastructure.
- The city was design on Soviet Concentric principles – the CDB, retails and political centre are all based in the centre meaning most economic and social activity takes place in a small area. This city was also designed for the general public and private car use was not accounted for when the city was first built; there are therefore very few parking spaces in the city centre.
- The population is still young – 59% of the total population is still under the age of 30 with a considerable proportion still under the age of 18. This in turn means there will be a lot more drivers on the road in future.
- The population’s income per capita is growing – with major project like Oyu Tolgoi and Tavan Tolgoi finally making progress the average income is certainly going to grow. In a country that has minus temperatures for eight months the car is an almost necessity for many that live here; rising income is likely to lead to more cars on the road.
Ulaanbaatar is at a tipping point and is likely to make the socio-economic jump all observers have been waiting for while watching this mineral rich country stride forward in its development. The aim of the UB Park fund is to launch to coincide with the countries vast growth potential. The fund will initially raise a first tranche of $500,000 (USD) to invest strategically within the city so as to maximise return on investment and minimise impact on market dynamics. The final total amount raise will be around $2 million.
UB Park will be managed by M.A.D. Investment Solutions in a dynamic fashion. “We are very pleased to launch UB Park at such a promising time in Ulaanbaatar’s development” said Christopher de Gruben MRICS, the Portfolio Manager. “We believe that our extensive experience dealing with both public and private investments in Mongolia, our dedicated team that live on the ground here in Ulaanbaatar and our careful selection process, is a recipe for success for many investors in today’s market.” Lawrence Lennon, Director of Real Estate added, “We have planned the operations and implementation of this fund for a great deal of time and feel this is the right time to launch”.
The equity capital is being raised over a period of 18 month through three capital events to allow for conservative capital deployment. In addition to taking advantage of constrained supply, the fund will take advantage of domestic growth divers such as potential future upscaling of FDI, a growing middle class and sustain urbanisation.
Investors should carefully consider the investment objectives, risks and charges of UB Park Investment Fund. This and other important information about the Fund is contained in the Investment Memorandum, which can be obtained by contacting M.A.D. Investment Solution at email@example.com. The prospectus should be read carefully before investing.