Having experienced the benefits of investing in Mongolia directly through his own property portfolio, Lee Cashell co-founded Asia Pacific Investment Partners (APIP) in 2001 to help other investors enter this emerging market. With a strong track record in property development, APIP conducts its Mongolian real estate agency operations through its subsidiary, Mongolian Properties, which has grown into one of the largest real estate agencies in Mongolia.

How did you get into the real estate industry?
I was working in HK as a venture capital and private equity fund manager when I met a woman, now my wife.  She is Mongolian and invited me to her country for a visit. While visiting her home and meeting her family, I bought 3 soviet-era apartments for just $10,000 each, renovated them and was renting them out to the UN for a 62% rental yield.  This seemed too good to be true, but it really wasn’t so we decided to stay and found the first real estate agency in Mongolia:  Mongolian Properties was born in 2001 and we haven’t looked back since!

From agency I moved into renovating apartments then to building them from scratch, and this has influenced the company's diversification and expansion in subsequent years.  We are now the largest vertically integrated luxury development company in the country.

What are some of your career highlights from your time in the industry?
Being the first westerner to trade shares on the Shenzhen stock exchange was pretty amazing.  I spoke some Chinese and had a crack team who were translating the news real time into English so I was right on the cutting edge in the trading pit...  

Founding Mongolia’s first real estate agency is obviously a highlight for me, as is the day we finished the development of the first large scale condominium complex in Mongolia, the Regency Residence.  Our next building, the Olympic Residence, is finishing soon and I can’t wait to move in!

What are the biggest issues currently facing the Mongolian market?
There are a few. The lack of mortgages within the property market in Mongolia makes affordability challenging.  The lack of financing for property developers in Mongolia means we rely heavily on pre-sales off plan - this can be quite stressful at times! The lack of a capital market for Mongolian companies seeking funds and the long, cold winters shorten the construction season to only 7 months a year.

How has the industry changed in the time you have been involved with it?
The industry has expanded hugely.  When I first came here, there was little competition but of course the growth of the Mongolian upper-middle class and the high yields on property investments has caused a lot of people to jump in too.  

What changes would you like to see over the next two to five years in the industry?
I believe Mongolia will return to the healthy growth that we saw in 2013 and 2014 and this will reinvigorate the property market.  Mongolia’s mineral deposits mean that in the long term it is perfectly positioned to fulfil demand from China.  Additionally, I feel that the stabilization of the economy will allow for good quality housing at a lower price point to cater to the growing population of Ulaanbaatar as those who had previously lived nomadically are drawn to the capital to take advantage of Mongolia’s development.

What advice do you have for people who are just starting out in similar careers?
Find a good mentor, get experience in different countries, and try to do as many different functional jobs within construction and property development as possible.  Don’t underestimate the power of sales and marketing in ensuring success.

What do you believe is a unique factor of doing business in your market?
Our entire approach to development and real estate is very design-led.  I believe that there isn’t any point making something unless you are going to make it beautiful.  I have worked with internationally renowned designers to create unique buildings and interiors.

What is your favourite holiday destination in Asia?
It gets down to -40 Degrees C in Mongolia, so anywhere warm right now would be ideal.  I have many happy memories of Bali, Phuket, Myanmar, Vietnam and Cambodia, but Tokyo holds a special place in my heart with its crazy energy, eclecticism, strong sense of personality, fantastic design and excellent cuisine.  

What’s your outlook for the next year?
Finally, after two long years, the economy is recovering and we are expecting the property market to perform well starting in September this year and then gaining strength going into 2018.

Where would your next purchase be?
Definitely Mongolia.  I missed the run-up in prices in Tokyo in preparation for the Olympics and similarly missed the price rises in Yangon in 2015.  Same goes for Manila in 2015.  But as the commodity price rally starts to come back, led by gold and copper, I can’t think of a better place than Mongolia.  Prices have fallen by as much as 50% and the currency has also fallen by 25% and yet the commodity export volumes have recently hit all time highs, signalling a robust turnaround which should strengthen the currency and put wind in the sails of property prices for years to come. Add on top of this the recent influx of foreign workers for the mining industry and I think we have a winner. Mongolia will probably be the fastest growing country in Asia this year, and yet is is still largely overlooked by the large institutional real estate investors. Finally the laws and tax regime here are fantastic for foreign investors when you look at them versus the rest of Asia.

More from Lee and Asia Pacific Investment Partners

Mongolian mining boom expected to drive Ulaanbaatar real estate sector

New frontiers in emerging property markets

Why you should invest in Mongolia