With an extensive background in general contracting, civil engineering, and construction management, the CEO of Abdali Investment & Development PSC Jamal Itani is a man of many colors. As the former president of the Council for Development and Reconstruction (CDR) in post-war Lebanon, Itani helped rebuild the Lebanon we know today, as well as aided in securing all finances for the Lebanese government. Now based in Amman, Itani heads the largest development project Jordan has ever seen. Executive sat down with the CEO for his insight on Abdali’s creation of a new downtown in the heart of Amman.
E How would you describe Abdali’s ownership structure?
Abdali is a pioneer in the private-public partnership (PPP), a partnership that was born between Mawared (National Resources Investment & Development Corporation) — the independent state-owned corporation — with the Hariri family, presented by Sheikh Bahaa Hariri through his company, Horizon Holdings. The idea to regenerate a downtown area for Amman came up in 2002 between the late Prime Minister Rafik Hariri and King Abdullah II. The army owned a piece of land that is demographically well located in the center of Amman and at perfect proximity to all the major hotels, banks, businesses, residential areas and the civic center of Amman that incorporates the Justice Palace, the Court and the renowned King Abdullah Mosque.
The formula was as follows: Mawared provided the land, Sheikh Bahaa Hariri provided the finances, and then they created the company Abdali Investment and Development PSC in 2004. The idea then was translated into a master plan that called for a subdivision of approximately 53 pieces of property, with a total of 72 buildings to be developed, sold to different developers.
Now, each developer has to develop his own property within our guidelines. As master developers, we naturally placed general and particular conditions our developers have to abide by. These conditions were defined for every piece of property to ensure homogeneity and high quality state-of-the-art buildings. Smart buildings, if you may.
Some of the things that are in the conditions are the building height, the building shape, the footprint, the façade, the mix between the stone and the curtain wall, and other details of the building. So they have to get our approval on the design, before they move on and start the construction… Every step of the way they have to get our approval.
So the master plan was developed and all of the land was sold, and we decided to keep 25% of the total built-up area, which is 1 million square meters of Phase One (approximately), to develop on our own, namely the Abdali Boulevard and the Central Market Place. In 2006, KIPCO through its subsidiary company URC-Jordan (United Real Estate Company-Jordan), joined Abdali and bought 12.5% shares of Abdali — split in half by Mawared and Sheikh Bahaa Hariri — so now Mawared owns 43.75%, Sheikh Bahaa Hariri owns 43.75%, and URC Jordan owns 12.5% of the Abdali company.
On top of this, URC and Abdali also joined hands in developing the boulevard and the mall, where Abdali owns 60% of the boulevard and URC owns 40%, and in the mall it is the opposite: URC owns 60% and Abdali owns 40%. We are developing both of them together. We intended to keep and develop the 25% of the project because we emphatically believe in the economy of this country and of course the success of the Abdali new downtown. We believe that the potential is still young. There is still great potential coming up in the country and we definitely want to be a part of it. We’re not here to sell the land and leave.
E How would you explain the concept of Abdali? What was the inspiration for the Abdali downtown project?
As I said earlier, the inspiration came from His Majesty King Abdullah II and Sheikh Rafik Hariri to regenerate the downtown of Amman. It is a unique project because of many things — first because of its location, second because of its various unique and strong partnerships, and also because of the master plan that was created for the project taking into consideration the traditional architecture of the country, the traditions of the Jordanians, alongside with the modernization of the new technologies, the new buildings, the new architecture, etc.
And this is why we were successful in attracting big international names in architecture, such as Norman Foster (UK), Architecture Studios (France), Norr (Canada); along with the top local Jordanian architectural firms, such as Symbiosis, Consolidated Consultants (CC), and others. So one will see a mix that is not far from the tradition of Jordan yet has put Jordan on the map of contemporary architecture.
On top of that, we intended to be very unique in the infrastructure put in place in the project. For the first time in Jordan, we laid down fiber optics cables for the best technologies in telecommunications, and have created a company for that specific purpose, in order to support sustainability of this project.
