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Saudi-based developer The Land Holding is expanding across the Middle East and Europe. However, its most ambitious venture by far is the $250m project currently planned for war-stricken Palestine. CEO Karim Jabbour explains why he is prepared to go where many others fear to tread.
At first glance, the land holding (The Land) might appear to be like any other Gulf real estate developer. It is expanding across the Middle East and even Europe; it is busy promoting a portfolio of ‘unique' and ‘iconic' developments; it has a string of plush offices across the GCC.
Yet while the boldest of its peers have dared to enter untested markets such as Libya and Yemen, The Land has gone a significant step further, becoming the Gulf's first private developer to venture into war-torn, politically-unstable and economically-crippled Palestine.
"It's a project of its kind because this is the first time a foreign investor has come in to a country like Palestine, and taken the risk to invest and develop in it," says Karim Jabbour, CEO of the Saudi-based developer. "This is who we are - we calculate risk but we also take risk."
The project, worth $250m, is being developed in partnership with the Palestinian Investment Fund (PIF). It is located in Ramallah, in Al Irsal, and will be spread across a land area of 50,000 sq m. Al Irsal Centre will have a total built up area of 250,000 sq m, including residential, hotel, commercial, retail, and office spaces.
Jabbour says the intention is to sell and develop a number of the plots. Several plots will be sold to strategic investors, possibly government companies, while apartments, offices and retails spaces will be put on sale for interested investors and buyers.
Al Irsal Centre aims to enhance the economic and social life in Ramallah, Al-Bireh and most of the central region of the West Bank. The project is expected to serve more than 800,000 Palestinians.
The instability of politics in the Middle Eastern country has not deterred the company from entering the market, and Jabbour himself is bullish.
"You have ups and downs but at the end of the day you need homes, you need a decent life in Palestine and we believe that the country deserves a project of this kind so we invested in it," says Jabbour, who adds that the company's investment in Palestine was not focused on returns, but was rather a "strategic investment".
It may seem a strange time to be talking about ‘strategic investments' in the real estate sector. Companies across the GCC are beginning to feel the effects of the global credit crunch as liquidity is drained out of the markets.
Funding real estate projects is not getting any easier, and as banks are holding on to their cash so the region's real estate giants are finding it increasingly difficult to find the money with which to build their latest multibillion-dollar developments.
And yet amid this chaos The Land is not only taking the risk to invest in Palestine, but is also working on a new Dubai project.
The company only entered the UAE market in July, but immediately bought up plots in Dubai Waterfront, the world's largest coastal development located in the emirate's Jebel Ali area.
The company has also announced the signing of an initial agreement with Dubai government-owned master developer Nakheel.
The joint venture, which was inked during property show Cityscape Dubai 2008, will see both companies jointly undertaking the development of The Land's project at Dubai Waterfront.
On completion, the Waterfront will be twice the size of Hong Kong Island and will add an extra 70 km to Dubai's coastline.
The Land's project, a 50-storey building called Terra, is currently in the design phase and is estimated at a value of $925m.
"Our portfolio will not be far from 8 million sq ft of built-up area to be developed and not far from$5.44bn, if we develop it and sell it," says Jabbour.
Founded in 2004 by Saudi and Jordanian investors headed by The Al Rajhi Investment Group, The Land also has real estate projects in Qatar, Jordan and Bahrain.
It is also gearing up for the launch of a $1.6bn luxury residential complex in Saudi Arabia next month. The project, Ajmakan, will up the company's Saudi portfolio to approximately $4bn-$4.8bn.
Ajmakan will rise in one of Saudi Arabia's most central areas, in close proximity to the Diplomatic Quarter and King Saud University and other governmental sites, overlooking the historically-known Wadi Hanifa.
Construction is scheduled to begin immediately following the completion of all licence procedures. In addition, other plots of land are awaiting development.
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