SUDAN Property type SECOND Quarter | 2007

c o l l i e r s i n t e r nat i o na l | M E N A RE G IO N

Amman Real Estate Overview

M A RKET RE S E A R C H | f o u rt h Q ua rt e r | 2007
Syria
Iraq

Amman Economic Highlights

Egypt JORDAN
Saudi Arabia
ECONOMIC Market Indicators
2006 2007
Actual Forecasts
GDP: US$ 16bn
Tourism: 6.6mn visitors
Current US$ 2.35bn
Account: (deficit)
Population: 6.1mn a tenant to occupy a property indefinitely at the same rent even after the end of a lease term
Unemployment: 14.1% • Attractive mortgage packages with low interest rates and longer payment schedules have also
Inflation: 5.7%
FDI: US$ 3.1bn
• Traditionally one of the most stable Middle Eastern states, attracting Palestinian, Iraqi and
Lebanese settlement and investment
• Position as a net oil importer, with focus of economic activity falling on less energy intensive
industries, such as tourism
• Member of the World Trade Organisation since 2000, with a free trade accord with the US
and an association agreement with the EU in place
• Projected growth in GDP expected to continue within the range of 5-6% for the medium
term, hampered by a considerable government budget deficit
• Rapid acceleration in cost of living, outstripping income growth and impacting on inflation
rates
• Influx of wealthy Iraqis into Amman since 2003 have contributed to a recent boom in real
estate prices
• Landlord and Tenant Law No 11 amended in 2001, repealing an earlier provision allowing
– thereby promoting investment in both office and residential space
boosted real estate investment
• Jordan’s foreign real estate investor profile is composed primarily of displaced Iraqis, and
expatriates from Europe and the GCC purchasing holiday homes.
• Gateway to Iraq for foreign companies, UN agencies and NGOs, with 30-50 new organisations
expected to establish offices in the capital over the next twelve months
• Major forthcoming mixed-use developments include the US$ 1bn Abdali Urban Regeneration
project in the city centre, the 2500 hectare Zarqa Garden City master-plan and the US$1bn
Royal Metropolis project

Immigration and
economic growth
combine to fuel
occupier-led real
estate boom in the
south and west of
the city

