Jordan Telecom - Awraq Investment

T H E R E A L E S TAT E &
CONSTRUCTION SECTORS
SECTORAL REPORT
JANUARY 6TH, 2008
RAKAN AYOUB
Sr. Research Analyst
[email protected]
ZAID DIBIE
Research Analyst
[email protected]
HAYA QADOUMI
Research Analyst
[email protected]
Table of Contents
Executive Summary........................................................................................................................... 02
Historical Overview ....................................................................................................................... 03
Regional Overview .......................................................................................................................... 03
Economic Overview ......................................................................................................................... 05
The Real-Estate Sector ................................................................................................................ 06
The Construction Sector ........................................................................................................... 12
Projects in Development ............................................................................................................. 14
ASE and the Real Estate Sector .............................................................................................. 17
Forecast and Conclusion ........................................................................................................... 18
Stock Market – Real Estate Constituents ................................................................... 21
List of the Constituents of the Sector in the ASE and Indicators .........................................................
Tameer Jordan Holdings Public Shareholding .......................................................................................
Real Estate Development Company (REDV) .............................................................................................
Union Land Development Company (ULDC) ..............................................................................................
Jordan Construction and Development (JRCD)......................................................................................
The Investors and Eastern Arab for Industrial and Real Estate Investments (IEAI)................................
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EXECUTIVE SUMMARY
The Real Estate and Construction sectors are unique as they form a fundamental pillar of economic
growth. These sectors are considered a beacon of how well an economy is doing. Again, they are also an
indicator of how slow things are getting. When times are good, industry needs to build, households
need to build, etc. thus a growth in Real Estate and Construction. Looking at this sector in a little more
detail is vital to know the makeover that our region is going through in recent years.
The Real Estate sector is a sector that has its variables of demand and supply depending on more than
just market economics. No matter what the market economics are and no matter how bad economies
are, the demographic aspect of real estate will eventually take hold. This mere fact makes the sector
viable for long term investments as the future need of living might offset any present supply. This is true
in most economies, and especially true in economies where the demographic distribution is pyramid
shaped. This is to say that the young population makes up a big part of the whole population.
The Real Estate and Construction sectors attract massive amounts of liquidity. The cost of a big project
in real estate (ex: resort hotels, high rises) can surpasses a billion. To attract such an investment in an
industrial venture would not be achievable. I don’t know of many Greenfield industrial operations that
may cost that much or attract that much. It is true in a refinery or a massive Power plant, but how many
of these are needed or built?
The Real Estate sector in Jordan tends mainly to developing residential and commercial properties.
Several hotels and resorts have been built. As the economy moves forward and the GDP grows, the
investments in the these will tend more and more towards the Jordanians. Until then, they are built to
attract tourists and foreign currency. This is one of the objectives of the real estate sector.
As is the case with the Real Estate sector, the construction sector saw a boom. The increase in demand
on contractors in the last several years caused a bottleneck in the supply. The effect was both felt in the
increase in the cost of materials and labor. This reflected negatively on the price of the projects being
developed. In addition, the growth in the companies in the sector was only horizontal as the lack of
mergers or acquisitions failed to produced the large size contractors that are capable of mega projects.
The year 2010 should see the finishing of a lot of projects in Jordan. Some of these projects are two
years old while others have been in the planning for a while. The biggest of these will be the extension
of the airport and Al-Abdali Projects. These together should change Amman. Abdali is the new
downtown, while the Airport extension will be more than triple the number of extra passengers coming
in to Jordan. The development of the industrial cities all around Jordan should move growth out of the
conventional growth center ”Amman” and into newer areas.
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HISTORICAL OVERVIEW
As Jordan is situated amongst Europe, Africa, and Asia, it lies in the cross paths of the Middle East. The
majority of Jordan is semi-arid land and less than 10% of the country is arable. Jordan is resource poor,
especially energy (Oil and Gas). In addition, Jordan has a chronic water shortage.
Jordan’s Population growth over the last 70 years was largely attributed to the waves of migration.
Today, these people constitute the majority in Jordan and a major portion of the population growth.
The main population waves into the country took place in 1948, 1967, and 2003. The numbers
amounted to hundreds of thousands each time. These caused an economic burden in each and every
time occurrence. Nonetheless, the small desert Kingdom benefited from this population movement and
made them a part of its own identity.
That said, Jordan is now seen as the beacon of stability in the region. A turbulent region that sees no
end to the charade of crisis. At the end of it comes a country that has welcomed refugees escaping their
own problems while at the same time knowing that they will at best live a more stable life in Jordan
than under the circumstances they have escaped.
Limited natural resources was a catalyst to policy makers to emphasize on education. It was vital as the
Jordanians started working abroad and their remittances started forming the a major piece of foreign
currency coming into Jordan. More and more of these Jordanians got educated and skilled, a lot found
their way to the GCC countries where income is higher and taxes are lower if not zero.
Part of the remittances to Jordan were vested into land and real-estate in general. The booms of realestate most took place in the 1970s, 1980s, and 1990s were partially driven by remittances of the labor
force that worked abroad and came back to Jordan.
REGIONAL OVERVIEW
The Real Estate sector continues to expand quickly in the region and more cash is being injected in this
sector. Real estate developments in the region and especially in the Gulf States like Dubai, Kuwait and
Saudi Arabia have increased dramatically over the past few years. This growth trend of real estate
investments is expected to carry on over the next few years due to the soaring oil prices and the
increase of government spending. Since 2001, the region has witnessed a boom in oil revenues in the
GCC countries, where revenues have more than tripled by 2006.
With this extra liquidity, the countries of the GCC invested a bulky amount of the revenue in the equity
and real estate markets of the region. Development projects that are mainly residential, retail, tourism
and entertainment have constituted the lion’s share of investments in the region. Most sectors in these
economies have expanded, but not at the pace that the Real-Estate Sector witnessed. As the real-estate
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is tightly connected with the construction sector, it was evident that the latter would pursue a growth
trend proportional to that of the first.
CRUDE OIL (WTI CUSHING)
In the MENA region, Investments in the real estate sector have reached a trillion dollar market and are
still increasing rapidly due to the huge demand. The boom of this sector in the region has been
supported by various factors other than the excess liquidity. High population growth rate of over 2
percent annually and an increase in purchasing power has resulted in a growth in the consumer
spending. Another important factor is banks competing to lend housing finances to homebuyers at an
attractive mortgage packages. This sector has been among the sectors receiving the most bank credit
amenities over the past five years. Banks based in the MENA region have considerably increased the
flow of their financing to the real estate sector.
The real estate sector in the region has been the main investment attraction, at both public and private
level. In the MENA region the mega projects in the sector make up around 48% of GDP (400 billion). The
travel and tourism industry in the region witnessed solid growth in the past few years and in return
affecting the leisure market for the real estate sector positively. The leisure real estate market in the
region offers massive potential for developers and investors. Travel market is strong in the region due to
its reasonable weather and sophisticated tourist attractions. Hotel developments and tourist
infrastructure present a very important factor for real estate growth in the region. The MENA region
has witnessed a noteworthy achievement in tourist and business activity. The Gulf has been the leader
of this growth, with an average hotel occupancy rates arriving at 70% and new hotel projects persist
quickly with most large developments inside and outside the Gulf region include new four and five star
hotels .
