This is not meant to discuss the war.
Ever wonder why Gaza has so many tall buildings and is so densely built, even though it’s so poor? I can’t imagine the rents justify the high rise construction, but then again maybe I’m missing something (cheap materials, lack of building codes, cheap labor), or there are housing subsidies or a strata of economic levels. You would think an embargo also makes the material costs more expensive. Maybe labor is super cheap, but how do they justify market rents for the population?
Or maybe I’m not used to thinking how projects in the developing world are done. Probably, their GDP growth is deemed to be higher and investors are banking on that.
Anyone with exposure to developing world projects can opine? Thank you
Palestine is the eight densest country in the world and an extremely high birth rate. They had to build up to find somewhere to put everyone.
*had tall buildings pls fx
Bruh
Most of the buildings are old and thus were not built whilst the embargo existed. They would've been built when the economics were favourable and probably were or are part of an "opportunistic" deployment (no pun intended) of capital. Provided the building has not been felled, IRR is probably 60% +, sounds outrageous but no building codes, maintenance is passed onto occupiers (not the Israelis), very tight supply of existing housing that continues to wane due to the conflict. Housing in developing nations return eye-watering IRR but no dispute resolution mechanisms exist so unless you are willing to sanction violence on tenants you will often struggle to collect rent. As a result, most housing in emerging countries, DRC etc, often fall into unscrupulous investors who have accrued capital from illegal activities and are willing to exact barbarism "to receive their due". Housing construction is often subsided by quasi-slaves, with indentured workers common in UAE/Saudi Arabia/Bahrain/Oman, this means construction costs are sub-market whilst rents are par leading to extreme IRRs. I can guarantee that some of the beneficial owners of those buildings in Gaza if not subsiding terrorism will be residing in the most affluent boroughs of London, Zurich, Geneva.
Excuse the jokes, comedy follows tragedy.
Thank you for your insights. Makes sense. Business is done differently.
this motivated me to embark on a RE development journey on 3rd world countries (think Rwanda, Somalia, France)
Kigali is apparently actually very nice and orderly (strongman there is apparently a big Lee Kuan Yew fan) - unlike the banlieues of Paris.
Restless wants to attain Real Estate Empire status. This is how it’s done. Unconventionally.
va te faire foutre, ton salaud ! essayez peut-être Chicago, LA ou le Mississippi. Connard raciste.
Great point, but would not specifically target the DRC, especially Kinshasa. Kabila is long gone, and there is a strong middle-class diaspora who are coming back, and investing throughout city.
Interesting, thanks for the scoop. I'll take a look at those markets.
Similar to many other countries in the Middle East, aside from the Gulf. Buildings are family-owned, meaning immediate and extended families pool their money to invest in an area that can hold large sums of their bloodline, sometimes totaling 200 people. The money that is sent to Gaza is either via humanitarian/foreign aid or remittances from family members abroad. Also pre-embargo there were no foreign residents of Gaza, the people that lived there were either Palestinian or Israeli (8,600 in the Southwest), meaning that "quasi-slave" work would have been highly unlikely.
The question pertained to high-rise buildings which house thousands, are incredibly capital intensive and it's near impossible for a family of even 200 to pool that amount of capital. I don't think you recognise how difficult it is to shepherd an army of contractors to complete a project in a nation with poor jurisprudence which is why the industry is rife with criminality. I also highlighted that the buildings are old and as such cashflows are not derived from foreign aid or remittances. Foreign aid places constraints on spending and was not present at the time of construction and remittances are too shallow a pool.
With regard to your last point, I was writing about emerging nations more broadly yet this still applies to Palestine. You highlighted domestic population statistics as if this includes migratory labour. Workers are imported, typically from poorer nations i.e. Northern Africa / South Asia for the duration of projects and face "quasi-slavery", it is a view supported by NGOs as rights regarding freedom of movement are stripped from them. It is a practice that continues today in the Middle East which Gaza and Palestine were not exempt from historically. I think you have a rose-tinted view of Gaza, it wasn't a utopia before the occupation, working conditions and treatment of foreign labour borders on depravity in the region. I speak from experience and it is a view affirmed by NGOs.
My buddy's dad is a high rise developer in India. Anyways, he was talking about development in India and they're able to develop high rise buildings there for like 20% of the PSF price of US costs. Laborers are super cheap, they use block construction, soft costs like architect/engineering is cheap as well. The most expensive piece is land. I was shocked to find out that land prices in most metros in India are now exceeding top areas in the US. I guess it makes sense, booming middle class and upper middle class pushing values up. Anyways, I think he's about to go work for his dad full-time and leave his firm.
India is so god damned dense I can totally believe land values exceed U.S. markets (in select areas)
What are the land prices per buildable square foot?
Simple answer: because it wasn’t always poor.
I was looking up photos of Beruit and Tehran in the early 1970’s. They were touristy and cosmopolitan. So, makes sense that there’s places might not always have been poor.
Lebanon was a historically Christian country, comprised of Maronites and Eastern Orthodox/Armenian Christians. It was formally established as a Christian safe-haven after WW1, with the fall of the Ottoman Empire (by a very similar process that established the Arab states and Israel). Over time, the Muslim Arab population either exterminated or displaced the Christian population. This is particularly the case viz. the 1975 civil war (which lasted until the early 1990s). Now Lebanon is effectively another Arab state. The Arab intention for the region is to ethnically cleanse all non Arab Muslims. The ultimate goal is to establish their Caliphate, which is required in Islam. Islam is supposed to be a military state, governed by Caliphs. The fall of their Caliphate constitute an existential crisis for the religion. It's comparable to the Jews losing their Temple.
Over time, the Arabs will due to Lebanon what they did in Gaza. The infrastructure economy will continue to deteriorate as it's governed by Islamic extremists.
https://www.bbc.com/news/world-middle-east-19913897
Great article, thanks
aren't apartments cheaper than houses? building one tall building must be cheaper than 100 houses, especially when you take into account cost of land, even though it must be cheap in there.
Taking a guess, but extremely high population density means they have to build up
Not just a phenomenon in Gaza or developing countries. Public housing projects in the United States are highrises for a reason - they’re much cheaper to build vs. an equivalent number of single-family homes
Free Palestine
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