www.colliers.com

Colliers International 
 Amman
Development activity
will continue to intensify,
although it will become
increasingly stratified
between developments
targeting low- income
citizens and those targeting
the higher- income
demographic and non-
resident Jordanians
initial yields
Locations
Abdoun 8.0%
Airport Road 10.0%
Jabal Amman 9.0%
Shmeisani 8.0%
Dabuq 9.0% villa rents by location
Gardens 7.0%
Rabiyah 10.0%
FORTHCOMING SUPPLY
Project Units
Royal Village (2008) 1,038
Abdali Project (2010) 1,500
Greenland Project (2008) 880
Al Jiza City (2012) 16,000
 Colliers International
RESIDENTIAL fourth Quarter | 2007
Residential
The residential sector in Amman has been
notably undersupplied in the recent past,
due both to a historic under-provision of
stock and to the considerable influx of Iraqi
citizens to Jordan in general, and Amman
in particular. Rents and sales prices have
increased sharply given supply constraints.
By regional standards, residential villas
account for a small proportion of the
overall residential supply in Amman, at
around 25% of overall stock. The villa
segment has traditionally been a relatively
safe investment, and rental yields are
tight. Within this segment, the rental
market is dominated by smaller unit sizes,
whereas villas of five and six bedrooms are
overwhelmingly owner-occupied.
Developers of new projects have attempted
to take advantage of the large unsatisfied
demand for housing among the low and
lower-middle income segments of the
population by offering more attractive
mortgage financing options for off-plan
sales. This is a new innovation in the
Jordanian residential market, where
mortgage options have traditionally been
limited in accessibility and duration. This,
in conjunction with a focus on providing
affordable housing units, is set to make
the option of home ownership accessible
to a considerably larger proportion of the
100
Annual Rent (US$/m2)
80
60
40
20
0
Abdoun Airport Road
3 Bed
population. The average unit size of licensed
new dwellings in Amman has concurrently
declined sharply, from 208m2 in 2000 to
169m2 in 2006.
Overall residential unit supply in Amman
grew by approximately 14,000 units (2.9%)
in 2005. Slightly over 11,000 new apartment
units were provided, along with nearly
3,000 villa units. In 2006, supply growth
was slower, with around 2,500 additional
villas and 9,500 additional apartments
completed in the city. Colliers International
estimates that by the end of 2007, an
additional 7,000 units will be completed
(6,000 of which will be apartment units),
representing an overall growth rate of
1.4%. It is likely that development activity
will continue to intensify, although it will
become increasingly stratified between
developments targeting low-income citizens
and those targeting the upper-income
demographic and non-resident Jordanians.
The scale of development at the high end
of the market may result in a moderate
oversupply over the short term for high-end
property, although this is unlikely given the
scale of unsatisfied demand. At the lower
end, demand is highly likely to outpace
supply over the medium-term. Overall, the
focus of development activity will continue
to shift towards southern areas, especially
along the Airport Road.
Shmeisani Sweifiyah Khlada Tlaa Al Ali
4 Bed 5 Bed
 Amman
The office sector in
Amman is dominated by
low rise, owner-occupied
units disparately located
throughout the city, with
a greater concentration
in districts to the west
of the city centre
initial yields
Space Yield
Primary Grade 12%
Secondary Grade 14%
FORTHCOMING SUPPLY
Location GLA (m2)
Jordan Gate (2008) 80,000 120
Grand Amman Complex 85,000
(2009)
Abdali Boulevard (2010) 27,000
 Colliers International
office
Office
Amman currently lacks a defined Central
Business District, and primary grade
office space in the city is scarce. Demand
for high quality office space, however, is
on the increase, driven by growth in the
number of regional and international
companies establishing subsidiaries in the
Jordanian capital.
The relatively poor quality of available
office stock, combined with comparatively
high rental prices due to unsatisfied
demand, has driven many office space users
to purchase and convert residential villas
for commercial use until suitable space
becomes available. In the meantime, the
office sector in Amman is dominated by
low rise, owner-occupied units disparately
located throughout the city, with a greater
concentration in districts to the west of
the city centre.
Such is the current demand-supply
dynamic in Amman that office buildings
are reporting occupancy rates of over
95%, and absorption of new space offered
to market is rapid. Office sector rents
have been increasing sharply, and price
escalation reached 40% in 2006 over the
previous year. Nevertheless, space-user
Class A (Primary): Strong location, purpose-built, high quality finishing, central provision of Information and Communications Technology (ICT), Air-conditioning
(A/C) and central heating (C/H), good state of repair, available parking facilities.
Class B (Secondary): Strong location, converted use, moderate quality finishing, provision of ICT, A/C and C/H, limited parking facilities
Class C (Tertiary): Poor location, congestion and parking constraints, limited or no ICT, A/C and C/H, adequate state of repair, moderate quality finishing
office rents by location
180
160
Annual Rent (US$/m2)
140
100
80
60
40
20
0
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Abd
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fourth Quarter | 2007
ratios is Amman are high by regional
standards. Corporate tenants in the
city occupy as much as 50% more space
than their counterparts in more space
constrained markets such as Dubai and
Abu Dhabi.
The Abdali project alone will increase
Amman’s volume of dedicated office
stock considerably, and a number of other
projects will offer smaller commercial
components. Whilst details are still
emerging from private sub-developers
within the Abdali masterplan regarding
their projects, the scale of the master-plan
will ensure that Amman’s future office
market will be focused within the Abdali
redevelopment. These High Density
Mixed Use projects are intended both to
rationalise commercial space provision,
and to ensure that the needs of Amman’s
expanding economy are met for the next
25 years.
As dedicated office buildings are
constructed within the Abdali Project, it
is likely that the city’s existing relatively
low quality office stock will undergo
a de facto re-grading downwards, with
an attendant decline in occupancy and
rental rates.
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 Amman
Retail
The retail sector in Amman has traditionally
been dominated by small high-street retail
units. More favourable weather conditions
in the city mean that climate controlled