We have also introduced district energy through a joint venture with Tabreed. This is very important as we were very careful in improving the environmental impact of the project and at the same time realizing that energy is becoming extremely expensive, and thus we worked hard on incorporating this technology into the project in order to reduce the consumption of energy. By introducing district cooling and heating, energy consumption is reduced by 50% approximately. This is also not to mention reduction of the gases and the CO2 emissions. Aesthetically, this has eliminated the need for chillers on the rooftops, allowing us the advantageous use of all of the rooftops for restaurants, swimming pools, and greenery, etc.
E What is your future vision of your company’s projects? How do you think this will affect Amman?
First of all, the future vision of Abdali is to expand, definitely. We have made the first move by expanding into Phase Two of the project, which we launched at the end of last year. After the success of Phase One, it became the natural thing to expand through Phase Two and make the project more cohesive and more integral. As to the future vision on a larger scale, other projects in the region, and in Jordan, are possible and as a matter of fact we are constantly being offered to partake in them because of the experience that we have now. However, this expansion is still too early to discuss; suffice to say that it is in the back of our minds
As for how the project will affect Amman, the project itself has been and will be of extreme impact on the economy of Jordan from a socio-economic point of view and FDI point of view. With regards to the former, during Phase One alone it will have created over 10,000 sustainable job opportunities, not to mention the employment opportunities during the creation of the phase of around 15,000 at its peak. In terms of FDI, we have attracted approximately $1 billion from the UAE investors, and another $500 million from Kuwaiti investors, and another $1 billion from Saudi investors. So this definitely has a direct impact on the Jordanian economy.
E What is the strategy you are implementing for your projects?
Our strategy is to finish building the new downtown of Amman with the highest quality of buildings and facilities, on time, and at competitive prices. We are not here to really to — if you allow me to say this — to swat the real estate industry, but on the contrary, with our project we have really calibrated the real estate industry in Jordan and assisted it in the first steps of growth to be on par with the rest of the region.
From the start, we purposely did not sell our land at very high rates, thus allowing developers to sell their end product at very competitive prices. Mind you, it is worth noting that internationally the cost of land is usually 50% of the cost of the project. In Jordan however, the cost of land is much below this, no more than 30% of the overall project cost.
Generally, the trend we are witnessing now is an increasing rise of projects’ cost, becoming more and more expensive by the year, but in Jordan this trend has still not quite caught up with the rest of the region, specifically with the increase of land prices.
E Do you expect a correction to happen, within Jordan, within the prices perhaps?
Prices have to increase, yes. It has already started, however, up until now not quite in a big scale, because you haven’t seen big investors coming in strong yet to develop the type of projects, in the regional magnitude that will result in such an impact. But again, as I mentioned earlier, the market is still young and is growing steadily.
E In your opinion, what is the need for this kind of project? Is it a social, demographic need, a need for a new lifestyle? What kind of people will be living in the residential sections of these mix-use developments? How would you describe the standard of living of your projects?
It’s a combination, definitely. Amman is a beautiful city that has beautiful weather for 10 months of the year. Yet, Amman does not have a modern urban downtown that can accommodate all the needs of the people from residential to high-tech offices, to retail. So, we had in mind that we wanted to do something that is complementary to everything in it to catapult it to urbanism. So that you can live, work, entertain, and shop at the same time, in the same central location. This will definitely alter the lifestyle of the Jordanians, indeed the city’s identity. The new downtown is very urban, accommodating new styles of commerce, residences and retail.
The whole idea behind it is to provide a modern state-of-the-art destination for businesses to induce productive and effective work atmospheres; a destination where shopping becomes in itself an open destination, rendering the traveling around from point A to point B finite, as is the current situation in Amman, where one has to travel from one location to the other in order to complete their shopping experience.
