By Shane McGinley
Real estate arm of Palestine Investment Fund looks to lure Gulf investors in bid to tackle severe housing deficit
The Palestine Investment Fund (PIF) is in talks with Gulf investors in a bid to attract them to invest in its housing projects in the West Bank, the deputy CEO of the fund’s real estate arm has said.
PIF’s first commercial project, the Ersal Centre, is a joint venture between the Amaar Group, PIF’s real estate unit, and Saudi-based The Land Holding Company.
Located in the West Bank area of Ramallah-Al-Bireh, the project will accommodate around 800,000 residents from the West Bank and Jerusalem.
Phase one is slated for completion in the next two years and Amaar is in talks to lure additional Gulf investors into the $400m development.
“Right now the success we have had is selling development rights to local institutions. But we are here also hoping to attract some direct foreign investors,” said Amin Issa Ismail, deputy CEO of the Amaar Group. The unit was established in 2009 with an initial capital of $220m.
“We are talking to a few [Gulf investors]. The Palestine Investment Fund has been very successful at attracting foreign investors into Palestine.”
Palestine has been economically crippled thanks to Israel’s closure policy, unemployment and massive infrastructure damage. According to a recent United Nations report, per capita GDP remains 30 percent lower than it was 10 years ago.
The country is suffering a severe housing shortage and is thought to need around 45,000 units per annum over the next decade.
The PIF has said it plans to invest $2bn in Palestine’s real estate market in Palestine over the next five years. In response, Amaar has established the National Affordable Housing Programme (NAPH), which is tasked with building an initial 30,000 units.
“Housing is an area where even a smaller developer can compete and do well as there is a real need and a real demand and a real shortage of units,” Ismail said.
NAHP began development of the Al Reehan project in December last year. Located in the West Bank city of Ramallah, Al Reehan will be Palestine’s first self-contained community to include 200 housing units, schools, parks, landscaped grounds, retail centres and a health complex.
“Phase one has been extremely successful and the majority of buyers are local Palestinians,” Ismail said.
Construction of the first 285 units in phase one is 60 percent complete.
The agency’s second community will be a 1,000 unit community near the city of Jenin in the northern West Bank, and it is “hopeful to announce one, possibly two more [deals], by the end of the year,” Ismail said.
Average unit prices in Al Reehan and Al Jinan start from $60,000. However, with per capita GDP remaining low, Amaar and the PIF have established a loans company to secure financing for would-be home owners.
The Affordable Mortgage and Loan Company, or ‘Al Amal’, offers loans serviced by Cairo Amman Bank and the Bank of Palestine.
The $500m scheme offers mortgages spread across up to 25 years, and is backed by the International Finance Corporation, a unit of the World Bank, and the Overseas Private Investment Corporation, a US agency that helps US companies invest abroad.
“I think owning a home has become more than a dream for many Palestinians. It is a reality today,” said Ismail.
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