THE BUSINESS CAPITAL OF THE LEVANT
Jordan’s position as a gateway to the wider region enables investors and entrepreneurs to access a market of more than 1 billion consumers.
As one of the most dynamic countries in the Middle East, Jordan – known as the business capital of the Levant – has emerged as a successful country in terms of its reforms in education, health, privatisation and liberalisation. Over the last few years good governance has laid the foundation for attractive public-private partnerships and foreign direct investment.
With relatively well-developed basic infrastructure and business-friendly facilities, Jordan’s economy makes an attractive investment proposition, which the government is working to strengthen through investment promotion laws.
Despite adverse regional developments, particular the Syria and Iraq crisis, GDP growth in Jordan is forecast at 3.5% in 2015 and 3.9% in 2016 “due to stronger private consumption and investment, in part driven by lower oil prices and investment projects,” says the World Bank.
According to experts, Jordan’s real estate sector looks positive due to internal demand coming from its young population, along with external demand based on Jordan being the gateway to the Levant region. With high levels of trade freedom and investment freedom, Jordan continues to witness market openness. The increased demand for qualified labour, coupled with growing international competition for resources, has forced the country to remain flexible and become more resourceful.
Looking closely at what 2015 will offer Jordan, the World Bank says that by creating conditions for increased private investment and improving competitiveness will further drive growth in all sectors in the country to generate employment and reduce poverty.
As one of the most open economies in the region, Jordan is relatively well integrated with its neighbours through trade, remittances, foreign direct investment, tourism, and has especially strong links to the GCC economies. “Jordan’s relative stability in a tumultuous region is an advantage which the country could further build upon to enhance its position as a hub in key areas such as tourism, regional trade and FDI,” says the World Bank.
According to Jordan’s Investment Board, a national investment promotion agency, macro-economic fundamentals are sound and leading indicators to point to continuing growth in 2015. “Careful planning and policy reforms, a strong economy, and the creation of ideal conditions ripe for business have all led to a surge in foreign investment in Jordan.”
An attractive economy is contributing to Jordan’s favourable investment landscape, especially in real estate. According to Jordan’s Investment Board, over the past five years the country’s real estate sector witnessed copious architectural structures and large development projects ranging from residential, commercial, tourism and industrial estates.
“There are fundamental dynamics that fuelled demand for real estate in the Jordanian market. The vibrant growth of the Jordanian economy shaped the market for a more diversified real estate sector,” says the board.
Abdali Investment and Development, based in Jordan, agrees. According to the group one of the country’s greatest quality is the safety and security despite its position in a turbulent region. “The citizens of the neighbouring countries consider Jordan as a safe haven and accordingly invest in the Jordanian real estate market. The country’s geographic location in the middle of the MENA region places it as a doorway to multinational companies to invest in the region and more specifically in the Levant,” says Abdali.
In addition, the country’s open economy provides a favourable business climate at low risk along with a stable political situation.
According to a report by Oxford Business Group (OBG), tourism revenues in Jordan rose in 2014 and with the unveiling of a new arrivals terminal at Aqaba International Airport and plans for a national rail network, these are expected to rise further in the coming years.
“All in all, continued political stability, large scale transportation developments, the availability of a young, educated workforce and government efforts to reduce the fiscal deficit and the country’s reliance on energy imports should ensure Jordan maintains its strong position in the region,” says the report.
REAL ESTATE TRENDS
A number of major mixed-use real estate developments are currently underway in Jordan, both in Amman as well as in Jordan’s Red Sea destination Aqaba. According to the OBG’s Jordan 2014 report, these projects demonstrate Jordan’s ability to attract foreign investment even in times of instability.
Rising land and construction costs over the past few years have led to a steady increase in residential sales prices which in some of Amman’s areas were up as much as 15% y-o-y in the first quarter last year compared to 2013.
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