The main contracting firm that built Abu Dhabi’s Etihad Towers has entered into an agreement with an Iraqi developer to build a high-rise residential tower in Baghdad.
Abu Dhabi-based Arabian Construction Company (ACC) has agreed to create a US$5.7 million holding company with Iraq-listed Al Mamoura Company for Real Estate Investment. The Iraqi investment bank Melak Iraq is leading the advisory work. ACC was unavailable for comment when contacted.
According to the terms of the agreement, Al Mamoura will provide a plot of 1,200 square metres in Baghdad’s Karrada neighbourhood. ACC, in return, will contribute funds equal to the value of the land.
“It’s the culmination of two years,” said Geoffrey Batt, who manages the New York-based Euphrates Iraq Fund, which owns 42 per cent of Al Mamoura.
The two parties have not yet confirmed the total value of the project, said Ali Jalil Obaid, the chairman of the Iraq Stock Exchange and a board member at Al Mamoura.
Damac in May last year announced plans to develop a $100m luxury residential tower in Baghdad. The developer's Princess Tower takes its name from its location on Alameerat (Princess Street) in Mansour district, where a number of royals from Iraq's monarchy era had palaces.
Iraq’s housing minister in March issued an impassioned plea to UAE-based investors to help resolve the country’s housing crisis.
The government has a total budget of about $5 billion over the next three years to attempt to relieve some of the country’s desperate housing shortage, said Mohammed Al Darraji, the Iraqi minister for construction and housing, at the Iraq Housing Summit in Dubai last week.
The Iraqi government estimated that 2.5 million new homes will need to be built by 2016 to accommodate demand, but that it would be able to construct only about 130,000 by next year. Overseas developers are staying away from the oil-rich but troubled country, which faces the aftermath of 40 years of underdevelopment and a decade of war.
halsayegh@thenational.ae
* with additional reporting by Lucy Barnard
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