indoor shopping venues have been slower to
establish themselves than in other regional
markets, with Amman’s first shopping mall
opening as recently as 1999.
The city has experienced considerable growth
in the number of mall developments since
the opening of the Amman Mall, which have
now established themselves within the retail
market, due in large part to their attraction
of international brands into Jordan. These
centres are concentrated in west or central
Amman, although mall developers have
begun to turn their attention to the eastern
part of the city. Nevertheless, high-street
retail units remain an important and popular
segment of the city’s overall retail provision.
Retail rents in Amman’s malls are relatively
low, reflecting long lease durations
agreed by landlords for some of the more
retail fourth Quarter | 2007
established shopping centres. Newer malls
have achieved a sharp escalation in rental
prices over older developments, indicating
the growing adoption of the shopping mall
concept, and the strong confidence of
retailers in retail mall units. Despite this,
there is not yet a mall on the market that can
offer a shopping experience of international
standard. When such a facility does become
available it is likely that it will command a
considerable premium.
The forthcoming Baraka Mall aims to supply
this higher standard of space, and is attracting
strong international brands into its tenant
base. Conversely, the Beitna City Mall is
seeking to address the opposite end of the
retail spectrum. Its location in East Amman is
relatively unfavoured, and the project targets
low-income consumers. However, leasing of The city has experienced
units has been slow, suggesting that the focus considerable growth
of retailers themselves remains on the more in the number of mall
affluent areas to the west of the city. When developments since the
complete, the Taj Mall in Abdoun will target opening of the Amman
this constituency directly, aided considerably Mall, which have now
by its favourable location. established themselves
within the retail market,
due in large part to their
attraction of international
brands into Jordan
shopping mall rents
Location Rent (US$/m²/pa)
Amman Mall 120
Abdoun Mall 175
Mecca Mall I 175
Mecca Mall II 320
Zara Centre 300
Brothers Mall 250
City Mall 275
FORTHCOMING SUPPLY
Project Nla (m2)
Jordan Gate (2007) 30,000
Al Baraka (2008) 16,000
Beitna City (2008) 40,000
Abdali Boulevard (2009) 220,000
Taj Mall (2009) 50,000
Mihrath (2010) 165,000
Colliers International 
 Amman
Terrorist attacks at
the end of 2005 have
done little to dent the
performance of the city’s
hotels, which have enjoyed
notable improvements
in occupancy rates in
the last 12-18 months
hotel performance
Category ARR (us$) RevPAR (US$)
5* 142 86
4* 100 74
3* 65 46
forthcoming supply
Project Rooms
Hilton (2008) 500
Rotana (2010) 350
 Colliers International
hospitality fourth Quarter | 2007
Hospitality
The hospitality sector in Amman has been
in a period of transition in recent years.
Traditionally a market which has enjoyed high
occupancy rates, its hotels have been unable to
drive up achieved average room rates beyond
a relatively low level. This has now begun
to change, and since early 2006 achieved
average room rates in both 4* and 5* hotels
have been rising – indicating the robustness
of Jordan’s hospitality sector. Terrorist attacks
at the end of 2005 have done little to dent the
performance of the city’s hotels, which have
enjoyed notable improvements in occupancy
rates in the last 12-18 months.
Amman derives its hospitality sector demand
from a number of sources. As is the case in
the city’s other real estate sectors, demand
related to the security situation in Iraq has
bolstered the market. In the hospitality
sector additional demand related to Iraq has
mainly been the result of Amman’s position
as a primary access point to the country.
Non-Governmental Organisations (NGOs),
contractors, journalists and others commonly
pass through Jordan. A second major source
of demand for hotel accommodation in
Amman is Jordan’s popularity as a Meetings
Incentives Conferences and Exhibitions
(MICE) destination. Whilst the country’s
main conference and exhibition facility is
located on the Dead Sea, hotels in Amman
report that the majority of delegates will
spend at least one night in a hotel in the city
historic 5* hotel occupancy rates
80
70
60
Occupancy (%)
50
40
30
20
10
0
2001 2002 2003
during their visit. The third primary source of
demand for hotel rooms in Amman is leisure
tourism. In a similar manner to MICE visitors,
a significant number of these visitors pass
through Amman’s hotels for between one
and three nights as one of the destinations on
their tour of Jordan. While it remains highly
unlikely that leisure tourists will ever have
long durations of stay in the capital, they do
provide a valuable additional source of demand
to the city’s hospitality sector. The fourth,
and largest, source of demand for Amman’s
hotels is business travellers, who tend to visit
the capital city as their primary destination.
The bulk of the city’s high quality hospitality
offering is accordingly business oriented, and
this is unlikely to change at any time in the
foreseeable future.
There are two hotels currently under
construction in Amman, both of which
have been granted operating licenses and
have international operators in place. A
significant number of hotels are reported to be
at the planning stages in Amman. In general
terms, the Abdali project is expected to offer
between four and eight hotels in addition
to the Hilton and Rotana hotels already
under construction. The demand generated
from expected increases in corporate and
leisure tourism levels is expected to outstrip
provision of forthcoming supply in the
medium term. This scenario will translate
into the continued strong performance of
hospitality real estate assets.
2004 2005 2006 2007
 Amman real estate overview fourth Quarter | 2007

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This market overview is extracted from a comprehensive Amman real estate market study carried out PO BOX 47435
in 2007, available from Colliers International UAE for purchase. UAE
Tel : +971 2 445 9898
Fax : +971 2 443 3932
Ian Albert
Regional Director
Colliers International is a global real estate consultancy company providing a comprehensive Consultancy Services
range of property services to a broad range of clients on an international basis. Core services Eamon Alashkar
include property and asset management; leasing; development consultancy & strategic advisory; Associate Director
property valuations and international property investment services. Consultancy Services
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Manager
Consultancy Services
consultancy@colliers-me.com
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