In the GCC states real estate is maintaining its position as one of the leading sectors, determined mainly
by the abundent liquidity in the region due to the high oil prices. This increase in oil prices for the past
few years has caused a surplus in the current accounts of the main GCC states. The oil boom has had
important positive financial spillover for the GCC countries and the region. An appealing part of the
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growth dynamics in GCC real estate sector in the region is that there is a shift away from the main rental
market and a bigger focus on commercial property development, property purchases and real estate
investment funds.
Dubai has led the real estate boom with real estate and construction sector making up 25% of the
country’s GDP. Abu Dhabi is catching up with Dubai and Saudi Arabia is emerging rapidly. The real
estate companies that have developed projects in Dubai have expanded within the Middle East to
building projects in Abu Dhabi, Saudi Arabia, Egypt, Morocco and Jordan.
Regionally, major investments were initiated, and a large portion of these investments were in the real
estate sector. One of the countries that benefited was Jordan. The real estate has been and still is an
attractive sector for investors in the Middle East, given extensive supply coming to the market. This
sector offers strong and stable returns. Nevertheless, as this sector provides many fascinating
opportunities, some concerns have been shown by some investors that the large amount of properties
set to be completed in the coming years could lead to a housing crash. Issues that are faced are the
difficult conditions in Iraq, and turmoil in Palestinian territory, that will continue to challenge regional
stability.
Economic Overview
The Jordanian economy has strengthened substantially in recent years. The kingdom has benefited from
strong domestic and private sector demand at large and accrued capital inflows within the context of
increased investments in the Kingdom. This was supported by a steadily improving economic growth.
Despite large negative external shocks (increasing oil prices, uncertainties related to the Iraq war, and
volatile foreign grants), Jordan’s real GDP growth averaged 6.2% during 2001-2006.
REAL GDP GROWTH (YEAR ON YEAR)
*ESTIMATED
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GDP growth was recorded across almost all sectors of the economy, where in 2006 the construction
sector led all sectors with a growth of 11.1% (year-on-year). The considerable increase in the GDP during
the past five years is a result of increased consumption and investment expenditure. This was mainly
fuelled by Iraqis who fled the war to find a safe haven in Jordan, remittances from Jordanian workers in
the Gulf countries, and the increase in Foreign Direct Investments (FDI). Most FDIs came primarily from
Gulf countries due to record oil revenues.
The Industrial Production Index is a strong indicator of a healthy economy. The Production Index rose
noticeably in the past three years especially in 2004, mainly due to the increased production of
fertilizers, cement, electricity, and construction activities. The increased productivity in cement,
electricity and construction activities is attributed to the increased demand by mega projects underway
across the Kingdom.
Jordan has witnessed a sharp increase in Foreign Direct Investment (FDI) over the past few years where
FDI increased from JD 52.8 million in 2002 to JD 2,282.5 million in 2006 and reached JD524.7 million
during the first half of 2007 and is forecasted to reach JD2.1 billion by year end. High levels of liquidity,
due to high oil prices, increased money invested by Gulf investors, money from Iraqi migrants, and
remittance from Jordanians working in the Gulf all of which increased consumption, investment
expenditure, and domestic demand. Moreover, Jordan’s political stability, investment friendly
environment, and strong property rights created a desirable investment destination for foreign
investors.
Main Economic Indicators
Nominal GDP (JD million)
Population (million)
GDP per Capita (JD)
Real GDP Growth(%)
Consumer Price Index (Annual Avg.)
Industrial Production Index
Foreign Direct Investments
(JD million)
Privatization Proceeds (JD million)
Remittance from Jordanians working abroad
2002
2003
2004
2005
2006
2007
6,794.0
5.098
1,333
5.8
1.8
7,228.7
5.230
1,382
4.2
1.6
-8.5
314.2
8,090.7
5.350
1,512
8.6
3.4
12.1
578.8
8,941.5
5.473
1,634
7.1
3.5
10.2
1,257.8
9,997.5
5.600
1,785
6.3
6.25
5.9
2,282.5
11,369.0****
5.772****
1,969****
6.0****
5.36*
3.1**
524.7***
88.5
1,404.5
0.5
1,459.6
39.6
1,544.8
452.5
1,782.7
2.4**
1,000.2***
86.2
637.9
*As of October 31/2007 Compared to the same period 2006
** Jan.-Sep./2007
*** Jan.-Jun./2007
**** Projected
REAL ESTATE SECTOR
Sectoral Overview
Infrastructure services such as roads, water, and electricity are basic parts of any Real-Estate expansion.
Roads have to be built right and electricity without interruption. This has to be planned and delivered
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properly. The Municipalities job is to anticipate this expansion ahead of time and prepare the necessary
infrastructure feasibility costs and implementation so as not to limit country’s growth with unavailable
or poor services
Currently, this problem is in the process of being solves. The Urban design doldrums that Amman might
be heading into is probably going to be avoided as Amman is on the fast track to recovery. The plans
being prepared and implemented currently are tending towards Amman's growth in the next 20 years.
The solutions being implemented are not only instrumental in solving current problems, but potential
problems arising in 3 or even 5 years.
Amman is currently seeing through a re-structuring of the transportation schemes and hubs. The main
links of public transportation are being moved outside the city. Road network are being redesigned to
make less and less congestions. The new mega projects that are intended to rejuvenate Amman will no
doubt change the levels of traffic in and out of these areas, especially the Abdali Project. The expansion
of Queen Alia International Airport road will in cause more traffic on the Airport. More Tourists will be
expected in and out of Amman as more rooms are being built.
The areas that will be worked will span the whole spectrum. The municipality is looking at an all
encompassing rejuvenation package that will act as a takeoff pad for future improvement work.
Downtown Amman is being improved, Abdoun bridge built to it to the 4th circle, the Abdali megaproject
is seen as only the first project in the Abdali rejuvenation plan. Many other projects are underway to
pave way for future investment in development in these areas on a solid foot.
Aqaba is included as a hotspot for attracting investments with a few projects completed and many in the
pipeline. Aqaba is witnessing a growth in projects being planned and developed day after day. Aqaba
Special Economic Zone Authority (ASEZA) and Aqaba Development Corporation (ADC) were set up to
oversee the development of Aqaba into a vital trading and leisure hub on the Red Sea. Billions of dollars
have been vested in the city in residential real estate, commercial development, and Hotel and Tourist
Leisure. In addition, the port has been revamped and so has King Hussein Airport. In addition, the city
became the hub of a new regional Airline.
The poverty pockets around the kingdom are being targeted for development too.
Areas with high rates of unemployment in the north, south, and east of Jordan have all been pinpointed
and projects have been allocated for these areas. These areas were initially put on a fast track
investment program and setup as special economic zones with lucrative tax incentives. As the
infrastructure of some of these newly setup economic zones is complete, a surge in construction and
investment activity in these areas might ensue.
Jordan’s lack of a truly multi-sectoral economic system where the industry has investment
opportunities, the service sector has investment opportunities, and so does the real estate led to the
dependence on the real estate sector. Money invested from the GCC will not come to Jordan to go into a
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car manufacturing plant or to make planes. We in Jordan do not make Automobiles or Airplanes. Real
Estate will get the Lion’s share.
Jordan’s situation in the middle east as a stable safe haven has seen it boom in the past 5 years. Due to
the demand, it was only reasonable that the real estate sector would expand progressively. The
movement of people from Iraq required that new properties be made available for them. The drop in
tourism in countries such as Lebanon meant that Jordan needed to find a summer living space for these
vacationers.