And finally, it is to be a destination that allows residents to have accessibility to their every day needs and much more. For the first time Jordanians will have an urban downtown area in the true sense of the meaning, where they can go to spend the whole day and have a plethora of activities at their disposable without the need to commute outside that vicinity. So yes, it definitely satisfies both the social and economic needs of a growing city like Amman.
E What are the current issues and concerns that Abdali faces?
Well, there are very few of them. You know that you are dealing with approximately 28 developers, and some of them are not used to the quality that we are implementing and are enforcing, so we have to take them by the hand and walked through the development process step by step in order to ensure the desired quality and performance is met.
In a country that has not experienced such colossal projects, delivery time is of essence, because everybody here thinks that ‘Oh ok, this project is set to be done in 3 years, inshallah in 10 years it will happen.’ No, we want it to happen in due time, as promised, but with the quality that we have assured the public. So this is the first thing that we faced: the scarcity of contractors with experience of similar large magnitude high end projects, especially when discussing the scope of work to be done on such a project as ours.
Bringing in the international investors that were keen on being part of this unique project to the city was a great advantage, because with them came the international knowledge that comes from their sophisticated and long experience in construction and development in the region of similar scale developments. Their presence has steepened the learning curve for Jordanian developers and others alike due to the vigilant aim of Abdali of creating high-end quality construction.
Moreover, this transfer of skills and know-how is exactly how the standards have been set much higher. In fact, we are really happy with the support of the government in paving the way. The government really understands the importance of this project, and they are putting all efforts to support us, from the municipality to all the ministries and all related government entities, they are very supportive to the project.
E So are the developers having trouble with the regulations that you have in place?
As with anything so new, grasping the new technology, regulations etc, is something of a feat at the start. For instance, we started the high rise building designs three years ago. At that time of design finalization, we were working to the guidelines of the existent civil defense law. However, by the time the building designs of Abdali were complete, and sent for final approval from the Civil Defense in order to proceed, new regulations had been put in place. So we were faced by the introduction of new laws and guidelines for construction of high rise buildings that the government wanted to implement. And this is a perfect example of how the government has been supportive and backing of this project. The new civil defense law required helipads to be present on every tower, amongst other tough restrictions on towers. Due to the fact that most of the developers had already finalized their designs, it would have been prohibitive in many ways to redo the complete designs again. Therefore, we raised our concern to the authorities, as we had been given approvals on these designs before the law was issued. They were very cooperative and approved for us to use the old law for the Abdali project Phase One. So again, some delays have been underway, but at the end of the day the government entities are very supportive to the project.
E How would you differentiate the market in Jordan from other markets in the region?
Other markets in the region have to be separated; the Gulf is one, and the rest of the Levant is another. The Gulf is a story by itself — the oil prices and the excess cash flow — this is speeding up the development of the countries there at a pace nobody can catch up with, really, simply because of the resources. Even the Gulf countries are caught up by the human resources, and the contractors’ resources, and the material resources… they can’t catch up with their development. Here it is a different story. I think the growth in Jordan is healthier and more sustainable than high-rising economies. I think a lot can be done to also attract more investors and make Jordan a thriving business and tourism hub in the region — Jordan has a lot of uniqueness in it: the location of Jordan on the map, its proximity to Iraq, to Lebanon, to Syria, and the peace agreement with Israel has truly made Jordan a safe haven for investors. Also, laws and regulations are very defined here and are respected, so again this is something extremely important and encouraging for investors. Still, I think a lot more can be done to attract investors and a little flexibility on some laws and regulations can attract more investors. Some things need to be worked on in that regard. But again, the goal can be, or should be, slightly higher… But I’m sure by next year you will see the growth catching up with the rest of the region; there is no doubt about this. The demand is there, and it is very big.
E Obviously the role of the state is quite proactive towards development in Jordan. How do you see this culture spreading out through other entities, in quasi-developmental organizations that you are dealing with on a day-to-day basis? For example, Amman for the last 50 years has been mostly two to four floor buildings of white stone. By giving the Jordanians high-rises designed by internationally acclaimed designers, how are they adapting to this whole new culture that you brought with you Jordan?
