Specialised Investment Compounds: Real Estate

THE COMPANY: Specialised Investment Compounds (SIC) was established in 1994 and is a publicly listed firm with JD25.8m ($36.25m) in paid-in capital. Since inception, SIC has spun off a number of public and private enterprises to undertake a wide range of projects, primarily in industrial and commercial real estate. Nonetheless, the company’s operations have grown to include residential real estate, catering, real estate management and ownership stakes in brand name restaurants. SIC launched its operations in Jordan, but over time the business has expanded to Egypt and Qatar, and the company has intentions to continue its expansion into MENA.

Al Tajamouat Warehousing and Logistics Company, which was established in 2008, is a privately owned subsidiary of SIC formed by a cooperation agreement between Unicorn Investment Bank (Bahrain) and the Al Safat Holding Company (Kuwait). The company owns warehouses within Al Tajamouat Industrial City-Amman, which is an industrial area and SIC’s first project. Al Tajamouat Industrial City-Amman was designated as a Qualified Industrial Zone in 1998, and the products produced by its tenants are able to enter the US market on a duty-free basis. After Jordan signed a free-trade agreement with the US, exports from the city remained exempt from duties, and they began to be exported to several Arab countries on duty-free terms under the Greater Arab Free Trade Agreement and the Aghadir Agreement.

Al Tajamouat Catering and Housing Company was established in 2003 and is a publicly listed company under the ticker JNTH. JNTH owns several residential dormitories and a catering service to serve Al Tajamouat Industrial City-Amman, as well as international and local contractors working throughout Jordan. Meanwhile, Al Tajamouat for Touristic Projects, which was established in 2004 to develop high-end leisure and retail destinations, is a publicly listed firm under the ticker TAJM and the developer of the Taj Lifestyle Centre – an upscale mall that accommodates 190 tenants.

SIC’s expansion into the MENA region started with Al Tajamouat Investment Company-Egypt, which was established in 2007 to develop and operate the Al Tajamouat Industrial Park-Egypt. The park offers industrial, commercial and warehousing facilities, along with labour dormitories, security services, industrial catering and waste management facilities. The first phase of the project began in 2010. Meanwhile, the move to Qatar took place with the establishment of Al Tajamouat Investment Company-Qatar in 2007 to develop warehouses and dormitories. In 2009 the company completed its first project in Qatar’s Doha Industrial Area.

DEVELOPMENT STRATEGY: SIC’s development strategy is to expand into the MENA region and leverage its expertise in creating industrial and commercial real estate. The company also aims to expand its line of businesses. To that end, Al Tajamouat for Catering and Housing is finalising the establishment of an outdoor and banquet service division. Moreover, SIC also signed an agreement with a well-known French chain of restaurants to open branches of the restaurant in Jordan. In the future, SIC also plans to capitalise on opportunities to continue to add to its list of residential projects.

The company’s future growth strategy centres on its regional expansion plans. Before the onset of the Arab Spring, SIC had begun working on potential ventures in Syria and Libya. Al Tajamouat for Industrial Cities and Real Estate Development Company was established in Syria in 2010, and in the same year a memorandum of understanding was signed with the Libyan government to establish a private industrial city in Libya. However, as the Arab Spring proved, the company’s development depends on the ability of the whole region to regain its stability. Nonetheless, expanding beyond its home boundaries offers the company the best chance to grow due to the limited opportunities in the small Jordanian market, and because of the stronger growth opportunities in the countries that have seen strong social change, which may lead to renewed interest in commercial and industrial real estate projects.

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