Interest Rates and the Money Supply
The drop in interest rates in the last 4 years has been instrumental in driving up the borrowing levels of
banks. The interest rates 6 or 7 years ago on a building loan were over 12%. This did not make a lot of
people eager to borrow money or buy property. Institutional level investments were definitely hindered
as the return period and the interest premium were too severe. Along came a drop in interest rates and
a change of loan pace.
With the increase in foreign funds held at Jordanian banks, the increased money supply available by the
banks to the customers meant that rates had to be dropped to encourage more borrowing. This increase
in funds gradually led the banks to offer incentives on borrowing funds. Whereas at one point,
borrowing was limited to a small proportion of the equity of the property and at a relatively high rate,
this was not the case anymore. The excess liquidity forced the banks to try and make-do with ways of
moving the money.
Financing and Demand
The increased liquidity in banks forced them to slowly lower there stringent guidelines on loans,
including real estate loans. As loans were once taken on a small proportion of the value of the house,
this was no longer the case. This led to an increase in demand for properties.
This was taking place on two levels. The first was on a personal level and which was in the form of a
single home buyer looking for a family unit. The second was in the form of the developers who were
buying land and putting up buildings that has these units. These developers varied and the range span
was from a 1 or 2 unit developer looking to capitalize on the potential appreciation in price, to the
18,000 unit developers looking to provide a service to a certain sector of society.
Supply and Price
As the Demand increased, with it increased the price, and that was followed with the supply. Supply will
always lag the price increase, and that in turn will always lag the increase in demand in an up market. As
can be seen from the movement, supply, price, the price on the supply side in this sector is quite elastic;
i.e. as the price went up, more and more development in the sector was taking place.
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As the demand peaked, price stabilized. This was not so with the supply of new apartments into the
market. Several thousands are still being constructed as the demand matures and the price peaks. The
price already dropped relative to its peak eight to nine months ago. Land may not be dropping as fast, as
this is due to the fact that most of the apartments in the market carry loan fees on them. The longer
they stay vacant, the more money will be allocated out of the selling price to cover bank loans.
Foreign Direct Investment (FDI)
Real Estate development saw a big boom internally. Development along with funding came from
internal sources, but FDI played a major factor in the growth of investments in the sector. The major
projects that are in the hundreds of millions of dollars are all either pure foreign money or foreign
partnerships. Only a handful of such projects are locally born and funded. The main funding of these
projects again mostly came from one destination, the GCC.
FOREIGN DIRECT INVESTMENT IN JORDAN (JD MILLIONS)
.a= ACTUAL, .e= ESTIMATED
This increase in liquidity from the GCC, with the movement of people from Iraq due to the war lead to a
boom in this sector. The increase in bank liquidity and the drop in interest rates were prime in loan
increases and thus an increase in real estate development. Additionally, growth was seen in the services
associated with the development sector.
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REAL ESTATE SUB-SECTORS
Residential
The residential sub-sector can be divided into three parts: Upper Income, Middle Income, and Lower
Income. The shifts in demand and supply have caused two important developments to take place over
the last 4 years. The first is that prices have gone up dramatically. That is unavoidable due to the
circumstances. The second and more important development is that whole segments were phased out
of even being potential candidates of owning a house. That is mainly due to the price factor.
When the price of apartment units increase by three folds without the consideration that the GDP per
capita in Jordan is JD2000 per year, this puts the majority of the marginally available cliental out of the
radar screens. The fact that low-income housing was not a priority at the beginning of real-estate boom
5 years ago did not make this easier. This has caused dramatic under supply in middle to lower-income
housing, with an oversupply in Upper income housing.
The market condition that was caused by supply and demand forces led to an increase in real-estate
prices by as much as 50% per annum in the last 5 years . This had so many repercussions on the
economy and on the consumer. The breakup of the different residential segments shifted as prices kept
on moving higher and higher. The price change meant that a JD40,000 Flat sold at JD100,000 within 4
years. This drove up the sector but at the same time alienated many potential buyers. The price increase
did not come at a hike that can be handled. The damage effected every segment of society.
The boom of development which started 5 years ago was most tended towards a Middle Income buyer.
The Flat was which sold for JD40,000 when it was built 4 years ago, now sells for JD100,000. A JD100,000
Flat is no longer a middle income Flat. Taking into consideration that it was a well designed and built flat
and selling for JD100,000, it would sell for JD250,000. Why did this hike take place? It’s due to a
combination of reasons as I mentioned earlier. Nonetheless, it happened.
The oversight of this lies in the fact that the High Income residential customers and the low income
customers alike were not allocated enough property that should have been developed to these groups.
The first should be tended to as specific properties should be developed to a customer that does not
worry about the relatively small varying amounts of money that needs to be saved but rather on a posh
living. Equally so is the Low Income Group that was ignored as there was little drive to develop massive
sub JD20,000 Units to fulfill the demand. Currently, there are a few projects that are going to tend to
this marginalized group. As this sector is a big portion of the population, whether they should be tended
to is not the question, it is how fast and at what volumes.
Commercial
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Although residential real estate forms a majority of the real-estate sector in Jordan, FDI investments
allocated for the Real-Estate Sector were mainly tended towards commercial real-estate. The
commercial, High Density Multi Use (HDMU) , and tourism projects were allocated the lions share in FDI
rather than Solely Residential Use Projects or Industrial Projects. This made more sense as commercial
projects made more money, and multiuse projects attracted more foreign funds when completed.
Industrial Projects required a lot more than money and the construction was usually the beginning.
High Density Mixed Use (HDMU)
High Density Mixed Use (HDMU) is the new wave of development taking off in Amman. This form of
development is in the form of high rise towers that usually include residential, commercial, and retail.
The High Density reflects the fact that these buildings are high rises usually over 25 floors . The move
towards this kind of building comes after years of applying laws and regulation that were very strict,
thus limiting this kind of construction. The laws limited how many levels buildings could be, and very few
buildings in Jordan jumped the 10 floor level mark. Newer engineering codes, along with strict
engineering guidelines will have to be implemented so as to build high-rises safely, in Jordan.
The growth of Amman at an uneven pace has led to unplanned expansions. The aim of the HDMU zones
is to set the pace for a more planned growth. This becomes especially true when the growth includes
infrastructure. The areas selected by the Municipality of Amman have been studied and their ability to
cope with traffic and future growth verified. For HDMU dedicated areas, infrastructure has to be setup
to cope with the volume of usage in a small area horizontally.
The development of high rises comes in for two reasons. The first is that investment is being made in
something that is not available and will find a market. The second is that these buildings constructed are
more professional and in turn are attractive for firms that are willing to invest in moving their
headquarters to Amman.
Hotels and Tourism
Tourism has undoubtedly picked up in the last 2 years. The future forecast for the sector is further
growth in the near and long term. With all of 2005 incidents, along with the regional crisis including the
Lebanese/Israeli war, the tourism sector has shown an amount of resilience. The tourism sector’s
recovery has shown investment opportunities.
Liquidity from the GCC saw its way into the Hotel and Tourism as this sub-sector was underdeveloped
and needed investment. Jordan’s Dead Sea area alone needs at least one thousand rooms to be at par
with the requirements of world class tourist destinations. This is not to mention the rooms need in other
areas like Aqaba and Amman. The combination of extra liquidity in the GCC, a deficit in rooms in Jordan,
and a turnaround in tourism sector all led to big investments in hotels and resorts.
