Construction & Real Estate
From The Report: Jordan 2012
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Although 2011 was a difficult year for the industry, the construction and real estate sector displayed encouraging signs of a rebound. This was especially the case in the residential construction segment, which saw strong demand, boosted by mechanisms such as government exemptions on property registration fees. However, fiscal constraints that were the result of the global and regional economic slowdown have led to tighter government budgets and delays in payments for commissioned projects. More positively, Jordan is benefitting from collaboration with Saudi Arabian, which has allocated funds for development projects and the hiring of several local contractors. This collaboration is further evidence that Jordan stands out in the wider Middle East for its relatively efficient and quick construction licensing and permit process, which requires roughly half the time as neighbouring countries.

This chapter includes interviews with Yahya Kisbi, Minister of Public Works and Housing; and Yousef Al Nowais, Managing Director at Al Maabar.

Articles from this Chapter

Overview

Turning the tide: New regulations and regional cooperation pull the sector forward
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The year 2011 was a period of mixed fortunes for the construction industry. Although residential development was in strong demand – boosted by incentives such as government exemptions on property registration fees – construction work in other segments was less forthcoming. Government capital expenditures were restricted and banks remained risk-averse following the regional crash in property markets. Yet a revival via several new foreign investment initiatives spurred activity in the country’s…

Analysis

Big plans: Major projects advance despite limited funding
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With a push to increase its stake in a growing Middle Eastern tourism market, Jordan has undertaken a number of construction projects that are being led by both international and local contractors. While the global financial crisis and regional property crash still cast a shadow, signs in late 2011 and early 2012 indicate that the clouds are starting to clear in some segments. FUNDING CHALLENGES: “Banks are being very conservative in their cash-flow analyses for mega projects,” Ahmad Abd…

Interview

OBG talks to Yahya Kisbi, Minister of Public Works and Housing
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Interview: Yahya Kisbi How involved, in your opinion, are foreign companies in the Jordanian projects market? YAHYA KISBI: Several large-scale projects have been launched in Jordan by foreign firms, mainly under public-private partnership (PPP) and build-operate-transfer agreements. Notable examples include the Samra power plant expansion project, which was carried out by a South Korean conglomerate, and the ongoing expansion of Queen Alia International Airport, which is being implemented by the…

Interview

OBG talks to Yousef Al Nowais, Managing Director, Al Maabar
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Interview: Yousef Al Nowais How have the regional unrest and the global economy affected the property development market? YOUSEF AL NOWAIS: Despite the existence of some adverse political and economic conditions, the real estate market in the Middle East and North Africa (MENA) region continues to offer significant opportunities to property developers. For example in Jordan, the government has launched comprehensive economic reforms over the last decade to improve living conditions for the local…

Overview

Playing to its strengths: Prudent development and business models keep the sector afloat
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Government incentives on residential purchases helped the real estate sector make significant progress in 2011. According to the Department of Land and Surveys (DLS), it grew by 7.5% from JD5.98bn ($8.4bn) in 2010 to JD6.4bn ($9bn) in 2011. By contrast, real estate agents reported a difficult year for non-residential activity, as office space remained in oversupply and developers worked to finish projects amidst liquidity shortages. Still, investor interest is on the rise, and work is proceeding…