The first successful development financing in Libya has been agreed with Palm City Residence project receiving a €55 million ($84 million) facility from Kuwait-based ABC International Bank.
As power slowly transfers from long-time Libyan leader Colonel Muammar Gaddafi to his pro-business son, Saif Al Islam Muammar Gaddafi, a number of real estate investors have been positioning themselves to enter the region.
The country has now been taken off the US list of state sponsors of terrorism and it is opening up to foreign investment.
The development facility was arranged by law firm Simmons & Simmons and involved parties from Malta, Kuwait and Libya. The shareholders in the project include Malta’s Corinthia Palace Hotel Company Limited and Kuwait’s National Real Estate Company. Additional lending was provided by Malta’s Bank of Valletta, Austria’s BAWAG Malta Bank, Tunisia’s Tunis International Bank and Libya’s Gumhouriya Bank.
The development project comprises 404 residential units as well as sport, leisure and retail facilities in the seaside resort of Janzour, 15 kilometers from Tripoli. With its own private beach, the units will mainly be leased out to blue-chip oil companies and embassies for use by their employees, as well as other expatriates residing in Libya.
“This is a very significant project, as it is the first of its kind in Libya and is likely to be a structure that other real estate finance projects in Libya will follow,” said Philip Abbott, who leads the Simmons & Simmons real estate finance team. “It also involved a high degree of complexity, due to the provision of multi-jurisdictional legal advice and the need for a creative financing structuring in order to comply with Libya's developing legal regime.”
Libya’s Law Number Five, updated in 2002, provides a legal framework for foreign direct investment and now allows foreign investors to repatriate profits and hire non-locals.
Sam Zell’s Equity International is scouting opportunities there while other firms such as the Corinthia Group, Emaar Properties and Phoenicia Group have started investing in the tourism and leisure-related industry.