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As opposed to other forms of real-estate development, Hotel development does more than move the
economy and employ people whilst it is being built. It does the same after it is finished but in a different
fashion. Not to mention the fact that it brings in money into the country from tourists and travelers. This
makes investing in this sector more rewarding to the economy than putting up buildings with
apartments for sale (although they are direly needed).
THE CONSTRUCTION SECTOR
Given the expansion in commercial, residential, hotel, and resort buildings, the construction sector in
Jordan has grown substantially in the past few years. This sector, which recorded strong growth in the
past years, continues to expand in line with the real estate sector and has hence had an encouraging
force on the development of other sectors in the economy. The growth in this sector is credited to the
number of projects being built and the rising number of residential and commercial properties under
construction. This growth is supported by the infrastructure projects commenced by the Jordanian
government as well.
Following a period of outstanding growth between 2002 and 2006, and due to the high demand for
residential and commercial properties, the construction sector witnessed a growth of 40% in 2006 to
reach a value of JD4.9 billion. Investments in the construction sector are still standing at a high level.
There are now more than 250 registered contracting companies in Jordan. Overall, this sector recorded
high growth rates in 2006 and contributed JD392.3 million to GDP in that year. Although non-Jordanians
contribute considerably to this sector, Jordanians continue to be the leaders representing 80% of the
market share. This sector is expected to attract over JD50 billion worth of investments over the next five
years.
Jordan has a reasonable construction cost structure compared to the region. Materials that are
produced locally are accessible at a viable price. Stone and ceramic are extracted locally and Jordan
manufactures ceramic tiles as well. In addition, Jordan produces sanitary equipment, home fixtures and
appliances, air conditioning, heaters, elevators and other electrical items including cable and wiring.
Jordan also has a highly skilled workforce that makes it well prepared to maintain a vital construction
industry.
Bank credit to this sector has grown substantially and will continue to do so in the future. The
construction sector in Jordan will proceed with its current expansion driven by private (both foreign and
domestic) and public sector investments. Additional foreign investments are expected to flow into
Jordan in the coming years. More than 40% of population is under the age of 20. This young population
will require new housing in the coming years. In addition, the population is growth is high. The factors
mentioned will have a positive effect on the growth of this sector.
Jordan’s local construction companies are relatively small in size compared to the region. They are
unable to provide the type of service required for mega projects (airports, mega resorts, hanging
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bridges, etc). One solution for this would be mergers. Consolidation of several consulting and
contracting companies in Jordan allows them to compete for large scale projects. In addition, this will
enable them to bid for projects in the lucrative Gulf States as well as North African Countries.
In the case of a consolidation, several companies in the region could be a solid pick for a joint venture,
with the new formed company or companies. These include Saudi Oger, Saudi Bin Laden Group,
Orascom Construction (with its subsidiary BESIX), Consolidated Contractors Company (CCC), and
Joannou & Paraskevaides Ltd (J&P). Such large companies hold the resources and engineering expertise
necessary for large construction duties. Their experience and track record will prove invaluable in
advancing construction standards in Jordan. Local companies in Jordan can participate in bidding for
smaller projects or by working as subcontractors on big projects. On the other hand, the abilities of
efficiency demonstrated by these companies cause them to be the better pick for any large scale time
sensitive project.
In addition to the previous factors, the boom led by the real estate sector has caused a strain on raw
materials and labor. With the current level of real estate activity, the construction sector in Jordan has
been booming. This increase in demand for raw material led to an increase in the construction costs.
Construction materials like cement, steel, stone, granite, tiles, paints and sand have increased in price
following the pour of construction. As for labor, hourly wages have increased due to the increase in
demand for labor as construction projects increased.
Steel
Jordan has 11 rolling steel mills with a total capacity of 856,000 tons per year (t/yr). The volume of the
consumption in the domestic market amounted to 600 thousand tons in 2006 against 500 thousand tons
in 2005, with a growth rate of 20%.
The imports of iron and steel to the kingdom fell by JD 4.7 million in 2006 amounting to JD 312,935
million (440 million US Dollars). Most of the requirements of the Kingdom of these materials were
imported from several countries of which the most important is the Republic of Ukraine which alone had
captured 42.2% of the value of the imports of these materials. Most of these imports came from Saudi
Arabia, China, Germany, USA, Egypt, Italy, South Korea and Japan. Owing to the growing domestic
demand for the finished iron and steel products, Jordan's exports did not include these commodities
among the most important seven commodities exported during the last year.
Cement
The demand for cement has been on the rise for the past 5 years as a result of the boom in construction
across the Kingdom. Demand for cement has outpaced supply and it was one of the factors causing
cement prices to rise. The increase in oil prices has affected the price of cement and that in turn
increased the construction costs as well. Cement production and the quarrying and mixing of other
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concrete components are energy intensive, making the cost sensitive to energy prices. The energy costs
constitute 70 per cent of the total production cost of cement.
Following are several facts about the cement industry;



Concrete is used as a material in quantities second only to our use of water.
As much as 1.25 tonnes of CO2 is produced for every tonne of cement.
Around 1600 kg of raw material is needed to produce 1000 kg cement.
Jordan currently has two cement factories, Jordan Cement Factories Company( a member of The
Lafarge Group) and Arab Company for White Cement. Jordan Cement Factories controls over 97% of
cement and clinker production while the Arab Company for White cement Industry accounts for the
rest. Jordan has enjoyed a mature cement industry that has, up to recent years, been able to keep up
with market demand quit efficiently.
Cement factories in Jordan rely on oil in their production, and currently looking for alternative sources
of energy for their operations such as oil shale in order to reduce the cost of production. But besides
reducing the cost of energy used in producing cement, Jordan is in urgent need for an increase in
cement production because of the construction boom that the country is witnessing. Both factories are
currently working at their full capacity and cannot meet local demand, where excess demand is mainly
supplied from Egypt. As a result, the country is expecting three new factories to be built in the next few
years.
Cement Production (1000 Ton)
Steel Imports (JD Million)
Iron and Steel Production Price Index***
2002
2003
2004
2005
2006
2007
3,5557.5
124,558
110.5
3,514.9
148,574
126.6
3,907.6
252,286
153.3
4,045.9
317,712
150.4
4,017.2
312,935
165.8
2,661.2**
261,641*
194.8*
*January –July/2007
**January-August/2007
***(1999=100)
PROJECTS UNDER DEVELOPMENT
The Table below gives a summary of current real-estate projects underway in Jordan.
Project
Andalucia
Company
Tameer
Date of Completion
2008
14
Details
Project is built on a total area of 800,000 sqm.
Consists of 600 villas. The villas vary from 312 to
th
650 sq.m in size. Situated 20 km away from the 7
circle towards Queen Alia Airport. Cost of the
project is JD 150 million.
Al Jiza
Tameer
2012
Madinat Al Sharq
Project
Mawared
Phase (1) -2012
Entire Project- 2025
Garden Villas
Tameer
Phase (1)-2008
Phase (2)-2010
Greenland
Residential Estate
Al-Hummar Hills
Royal Metropolis
Al Kurdi Group
Amaar
Gulf Finance
House
Bayan Group
Phase (1)-2008
Phase (2)- Unknown
2008
Jordan Gate – 2009
Royal Village - Unknown
15
Project is spread over 7500 sq. m.
