Report shows good prospects for construction, with strong GDP growth and demand for housing and offices
Libya has been highlighted in a new report as a highly attractive construction market. The country's economic prospects are strong, with GDP set to grow by 8% from 2008 to 2011. The report says Libya will “remain relatively immune from the international financial crisis”.
Libya is emerging from a long period of isolation during which international sanctions limited its growth. Now sanctions have been lifted and foreign and private sector investment is flooding in.
Construction opportunities are concentrated in the capital Tripoli, which has a population of 1.5 million and is growing at 2% annually.
Tripoli needs new housing – the existing stock is old, of low quality and low-rise –as well as offices. The report says: “Office space in Tripoli is vastly undersupplied, with almost no international A-grade stock and less than 100,000m2 of dedicated office tower space… At least 400,000m2 of new, A-grade office tower space is expected to come online between 2010 and 2012.”
Tripoli's housing market is being boosted by rising incomes, falling household sizes, an influx of high-net-worth expatriates and the need to renovate dilapidated stock. Office demand is being driven by Libya's high-potential economy and the growing number of multinational companies setting up in the capital.
More than 25 major real estate projects are either under construction or awaiting planning approval in Tripoli, the report said. These range from mixed-use towers to diverse tourism-based developments. The highest concentration of sites is found in the emerging central business district around the Corinthia Bab Africa, the city's only five-star hotel.
International developers exploring the market include companies from the UAE, Qatar, the UK, Bahrain and Malta. The report said that “foreign developers entering the real estate market are strongly urged, if not required, to form joint ventures with Libyan companies in which the foreign party may hold a stake of up to 65%”.
It warned that Libya is not all plain sailing for foreign businesses, however. A major issue holding up construction has been the delayed release of the city-wide masterplan, which is now expected to be completed in the second quarter of 2009.
A further shadow has been cast by the proposed “dismantling” of most government ministries, which may take place in 2009.
In addition, foreign individuals, except those from certain North African countries, are not permitted to own land or property in Libya.
Lastly, the report warned that Libya is over-dependent on public sector investment.
The report, “Libya: Tripoli Residential and Office Real Estate 2009” by Research and Markets, is available online.