|Jordan - Opening the gate|
|Opening the gate Soon to be dominating the skyline on the Dead Sea road out of Amman, the Jordan Gate project will also be a sign of the increasing flow of capital into the kingdom from its Arab neighbors.
The twin tower Jordan Gate forms the centerpiece of a $1 billion property development in the district of Marj Al-Hamam.
With the adjoining Royal Village, the Gate forms the Royal Metropolis project, which will establish a gated residential community on a 470,000 m² site. It will also include a recreational center, a retail mall, a hotel and some commercial space. Providing the financing for this prestigious project is Bahrain’s Gulf Finance House (GFH), one of the leading Islamic investment banks in the Middle East. It is participating in the scheme via its wholly owned onshore banking subsidiary, Gulf Finance House Commercial Bank (GFHCB), which has been mandated to raise financing for the project.
It has also signed a Memorandum of Understanding (MoU) with one of Jordan’s leading financial institutions, Jordinvest, which will assist GFH and GFHCB in arranging and structuring financing for the Jordan Gate, the first phase of the Royal Metropolis project.
The foundation stone for the Gate was laid by His Majesty King Abdallah II in May this year, with work already well advanced on a 28,500m² site. The development will also likely be just the beginning for GFH in Jordan, as company CEO Esam Janahi told the press on August 15. “Royal Metropolis is our stepping stone to Jordan,” he said, “and we do believe it is a milestone project, the success of which will lead to more investments in the kingdom in future.” Yet it is not only the Bahrainis that are involved in the project.
The Jordan Gate development is a partnership between GFH, the Greater Amman Municipality and Kuwait’s leading financial institution, the Kuwait Finance and Investment Company (KFIC). At the same time, the UAE-based Al-Hamad Contracting Company is the construction partner for the project. Thus the complex will also provide a visible symbol of the importance of Arab investment in Jordan’s expanding economy. Prime Minister Adnan Badran was quoted as saying that large real estate projects were part of a government strategy of economic expansion that would target job creation. Along with tourism, he explained, real estate had seen much greater buoyancy than had been expected in recent months, leaving economic growth in a healthy state.
Two other construction projects highlighted by Badran were the King Abdallah II University, which will be built on the site of the Prince Hamzah Hospital in the capital’s suburbs, and the work currently underway to expand the Queen Alia International Airport. Yet much Arab capital coming in to Jordan these days is from smaller investors looking for real estate deals on a personal level. In particular, the number of Iraqis now living in Jordan is substantial—with estimates ranging anywhere from 200,000 to half a million. While security next door remains an issue, Jordan has become a safe haven for these people’s investments.
It has also meant the Jordanian capital in particular becoming a safe base of operations for many international organizations operating in Iraq, further boosting real estate demand. At the same time, the enormous liquidity present in the Gulf States has further fuelled their overseas investments, particularly as real estate markets in Dubai and elsewhere become saturated. The result has been not only major Arab interest in projects such as the Jordan Gate, but also a major surge in house prices and rentals.
Since mid-2003, house prices in Amman have risen by 10-30 percent, depending on the district. Thus projects such as the twin-towers on the hill in Marj Al-Hamam and the surrounding complex will likely be a popular destination for many from Iraq, Kuwait, the UAE and other Gulf states—and, the Jordanian government hopes, it will be a popular destination for their capital too.
Amman,09 05 2005