Offers 15,624 housing units flats which are between
80 to 180 sq. m in size and villas that are 300 sq. m
in size. This project also offers 1,800 office spaces all
of which vary in size between 100 to 200 sq. m.
th
Situated 37km away from the 7 circle near the
Queen Alia International Airport. Caters lower and
mid income groups. Project is worth USD900
million.
Project will cover a total land area of 2,500 hectare.
The project is divided into six phases and aims to
provide housing for 500,000 people. Cost of the
project is USD930 million.
First phase of the project being built on a total area
of 69,600sqm with 253 adjoining villas. Phase two
consists of 200 villas. Villas are being built in Zarqa.
Project is worth JD50 million.
Entire project is being built on a 1,100,000 sq.m of
land. The project consists of two phases. The first
phase is 400,000 sq.m is size and will consist of
villas, semi villas, and flats. Phase two will be an
extension of phase one and will be situated on a
700,000 sq. m land. In addition to the housing
units, the project consists of public parks, a gym, a
mall, a recreation centre, a restaurant, a pharmacy,
a clinic and a nursery. Project will be located in Marj
al Hamam. Cost of the project is JD660 million.
The residential compound will be situated on a
29,000 square meters in West Amman. It will be a
gated community compound. The compound
consists of around 40 villas ranging from 411
square meters to 615 square meters. Cost of the
project will is JD22 million.
Project consists of two parts. First part is the Jordan
gate. Jordan gate will be a development consisting
of two high rise towers built on an area of around
28,500 sq.m. The 2 buildings will consist of a built
up area of about 220,000 sq.m. Jordan gate will
include executive offices, conference facilities, a
luxurious five star hotel, and a variety of retail
stores. The project is located on the sixth circle in
Amman. The second part of the project is the Royal
Village. A luxury gated residential community which
will be developed on an area of 470,000 sq.m. in
Marj al Hammam. It will contain 600 apartments
and 400 villas. the development will consist of a
recreational centre, retail mall, a hotel and
commercial space. The estimated cost of the two
projects is USD1B billion.
Al Abdali Urban
Regeneration Project
Al Abdali
Investment &
Development
PSC
Al Tajamouat Mall
Al Tajamouat
for Touristics
Projects Plc
2008
Al-Baraka Mall
Al Baraka
Group for trade
&Investment
2008
Grand Amman
Financial Complex
Kuwait’s Grand
Real Estate
Projects
Company
The Red Sea Resort
Project
Kempinski Hotel
Aqaba
Tala Bay
Tameer
United Saudi
Jordanian
Hotels and
Tourism
Company.
Jordan Projects
for Tourism
Development
2010
2009
2008
2008
2008
16
The Abdali project is an urban project that will serve
as the new downtown of Amman. The project will
be built on a total area of 447,000 square meters.
Located in Al-Abdali area, west of downtown
Amman. The project will provide office spaces (up
to 50% of the project), residential area (up to 18%),
in addition to various amenities to serve residents
and visitors. Cost of project is USD3 billion.
A mall under construction in Abdoun. The project
will be built on an area of 60,000 square meters.
The shopping center will be attached to a grocery
hypermarket of about 5000-6000 square meter. The
total estimated cost of the first phase is JD90 million
The mall will facilitate over 25,000 square meters
of retail spaces and 15000 square meters of
underground parking spaces which will hold up to
350 cars. The mall will be located in Sweifieh.
Will be built on a 20,000 sq. m site in Abdoun. The
complex will have twin towers , consisting of 42
story five star hotel and a 40 story office building.
Cost of project is USD250 million.
Located on the southern shore of the portal city of
Aqaba, 9KM away from the Aqaba City Center.
Consists of 260 villas. Area of the projects is 147,000
square meters. Cost of project is USD60 million.
A five star hotel situated on the northern shore of
Aqaba. It will consist of 2,169 rooms and will be
built on a 11,760 sq.m area of land. The cost of the
project is USD30 million.
Tala bay is located on the southern coast of Aqaba.
The site is stretched over 2.7 million meters square
area. The project consists of a marina, residences,
five and four starts hotel. It also includes a golf
course, amusement park, beach club and a fitness
center. Tala bay has its own infrastructure. The
marina, residences and retail outlets opened in
2005. The hotels and other facilities will be
completed by end 2008. The cost of the projects is
JD350 million.
Aqaba Mall & Resort
Al Kurdi Group
2010
Saraya Aqaba
Saraya Holding
2009
Ayla Oasis
Ayla Oasis
Development
Company
Crystal City
Omnix Group
Saraya Dead Sea
Saraya Holdings
2014
2008
Unknown
A future project that will be located in Aqaba’s free
trade district area. It will consist of a multi level mall
with retail and leisure facilities, cinema theaters, a
four star hotel, a park and more. The project will be
built on a area of 100,000 square meters. Cost of
the project is JD210 million.
The project is spread over 6,975,000 square feet.
The projects will consist of residential units, six
world class hotels, restaurants and more. The cost
of the project is estimated to be around USD600
million.
A project aimed to develop artificial lagoons. The
total area of this projects is 4,300,000 sq.m with a
250 meters sea frontage on the gulf of Aqaba. The
cost of the project USD1 billion.
This projects will be built on a 142,000 sq.m of land.
It will compromise of 600 hotel rooms, suits and
chalets as well as restaurants. Cost of the project is
USD140 million.
The project will feature an eighteen-hole golf course
and a nine-hole practice course in addition to a club
house, and a boutique hotel. The project will be
built on a 450,000 square meters. The project will
cost JD1.5 billion.
Munya Woodland
Resort and Spa
(Dibbeen Project)
Jordan Dubai
Capital
2010
The resort will be the first in northern Jordan.
The project will consist of a 40 room ecofriendly hotel and 50 residential units in the
Dibbeen Forest and is estimated to cost $50
million.
ASE and the Real Estate Sector
The Amman Stock Exchange (ASE) has thrived in the last few years. In it, the Index went from the
humble levels of 1700 (the close of 2002) to end 2005 at a soaring 8192, peaking in late December 2005
at over 9000 points.
Jordan has managed to attract a large portfolio and direct investments in the last few years. The real
estate companies have expanded and many ended up listing on the ASE. Currently there are 29 listed
Real Estate and Development companies on the Amman Stock Exchange. The market capitalization of
17
the ASE is J26.5 billion (26/Nov/2007) while the real estate sector’s is JD1.78 billion (26/Nov/2007). That
makes up about 6.7% of the total market capitalization.
Forecast and Conclusion
Jordan has managed to attract billions of dollars in Foreign Direct Investments over the past five years,
where in 2006, the FDI reached JD2,282.5 million. There are many reasons behind the real estate boom,
high population growth rates averaging 2.5%, excess liquidity in the Gulf countries as a result of high oil
prices looking for investment outlets. Economic growth at an average of 6%, local banks’ competition to
provide housing loans at a lower interest rates, and much easier investment rules under the Investment
Promotion Law allowed foreigners to own real estate properties. These laws made it easier for Iraqis
and other nationals to settle in Jordan, and attracted many foreign investments to the Kingdom.
The real estate sector has witnessed a major shift over the past three years. The sector is more
transparent especially when it comes to prices. The sector is nourished today with many real estate
companies and many more are entering the market. This was detrimental in attempting a balance
between the supply and demand. The balance unfortunately did not occur.
