Kish You Were Here?

The Middle East’s incredible rise as a real estate hotspot may have been spearheaded by Dubai, but fresh moves by domestic and European players have put some jaw-dropping markets centre stage. By Mark Faithfull

Syria, Libya, Iran. A rogues’ gallery of intransigent states at loggerheads with America? Not quite. Instead, these countries represent some of the hottest real estate opportunities in the already super-heated Middle Eastern market.

Unsurprisingly, the first moves have been made by retailers. Earlier this year French hypermarket group Carrefour surprised the market when it committed to opening its first outlet in Iran by mid-2008 under the auspices of its Dubai-based regional franchise holder Majid Al Futtaim (MAF). Meanwhile, work is well under way on a massive tourist destination at Kish Island, a free trade zone off the southern coast of Iran that has relaxed visa entry requirements and will be complete by the end of 2009.

Graham Dreverman, CEO of MAF’s shopping mall division, confirmed Carrefour’s interest this spring. “Tehran is 16 million people,” he said. “It’s hugely important – bigger than the combined GDP of Shanghai and Beijing.”

“In terms of emerging market opportunities, we believe Iran is an interesting prospect. It’s a country that scores very highly,” explains Jim O’Neill, global head of economic research at Goldman Sachs.

Hana Ben-Shabat, vice-president at the London office of consultancy AT Kearney, reflects: “If you look at the basics, Iran has a population of 70 million with a young demographic, so it should be an attractive market.”

But for the Middle East’s fledgling markets to take off, some form of political stability is needed. Take Lebanon as an example. The “Paris of the Middle East” has twice built up from the ashes only for military disputes with Israel to derail economic turnaround.

Masdar
Abu Dhabi

The first project as a result of the Masdar Initiative is a new 6 million m2 sustainable development that uses the traditional planning principles of a walled city, together with existing technologies, to achieve a zero-carbon and zero-waste community. Created by Foster + Partners, the project has been driven by the Abu Dhabi Future Energy Company and will be the world’s first city powered entirely by renewable energy. Its 50,000 residents will live on streets modelled on traditional souks and medinas but draped in fabrics that can convert sunlight into electricity.

Kish Island
Iran

This offshore free trade zone island in the Persian Gulf is already popular with wealthy Iranians and is less than 30 minutes by plane from Dubai. Flower of the East, a massive tourist attraction that began in 2004, is now two years from completion. Modelled on the French Riviera, the €1.7bn project represents a real turnaround for Iran’s virtually non-existent tourism industry. Project managed by Germany-based Drees & Sommer, the masterplan includes 53,000 m2 of retailing along a main parade, the world’s second seven-star hotel, two five-star hotels with over 1,000 rooms and suites, 4,700 luxury villas and apartment complexes, a 27-hole golf course and a marina. An international airport is also being developed as part of the project.

King Abdullah Economic City
Saudi Arabia

Due for completion in 2010, Saudi Arabia’s largest ever commercial development, King Abdullah Economic City, is quadrupling in size to 168 million m2 under new plans approved by developer Emaar. The gargantuan project will now include 4,000 hectares of industrial land, a 1.28 million m2 seaport, a central business district featuring 3.8 million m2 of office space, hotels and mixed-use commercial developments, around 50,000 shops covering 8.7 million m2, and a hospitality zone of 120 hotels with a total of 25,000 rooms. The project, which is set to create one million jobs for Saudis, will also contain 250,000 apartments and 25,000 villas alongside
4.5 million m2 of parks, 450,000 m2 of Amsterdam-inspired canals, 42 km of beachfront, 550 mosques, a university and a sports stadium. Residents are expected to take possession of the first batch of commercial houses in the last quarter of 2008.

Zowara-Abou Kemash
Libya

Emaar Properties is to build a Hong Kong-style development in Libya, with plans by Al-Saadi Gaddafi, the 34-year-old son of Libyan dictator Colonel Muammar Gaddafi, to construct a “semi-independent” city in the Zowara-Abou Kemash area on the Mediterranean coast near Tripoli. Gaddafi intends to build the multi-billion-euro, high-tech enterprise city on a 40 km stretch of coastal desert near the Tunisian border. UK engineering group WS Atkins has already been called in and Gaddafi, who expects to be closely involved with the administration of the project, has said the first development, possibly a tourist resort, should start “in a maximum of two years”.

Gaddafi hopes the city will act as a magnet for foreign investment and says it will offer easy access, low taxes, offshore banking and a more liberal social regime. The 380 million m2 development will encompass residential, commercial, industrial, educational, healthcare, leisure and entertainment components. “We would like to create an environment that enables investors to make projects like they do in Paris, New York and London,” Gaddafi has stated.

Living Wall
Jordan

Construction has begun on a new Foster + Partners project in Jordan. Living Wall is a 150,000 m2 mixeduse complex in the heart of Amman, close to the new Al-Abdali city centre. Set against a sheer 30 m rock shelf, a rough-hewn podium has been inserted with strong, vertical cuts into a line of natural rock. Grouped together on this podium will be a set of six interconnected, sculpted towers housing a boutique hotel and a variety of residential units and offices. The podium on which the towers sit will contain shopping and leisure activities, and the deep spaces between the towers will house a variety of public spaces, including a sunken amphitheatre and a sheltered piazza.

Eighth Gate
Syria

A €360m mixed-use development, Eighth Gate broke ground in June. The design for two office buildings and four residential and commercial buildings is ongoing. Located in Yafour, 15 minutes from Damascus city centre, Eighth Gate is inspired by the legendary seven gates that were access points to Syria’s rich civilization. The project comprises apartments as well as a piazza, commercial tower, plaza and shopping centre.

