Late last year, an intriguing sales leaflet landed in the letterboxes of homes in Mid-Levels, home to cashed-up expatriate bankers.
The leaflet, advertising a new real-estate development named 'The Olympic Residence' in the Mongolian capital of Ulan Bator, featured shots of a lavishly decorated luxury apartment. It proclaimed the landlocked country bordering Russia and China a 'new investment frontier' for Hong Kong's property-obsessed investors.
As it turns out, the apartment complex in downtown Ulan Bator is only a hole in the ground with a fence surrounding it.
Lee Cashell, an American who lives in Ulan Bator and is developing the project, began marketing apartments in the Olympic to foreign investors in 2007. But because of a funding crunch, only the foundations have been laid so far. Another of the developer's Ulan Bator projects, a striking purple structure in the centre of town named the Regency Residence, also remains unfinished after sales began in 2005.
Cashell is one of several budding real estate barons whose dream of modernising the Mongolian capital's skyline with shiny new skyscrapers has not yet come true. Besides a shortage of finance, other obstacles for developers and investors include murky property ownership rules and a potential oversupply that could overhang any investment.
'I would say 90 per cent of property developments in Ulan Bator fail,' says Joachim Bertot, a real estate investment adviser who has lived in the city for eight years and helps run a company called Make-A-Difference Mongolia, which goes by the name MAD Mongolia.