Demand for apartments and homes is expected to increase leading the year 2010. Most of the major
real estate projects such as Abdali, the Airport, light-railway, Aqaba, and Dead Sea projects are expected
to be completed by then. These major projects will facilitate for many foreigners to set up businesses
and residence in Jordan. In addition, the rent law will be adjusted in 2010 where landlords can adjust the
rent on existing tenants; many people will feel better off owning property rather than renting it. In
addition, the Jordanian population is a young population, where 37% is under the age of 15. This is
indicative of a sustained demand for housing.
The real estate boom in Jordan had a spillover on the construction sector as well. Statistics show that
the sector’s contribution to GDP has amounted for JD392.3 million in 2006 compared to JD289.3 million
in 2003, an increase of 35%. Moreover, the construction sector’s contribution to GDP during the first
quarter of 2007 reached JD72.9 million compared to JD68.1 million during the same period in 2006.
Number of Permits Issued
Licensed Area (Thousands of m2)
Number of registered construction companies
Capital of registered construction companies (JD
million)
Contribution to GDP (JD million)
2002
2003
2004
2005
2006
H1-07
21,433
7,306.8
65
7.2
22,555
8,108.8
86
6.0
27,064
9,974.2
112
7.1
25,683
12,231.4
197
20.0
20,191
12,924.7
265
19.6
15,227**
6,347.1
178**
13.0**
289.1
289.3
324.0
353.1
392.3
72.9*
*First quarter/2007
** Jan.-Jul./2007
18
The government revenues from land registration reached JD187.8 million in 2006 compared to JD51.7
million in 2003, an increase of 263%. Moreover, revenues from land registration reached JD156.2 million
by the end of the third quarter of 2007 compared to JD144.1 million during the same period in 2006, an
increase of 8.4%.
Jordan’s real estate sector has witnessed a change in the trend of residential and commercial projects.
Residential and commercial projects today are in the form of high-rise buildings, while retail projects are
in the form of mega-malls. This trend is more likely to be the new face of Amman and other major cities.
Given the rapid increase in population and the scarcity of land, more vertical construction will be seen.
Additionally, the country has also witnessed a major shift in the development of new homes, major
contractors are moving to building track-homes in the outskirts of the major cities. It is obvious that the
customer today has a variety of shopping, residential and office space options to choose from, and the
options will continue to increase especially with the competition the sector is facing today.
The prices of construction materials are expected to increase by 2008 with the exception of cement. The
price of steel is expected to increase significantly due to the continuous increase in oil prices. The
government has recently increased the price of fuel oil used in the production process which led to an
increase in the price of steel. The price of cement on the other hand, is expected to decrease in two
years given that there are more than three new cement factories underway all operating on gas
therefore cutting on cost. The expected further increase in the price of steel will affect the cost of
construction and hence the prices of apartments, office spaces as well as retail spaces. This expected
hike in prices will also affect the market demand.
The Greater Amman Municipality (GAM) has recently revealed the Amman development master plan.
The master plan will set the prospect of Amman for the next 20 years. The plan consists of three phases.
The new planning system, which will balance between the public and private needs while keeping the
city’s culture and heritage, will improve the infrastructure of the city to accommodate the increase in
population and the mega-projects the city is expecting. The master plan consists of categorizing certain
areas within the city of Amman as High Density Mixed Use Development area for high-rise buildings,
such as Abdali. The second phase, will transform the main roads of Amman into roads that will
characterize the city. The third phase will develop industrial areas in the city which will be close to main
roads and have access to already existing infrastructure.
The Aqaba Special Economic Zone (ASEZA’s) master plan is to develop the port city of Aqaba’s land use
focusing on economic activity, tourism, housing and employment. The master plan is to promote longterm development through land use, zoning and density. Moreover, it encourages tourism, residential
development, commercial and retail development, academic and institutional development in addition
to recreational and open space development. Aqaba’s vision is to become a strategic world-class
business hub and a major leisure destination to improve the quality of life through sustainable
development. Upon its establishment in 2001, ASEZA is seeking to attract $6 billion by 2020; ASEZA has
exceeded all expectations as the value of committed investments in Aqaba is currently over $8 billion.
19
The Zone is expected to attract more new investments in the next few years, as more projects are
expected to be completed within the next three years, the zone will become more attractive for tourist,
students, businessmen and workers seeking job opportunities.
Although the major real estate projects have created many job opportunities, the main concern is that
most of these jobs are being taken by foreign labor. The reason behind this is the lack of skilled labor in
the construction sector. The Ministry of Labor, the Jordan Armed Forces, and private sector enterprises
have all participated in a training program to provide on-site training to young Jordanians in the areas
needed in the construction industry. This is a way forward to limit the increasing number of foreign
labor working in the construction sector. The construction sector is expected to create more job
opportunities for Jordanians in the next few years and we should witness more Jordanians working in
the sector as more and more Jordanian obtain technical skills in-line with the sector’s needs.
The real estate sector in Jordan will be under the microscope for the next five years. If the major
projects currently in the pipeline turn to be successful, we will see more projects and investments
coming our way. The liquidity is currently available in the region and will continue to be available in the
foreseeable future. Jordan will continue to be an optimal safe haven for foreign investors given its
political stability, investment friendly laws an diverse investment opportunities. Jordan is expected to
continue to witness more investments and therefore further boom in the construction and real estate
sectors.
20
#
5
4
3
2
1
SPECIALIZED INVESTMENT COMPOUNDS
ARAB REAL ESTATE DEVELOPMENT
The Investors and Eastern Arab For Industrial and Real Estate Investments
JORDANIAN REALESTATE COMPANY FOR DEVELOPMENT
UNION LAND DEVELOPMENT CORPORATION
REAL ESTATE DEVELOPMENT
TAAMEER JORDAN HOLDINGS PUBLIC SHAREHOLDING
PETT
BAMB
SPIC
ARED
IEAI
JRCD
ULDC
REDV
TAMR
15
18
20
23
25
30
30
45
50
Shares
Outstanding (JD
Millions)
211.9
1.14
1.37
2.38
4.78
2.35
2.96
1.78
2.15
1.77
2.48
17.10
24.66
47.60
109.94
58.75
88.80
53.40
96.75
88.50
Market
Capitalization (JD
Millions)
525.51
1,212,347,452
28,005,083
15,586,757
45,350,987
34,452,379
17,769,647
23,247,547
101,042,033
52,996,704
177,128,823
Total
Shares Traded
9,844,955
46,679,063
48,339,667
239,293,085
73,338,399
53,763,670
40,972,973
220,593,329
112,115,717
433,060,769
Total
Value of Shares
LISTED REAL-ESTATE COMPANIES IN THE AMMAN STOCK EXCHANGE
6
BEIT AL-MAL SAVING&INVESTMENT FOR HOUSING
PROF
Share
Price (JD)
7
THE REAL ESTATE & INVESTMENT PORTFOLIO CO.