I’ll be frank with you: it’s not easy to introduce a new concept of life style to any society. High-rise buildings are a new concept for the country, for both the public and the governmental authorities. The former is challenging, as the public still cannot quite fathom the extent of the impact the project will have physically, socially or economically. The latter, in terms of the government authorities, took us a lot of effort at the beginning of our journey. We had to convince them that the master plan for an urban project such as Abdali calls for high rises. At the time, though, ‘50 floors high, 210 meters high’ was unheard of. However, it became clear that it was unavoidable and is actually needed in Jordan, and can be done in an effective and productive manner.
At this moment in time, I can say that we, as Abdali, still have a major role to play, and we can’t do it alone. I believe all the developers have to team up together to start educating the people on the new lifestyle that is unfolding in Jordan.
You’re absolutely right, the majority of people live in a three-four storey building, and they were definitely shocked and possibly in awe, when they saw high-rise residential 35 floors high. And most intriguingly is that we question the high-rise phenomenon, yet developers sold the top floors right at the beginning, and at very high rates… I think also what helped is the experience that Jordanians have got from the Gulf and in the international arena where they live in high rises in the Gulf, Europe, or America… so now when someone wants to buy a home in Amman, and he finds a high rise of 35 floors, he won’t mind because he is used to living in a 35 or 45 floor high rise building in Dubai and will therefore seek something similar to buy in his home country.
E We’ve talked about prices, and foreign direct investment. What type of returns on investments are projects like Abdali giving back to investors?
A simple thing will give you the indication: People are talking so much about the returns in Dubai… astronomical returns in Dubai. One can figure it out for oneself: $1 billion from Dubai is invested in Abdali, what does that tell you? It tells you that serious returns are happening in Amman, protected returns and, moreover, here you have freehold ownership status, while this is not the case in the Gulf states. There you basically don’t own the building or the apartment that you buy but instead you have a long lease. Returns are definitely competitive or even better than many other countries. But they are certainly and extremely competitive in Dubai and the Gulf region.
E Successful projects like Solidere, for example, which more or less is a similar project to what’s happening with Abdali, have also decided to also give it a try in the GCC with Solidere International. Is Abdali aiming at similar strategies?
Well, I’ll tell you frankly, every time we go to Dubai or to Abu Dhabi or to Saudi Arabia and those exhibitions, we are offered so many projects based on what these markets are witnessing with what we are doing with our project, the Abdali downtown.
The quality is really something that we are so proud of, and you can’t find it everywhere. Really, even in some mega-projects that are happening in the Gulf, you don’t see quality projects. So we have been offered a lot of opportunities, and it is in the back of our mind.
Nevertheless, at the moment, we are focusing on making this project successful and happening. We want to see it growing above ground and operating. In the meantime lots of projects are in the back of our mind. What I will tell you is that it’s not an immediate plan to go outside Jordan, but definitely the appetite is there.
E What CSR initiatives do you have in place and how are you giving back to the community?
In fact, a lot. We believe that we can’t be this big in the country without contributing back directly to the community — to the community around the project first, and to the community of Amman next, and then to the community of Jordan. And for that reason, we have designed several initiatives for the CSR under the umbrella of ‘Ruyatuk’ that are both community based and academic based. Abdali’s success greatly depends on its relation to the greater community. We have made it a priority to address the needs of Amman and take into consideration the social and environmental aspects of its development. The Ruyatuk program will bring together all the activities sponsored by Abdali with the theme “Let your vision come to life.”
Abdali aims to provide youth with life skills that encourage them to become active in the society they live in. In addition to harnessing their talents, sustain their enthusiasm and realize their potentials, through providing them with the adequate opportunities to gain valuable experience and become active members of their respective communities, thus allowing them to compete in the emerging labor market.
E Overall, how do you see Abdali’s role in Jordan’s future?
The Abdali project is certainly going to change the lifestyle of the Jordanians and I think it is something that will be the pride and joy of the Jordanians in the future.