Durrat Al Bahrain
Bahrain

Durrat Al Bahrain, a massive €2.2bn mixed-use project designed by WS Atkins and developed by KMC Bovis, is constructed on 12 artificial islands covering 20 million m2. Set to be completed in 2009, the development comprises a large shopping centre, two five-star hotels with a total of 700 bedrooms, restaurants and cafés, a 400-berth marina, a mosque, health centres and schools, and an 18-hole championship golf course.

DUBAI GOES ONE BETTER ... AGAIN

The Burj Dubai officially became the world’s tallest skyscraper in June, but Dubai’s appetite for evermore grandiose schemes continues unabated. The latest announcement of yet another world’s largest – the 3.7 million m2 shopping space in the Bawadi development, part of the €46bn Dubailand project – outstrips the former holder of the title, the yet-to-be-completed Dubai Mall, by a factor of four. There are more major plans in the pipeline. Mirdif City Centre (183,400 m2), the Lagoons and Dubai Towers shopping centre (100,000 m2) and redevelopment of the Deira side of Dubai Creek are all in the offing, and Dubai’s retail real estate market is set to double to around 10 million m2 by 2015.

PALM HILLS DEVELOPMENTS
EGYPT’S REAL ESTATE RISING STAR

One of the most prominent players in the Egyptian real estate sector is Palm Hills Developments, which has specialized in different aspects of the luxury-housing niche for almost ten years. Originally established in 1997 under the name El Etehadia, the company took its current form in 2005, with local development giant El Mansour/El Maghraby Investment and Development representing its primary shareholder.

Palm Hills Developments currently has some 23.5 million square meters of premium real estate at its disposal, constituting the second biggest land bank in Egypt. In hopes of meeting rising local demand both for residential housing and commercial space, the company has continued to acquire large parcels of land in strategic locations country wide.

“Our land bank is one of the most impressive banks in Egypt in terms of magnitude and prime locations,” says company Chairman Yasseen Mansour. “With many more acquisitions in the pipeline, our vision is to become the most prominent real-estate developer, not only in Egypt, but in the Middle East at large, augmenting our strength in the high-end niche market while also working to meet demand in previously untapped market segments.”

Promising to provide customers with “complete lifestyles”, Palm Hills Developments initially made a name for itself with its hugely successful pilot project, Palm Hills October, which opened its doors to residents almost four years ago. Located in the Cairo suburb of 6 October City, the 500-acre gated compound contains a total of 900 luxury villas, town houses and apartments done up in lavish Mediterranean themes.

In addition to housing, Palm Hills Developments also prides itself for its ability to bring together all the elements of a fully integrated community. For example, “The Club” – a fully branded venue for athletic and social events – will feature sports academies replete with international trainers, a world-class Thai health spa and several restaurants. While the first The Club is set to open its doors in Palm Hills October, others are scheduled to be rolled out in subsequent Palm Hills Developments projects as well.

The firm has also begun work on a residential project designed to cater to golfing enthusiasts. Currently being built next to the October compound, Golf Views Palm Hills – scheduled for completion in 2011 – will include 477 residential units built on some 500 acres of land. Along with sharing the sports facilities available next door, Golf Views’ main attraction will be a 27-hole golf course designed by world-renowned golf champion Jack Nicklaus.

The success of these initial projects prompted Palm Hills Developments to pursue another similar venture in the area of New Cairo, or Kattameya. Planned for completion within the next three years, Palm Hills Kattameya, will sit on roughly 1 million square meters of land and will contain 430 villas and town houses, promising the same exclusive community feel of its October counterpart.

In an effort to branch out beyond purely residential schemes, Palm Hills Developments is also working a on a 26-acre mixed-use project that will feature office space along with smaller housing units. Dubbed “The Village”, the development will be conveniently located opposite the American University in Cairo’s new campus and will be especially tailored to students, young families and the business community.

Some 60 percent of the project has been earmarked for residential property, including 432 apartments situated in 27 three-storey luxury buildings. The rest, however, will be devoted to commercial real estate, including an 18,000-square meter shopping mall, a ten-screen cinema complex and 9,000 square meters of office space.

In a further move towards diversification, Palm Hills Developments is also building a range of residential apartments on the Alexandria Desert Road, which links the capital to Egypt’s second city. According to company officials, the CASA project will offer mid-sized housing units replete with all the comfort and lifestyle advantages of larger gated compounds.

Perhaps most ambitiously, the firm also has major development plans for Egypt’s tourist-friendly North Coast, where it has acquired some 6 million square meters of first-class real estate on the country’s pristine Mediterranean shoreline. Scheduled to open in four years, the super-exclusive Hacienda Bay project will feature various types of residential units, five-star hotels, a first-class health spa and its own 27-hole golf course, as well as numerous dining and entertainment facilities.

Positioned to become one of the Mediterranean’s trendiest new summer destinations, Hacienda Bay aims to be the ideal resort for those seeking secondary homes or exclusive vacations. According to Mansour, the sumptuous resort promises “to forever alter luxury standards in Egypt”.

While there has always been an obvious need for the Palm Hills brand of super-exclusive housing developments, company officials say that local demand has grown exponentially within the last two years.

Magued Sherif, General Manager, attributes the growth spurt to rising brand recognition due to a stellar track record both in design and delivery. “The company has come to be associated with the hugely successful 6 October showpiece project, which – largely through word of mouth – has served to boost demand even further,” says Sherif.

Although Palm Hills Developments has focused its energies until now on projects in Egypt, company officials say they are now also contemplating promising real-estate opportunities in the nearby Gulf and North Africa. “We are currently researching new markets in the region and exploring the potential of several available opportunities,” adds Sherif.