Ticker
8
THE PROFESSIONAL FOR REAL ESTATE INVESTMENT AND HOUSING
DESCRIPTION
9
RESOURCES COMPANY FOR DEVELOPMENT & INVESTMENT PLC
EMMAR INVESTMENTS & REAL ESTATE DEVELOPMENT
JNTH
JOMA
EMAR
10
10
10
11
12
2.41
2.2
2
1.3
11.49
1.62
1.26
3.13
15.54
12.12
16.87
16.50
15.00
13.00
114.90
16.20
13.86
37.56
25,967,016
59,839,115
61,460,112
116,013,606
253,565,766
45,143,427
18,006,002
16,899,762
68,499,490
114,829,686
39,314,376
42,361,654
9,021,556
22,968,938
11,591,898
20,709,741
23,554,666
48,608,899
83,615,188
18,866,998
9,616,633
11,239,564
5,443,455
88,039,198
36,404,273
14,633,071
10
13
AL-TAJAMOUAT FOR CATERING AND HOUSING CO PLC
JIIG
REAL
7.5
2.02
14.12
59,343,825
47,016,808
14
ARAB EAST FOR REAL ESTATE INVESTMENTS CO
REIN
7
7.5
2.59
5.55
25,316,878
42,776,100
15
JORDAN INTERNATIONAL INVESTMENT
MEET
6
3.53
7.26
11,400,618
16
REAL ESTATE INVESTMENT /AQARCO
INMA
6
1.85
4.70
4,823,131
24.96
17
METHAQ REAL ESTATE INVESTMENT
4
2.42
10,345,063
193,174
1,326,607
2.08
18
INT'L ARABIAN DEVELOPMENT AND INVESTMENT TRADING CO.
COHO
3
2.35
4.06
871,351
3,676,570
12
19
CONTEMPRO FOR HOUSING PROJECTS
PRED
AMAD
3
3.25
HIPR
20
AMAD INVESTMENT &REAL ESTATE DEVELOPMENT
IHCO
2
2.03
1.63
HIGH PERFORMANCE REAL ESTATE
21
PALACES REAL ESTATE AND DEVELOPMENT
UNAI
2.71
11
22
IHDATHIAT CO-ORDINATES
MEDI
2
3.26
58,264,057
23
ARAB INVESTORS UNION FOR REAL ESTATES DEVELOPING
1.2
15.60
24
MIDDLE EAST DIVERSIFIED INVESTMENT COMPANY
THDI
0.5
1.3
25
AL-TAHDITH FOR REAL ESTATE INVESTMENTS
ZAHI
VFED
12
26
AL SHAMEKHA FOR REALESTATE AND FINANCIAL INVESTMENTS CO.
ATTA
27
ZAHRAT ALURDON REAL ESTATE AND HOTELS INVESTMENT
COMPREHENSIVE LAND DEVELOPMENT AND INVESTMENT
28
12
29
21
TAMEER JORDAN HOLDINGS PUBLIC SHAREHOLDINGS.
SHORT NAME:
TICKERS:
TAMEER
OVERVIEW:
TAMR, TAMR JR, TAMR.AM
CLOSING PRICE:
HIGH PRICE:
LOW PRICE:
AVERAGE PRICE:
JD 2.48
JD 3.17
JD 1.98
JD 2.37
CLOSING VOLUME:
HIGH VOLUME:
LOW VOLUME:
AVERAGE VOLUME:
346,868 SHARES
5,234,607 SHARES
45,077 SHARES
783,756 SHARES
TAMEER: Jordanian Public Real-Estate company
established in 2005. The company has a paid up
capital of JD 212 million. Currently, Khaled Dahleh is
the chairman of the Board with Dr. Khaled Wazani
CEO up to the end of 2007. After that, Dr. Wazani is
going to step down. TAMEER targets all the segments in its development of real estate. Its mission
also includes a stringent focus on pricing. TAMEER
wants to build properties, but also build them at a
relatively affordable rate pertaining to that segment.
TAMEEER is looking forward to expanding its markets to the Middle East and North Africa.
NUMBER OF TRADED DAYS: 226
FINANCIAL RESULTS FOR THE COMPANY
Revenues
Expenses
Assets
Non-Current Assets
Liabilities
LT Liabilities
Owner’s Equity
2006
2007 H1
36,201,392
2,378,809
2,164,243
1,372,315
2777,380,133
279,972,343
233,032,344
16,988,909
48,552,652
57,475,094
700,000
550,000
228,827,491
222,497,249
2006
2007, H1
13.12%
-0.92%
82.91%
-
83.87%
-
17.50%
20.53%
12.22%
25.83%
4.87%
0.30%
13.05%
0.85%
FINANCIAL FORECASTS FOR THE COMPANY
Return On Equity
Profit Margin
Net Profit Before Tax / Operations
Liabilities / Total Assets
Liabilities / Shareholders Equity
Current Ratio
Operational Revenues / Total Asset
Tameer started operations in 2005. The 2006 positive revenues were mainly reflective of the reevaluation of real
estate assets and interest income on deposits. This, however, will not be the case in 2007 as there are no projects
maturing in the coming period. As to re-evaluation real estate in 2007, this may not give the same effect as it did in
2006. The projects that Tameer set forth with are expected to start completion in 2008 (Andalucia and Garden Villas).
The Giza project is their biggest project to date and tops $1 billion upon completion. This project has an anticipated
completion date of 2012.
22
REAL ESTATE DEVELOPMENT COMPANY
SHORT NAME:
TICKERS:
REAL ESTATE DEV
OVERVIEW:
REDV, REDV JR, REDV.AM
CLOSING PRICE:
HIGH PRICE:
LOW PRICE:
AVERAGE PRICE:
JD 1.77
JD 2.45
JD 1.53
JD 2.02
CLOSING VOLUME:
HIGH VOLUME:
LOW VOLUME:
AVERAGE VOLUME:
78,630 SHARES
4,115,936 SHARES
30,352 SHARES
257,266 SHARES
Real Estate Development Company was registered in
1995 with a paid up capital of JD4 million. The company raised its capital to JD 100 million in 2007. The
company is focused on real estate investments as
well as real estate development. The company has
two subsidiaries, Iwan Reconstruction (100.00%)
and Paradise Towers Investment Company (25%).
Recently, the Arab East for Financial and Economic
Investments plans to buy stake in REDV. The company offered to buy 37 million shares (37%) for JD
86.95 million. The company’s major projects are:Paradise Tower in Abdali, REDV Commercial Building in Amman, DHCC Office Building in Dubai’s
Healthcare City.
NUMBER OF TRADED DAYS: 206
FINANCIAL RESULTS FOR THE COMPANY
Revenues
Expenses
Assets
Non-Current Assets
Liabilities
LT Liabilities
Owner’s Equity
2006
2007 H1
540,574
135,936
376,002
447,137
78,807,036
92,826,945
63,807,561
77,791,346
18,631,193
33,369,889
10,000,000
10,000,000
58,175,843
55,457,059
2006
2007, H1
0.16%
-4.89%
32.48%
-
33.44%
-
24.26%
40.26%
32.03%
67.39%
FINANCIAL FORECASTS FOR THE COMPANY
Return On Equity
Profit Margin
Net Profit Before Tax / Operations
Liabilities / Total Assets
Liabilities / Shareholders Equity
Current Ratio
Operational Revenues / Total Asset
1.50
0.55
1.43%
0.15%
REDV has several projects under development, locally and abroad. REDV is looking forward towards its major project, the Paradise Towers to be completed in 2010 as the Abdali project will be ready. As is the case with all realestate developers, project completion years mean high revenues.
REDV owns 100% of Iwan Reconstruction, and 25% of Paradise Towers Investment Company. Global Investment
House is a Major Shareholder in REDV.
