Jordan’s real estate boom, signalled by the upsurge of construction projects in 2005, continues to grow rapidly in 2006 – and has now spread from Amman to the shores of the Gulf of Aqaba. Local and Gulf-based investors are attracted to Jordan by its emerging property market, and many are channelling their money into the country as opposed to the more established regional markets, led by Dubai.

With a continued rise in investment, Jordan’s property market is being categorised by regional experts as “hot” – buoyed by Jordan’s efforts to attract even more investment.

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The investment drive has included the development of a large number of investor-friendly economic zones – including four public free zones, 17 private free zones, and a special economic zone in Aqaba. Commerce can be conducted in these zones without having to pay the usual excise fees and taxes.

Crisis? What crisis?

The instability of neighbouring countries might discourage western investors, but Arab money does not necessarily react in the same way – and the region’s political crises have helped stimulate continued interest in Jordan’s property market.

With Iraq still chronically unstable, huge volumes of business are conducted from Jordanian bases. The recent conflict in Lebanon – where Beirut had been returning to rude health – has had a negative impact on its economy and investments there look more risky.

Arab investors are looking for markets in which they can place their confidence, and investing in Jordan has become fashionable. Real estate developers based in Dubai, Bahrain, Kuwait, Saudi Arabia and Lebanon now all have addresses in Jordan, and this has attracted the attention of other keen property developers that are eager to tap into emerging real estate markets.

Jordan has not yet reached the stage of its Gulf neighbours, which, if anything, are beginning to struggle under the weight of too many shopping mall developments. “In the Levant [the region including Syria, Lebanon, and Jordan], the profile of most shopping malls still adheres to a basic pattern of meeting the regular needs of an ever-expanding population with most malls anchored by a hypermarket,” says Simon Thomson, principal of Middle East shopping centre specialist Retail International.

Breaking new ground

Property developers such as Beit Al Mal Saving and Investment for Housing are planning major urban projects that are to change this state of affairs – and with it the Amman cityscape.

Beit Al Mal’s Beitna City project in the capital envisages the type of mall that in the Gulf has proved to be a significant draw for tourists as well as residents.

“Mega Mall – 12 floors high – will be complete in seven months,” says Beit Al Mal executive William Halaseh.

The Beitna City project will link four of Amman’s hills with bridges containing restaurants and entertainment parks. The aim is to enhance domestic tourism, and it is looking to investors who want to establish businesses there. Shops and apartments will be leased and sold on a first-come-first-served basis. The residential complex will have six floors, each containing 18 apartments. A hospital and university, to be run by the private sector, are also planned.

Tower dominance

Four towers of corporate offices covering an area of 257,767 square metres (m2) will dominate the estimated $1.5bn Abdali Urban Regeneration Project, a major regeneration of a former military site creating a landscape that its backers promise will offer dramatic views of Amman’s surrounding hills while radically changing the capital’s profile.

A boulevard 370 metres long and 21 metres wide will run between the tower sectors with cafes, restaurants, shops and two piazzas.

An extension of the neighbouring Shmeisani area, Abdali will feature the Nablusi sector offering mid-rise office buildings covering 164,460m2. The Shmeisani area is one of Amman’s upmarket banking and residential zones The Central Marketplace development will create a modern mall in the heart of Abdali, covering 133,383m2.

In the capital’s Royal Metropolis mixed-use project, the residential Royal Village development will feature a shopping mall, while the project’s commercial component, known as Jordan Gate, will provide office units, a mall and Hilton International Hotel. A joint venture between Bahrain’s Gulf Finance House (GFH) and Kuwait Finance and Investment Company (KFIC), the 28,500m2 developments will cost $300m.

Another joint venture unveiled by GFH and KFIC is the Royal Resort and Spa on the shores of the Dead Sea. Covering an area of 125,000 cubic metres, the Royal Resort comprises a hotel with 300 ‘royal’ rooms, a business centre, a gym, restaurants and other facilities. The Spa will contain six two-bedroom treatment rooms. The project’s residential component envisages 100 villas in three categories.

Moving south to the shores of the Gulf of Aqaba, new commercial development opportunities are emerging in the Aqaba Special Economic Zone, which has been created to encourage investment in an area that is described as Jordan’s answer to Sharm El Sheikh in Egypt.

The Gulf of Aqaba is a nature reserve featuring spectacular coral reefs and is the location of several historical and cultural visitor attractions.

Aqaba Development Corporation (ADC) is involved in a project with International Investment Arabian Group (GAI) to build Al Qasabah City. GAI is a private Jordanian company involved in commerce, agriculture and housing. The city is expected to cost JD100m ($140m) and will cover an area of 285,000m2. About one-third of construction funding is being provided by ADC and the rest by GAI.

Aqaba boom

“The project is planned to be completed by the end of 2008, and it is currently in its final design stages,” says ADC/GAI spokesman Majdi Murad. The city will consist of 580 villas, a commercial centre, entertainment facilities, a fitness centre, a clinic and a small school. Mr Murad adds: “The villas will be sold to local and foreign investors, and it will be down to the buyer to lease it out as an investment. On the other hand, the commercial units will be for rent. Prices for all units will be declared upon 50% completion of the construction stage.”

The project has an important commercial facet: an agreement between ADC and Abu-Ghazaleh Consulting Company calls for the construction of the Aqaba Centre for Business north of the town. The JD10m project will involve the construction of ten buildings covering an area of 20,000m2. Several local architects, including the renowned Jafar Tukan, have been short-listed for the project. An architect is expected to be selected by the end of October.