23
UNION LAND DEVELOPMENT COMPANY
SHORT NAME:
TICKERS:
UNION LAND DEV
OVERVIEW:
ULDC, ULDC JR, ULDC.AM
CLOSING PRICE:
HIGH PRICE:
LOW PRICE:
AVERAGE PRICE:
2.15 JD
2.65 JD
1.61 JD
2.12 JD
CLOSING VOLUME:
HIGH VOLUME:
LOW VOLUME:
AVERAGE VOLUME:
169,780 SHARES
3,073,458 SHARES
41,387 SHARES
447,089 SHARES
Union Land Development Company was established
in 1995 as a result of a merger between Jordan Gulf
Company for Real Estate Investments and Petra for
Projects and Equipment Rentals. In 2005, the company raised its capital from JD 6,964,285 million to
JD45 million. The company engages in the development of real estate properties in Jordan. It purchases, develops, and reclaims land and real estate;
industrial, agricultural, and tourism projects. The
company’s major projects are: Al Abdali (Paradise
Towers), Zara Chalets (Dead Sea).
NUMBER OF TRADED DAYS: 226
FINANCIAL RESULTS FOR THE COMPANY
Revenues
Expenses
Assets
Non-Current Assets
Liabilities
LT Liabilities
Owner’s Equity
2003
2004
2005
2006
2007 H1
437,123
581,642
5,144,910
1,598,643
5,449,522
62,762
410,402
3,965,502
891,896
2,377,243
5,748,545
10.273,982
50,759,809
54,046,624
63,322,597
3,971,242
9,.459,716
30,379,422
51,784,585
61,751,019
396,474
1,461,010
489,146
1,720,879
8,481,142
0
0
0
0
0
5,169,071
8,812,972
50,270,663
52,325,745
63,322,597
2003
2004
2005
2006
2007, H1
-5.93%
25.70%
34.59%
0.13
9.44%
2.96%
35.62%
35.62%
14.22%
16.58%
0.56
5.66%
4.44%
25.48%
25.48%
0.96%
0.97%
41.66
10.14%
0.00%
0.02%
0.01%
3.18%
3.29%
1.31
2.96%
4.94%
48.52%
47.85%
13.39%
15.46%
0.19
8.61%
FINANCIAL FORECASTS FOR THE COMPANY
Return On Equity
Profit Margin
Net Profit Before Tax / Operations
Liabilities / Total Assets
Liabilities / Shareholders Equity
Current Ratio
Operational Revenues / Total Asset
The company has sold land in 2005 which boosted their revenues by 784.5% compared to the year 2004. Moreover,
the company generated JD4,808,960 in revenues from selling of land during the first half of 2007.
Union Land Development Company reported JD1.6 million in revenue for the year 2006, showing a decline of %68.9
from the previous year. Profit margin of the company for 2006 was %0.02, down from 25.48% in 2005. Return on
Equity on the other hand rose to reach 6.5%, in comparison to 4.6% last year.
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THE INVESTORS AND EASTERN ARAB FOR INDUSTRIAL AND REAL ESTATE INVESTMENTS
SHORT NAME:
INVEST ESTATE INDUS-
TICKERS:
TRIES
IEAI, IEAI JR, IEAI.AM
CLOSING PRICE:
HIGH PRICE:
LOW PRICE:
AVERAGE PRICE:
2.96 JD
3.47 JD
2.45 JD
2.88 JD
CLOSING VOLUME:
HIGH VOLUME:
LOW VOLUME:
AVERAGE VOLUME:
61,700 SHARES
947,088 SHARES
20 SHARES
81,512 SHARES
OVERVIEW:
IEAI was established on 22 August 1995 as a LLC
with an paid up capital of 1 million Jordanian Dinars.
On 8th September 2002 the company changed its
legal form to a a public shareholding company with
an authorized capital to paid up capital of 13 million
Jordanian Dinars. The par value for the IEAI shares is
JD 1/ share.
The Company is a subsidiary to United Arab Investors Company (UAIC) as it owns 56% from the company’s total equity and the consolidated financials of
UAIC contains the financials of IEAI and both companies are listed at Amman stock exchange.
NUMBER OF TRADED DAYS: 218
FINANCIAL RESULTS FOR THE COMPANY
2004
Revenues
Expenses
Assets
Non-Current Assets
Liabilities
LT Liabilities
Owner’s Equity
2005
2006
2007, H1
7,500
78,746
2,941,971
50,492
18,404
174,528
1,582,172
2,236,549
13,692,888
34,826
49,800,201
48,848,854
3,555
13,175,060
17,428,475
15,743,251
893,951
1,394,450
19,498,279
20,782,391
0
0
0
0
12,692,888
33,431,931
30,301,922
28,066,463
2004
2005
2006
2007, H1
0.42%
6.53%
6.98%
15.31
0.05%
-0.91%
4.00%
4.17%
15.53
6.18%
-9.86%
39.15%
64.35%
1.66
5.90%
-4.53%
42.54
74.05
1.59
0.10%
FINANCIAL FORECASTS FOR THE COMPANY
Return On Equity
Profit Margin
Net Profit Before Tax / Operations
Liabilities / Total Assets
Liabilities / Shareholders Equity
Current Ratio
Operational Revenues / Total Asset
The company’s revenues have increased by 3,636% in 2006 from JD78,746 in 2005 to JD2,941,971 in 2006. The main
reason behind this significant increase is the selling of land the company held.
IEAI is currently developing Al-Mushatta Industrial City near the Airport. The city compromises of 4.4 million square
meters, laid out with state of the art infrastructure in compliance with the International Industrial Zone Standards.
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JORDANIAN REAL ESTATE COMPANY FOR DEVELOPMENT
SHORT NAME:
JORDAN REAL-ESTATE
OVERVIEW:
CLOSING PRICE:
HIGH PRICE:
LOW PRICE:
AVERAGE PRICE:
1.78 JD
2.04 JD
1.49 JD
1.73 JD
The Company was established as a Public Limited
shareholding Company under law No.(22) for year
1997 and was registered at the Public Shareholding
Companies registration under registration No.(361)
on April 3,2005.
CLOSING VOLUME:
HIGH VOLUME:
LOW VOLUME:
AVERAGE VOLUME:
52,425 SHARES
950,923 SHARES
2,854 SHARES
102,862 SHARES
The Company had been started its activities on August 8,2005 with a number of shares outstanding
15,000,000 at par value JOD 1.The Company is listed
in Amman Stock Exchange.
TICKERS:
JRCD, JRCD JR, JRCD.AM
NUMBER OF TRADED DAYS: 226
FINANCIAL RESULTS FOR THE COMPANY
Revenues
Expenses
Assets
Non-Current Assets
Liabilities
LT Liabilities
Owner’s Equity
2005
2006
2007 H1
345,060
2,665,858
4,524,075
223,106
268,443
154,678
18,923,733
35,768,212
39,888,346
12,528,906
24,828,814
30,500,556
3,759,747
3,448,959
4,802,043
0
0
0
15,163,986
32,319,253
35,068,303
2005
2006
2007, H1
0.78%
9.69%
13.24%
34.32%
86.27%
96.70%
34.32%
86.27%
96.70%
19.87%
9.64%
12.04%
24.79%
10.67%
13.69%
FINANCIAL FORECASTS FOR THE COMPANY
Return On Equity
Profit Margin
Net Profit Before Tax/Operations
Liabilities/Total Assets
Liabilities/Shareholders Equity
Current Ratio
Operational Revenues/Total Assets
1.70
3.17
1.95
1.82%
24.37%
11.57%
JRCD’s revenues increased substantially to reach JD2,665,858 in 2006 compared to JD345,060 in 2005, an increase of
672.5%. During the first half of 2007, the company’s reported revenues reached JD4,524,075. This increase in revenues is mainly attributed to the selling of land the company was holding.
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