Iraq Gets a White House as Kurdish Tycoon Builds Replica

 

By Donna Abu-Nasr5 hours ago

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Shihab N. Shihab reckons he's going one better than U.S. President Barack Obama. 

After admiring the White House in Washington for its "beauty and simplicity," the Kurdish businessman is building a $20 million replica in the Iraqi city of Erbil replete with layers of Italian 21-carat gold leaf covering banisters and ceilings and Greek marble columns that grace the entrance. 

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"I get to keep my bedroom for the rest of my life while Obama has to vacate it when his term ends," Shihab, 58, said with a chuckle during a tour of the premises last week. 

Trophy homes and pet projects of wealthy Kurds stand out in Erbil as a budget dispute and the menace of Islamic State in neighboring towns cool construction in the Kurdish capital after a boom that transformed the skyline. 

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The house, due for completion in about four months, dominates the Dream City compound with sumptuous villas in a part of Erbil that realtors liken to a budding Dubai. 

Across from Shihab's White House, there are towers springing up in Empire World, which will cover a square kilometer when finished. Azad Sadollah, director of legal and business development at Falcon Group, which is running the project, called it "the biggest and most prime in Iraq." It was started in 2003 and was slated for completion in 2017. 

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"There may be a little bit of delay with some of the projects and not the whole concept," Sadollah said at his office in Erbil. "People are more cautious about spending and investing the way they would normally be." 

After Saddam 

The semi-autonomous region of Kurdistan, and especially its capital Erbil, had seen exponential growth since the 2003 ouster of Iraqi dictator Saddam Hussein. The region was almost like a clean slate, with opportunities that Kurdish and foreign investors are taking advantage of at almost every turn. 

New residential and office towers with gleaming glass facades have risen up, villas in various stages of completion flank major roads and brand-name hotels, like the Kempinski, Marriott and Hilton, made plans to open. Malls brought novelties, such as escalators, which had to be stopped at times because some people were afraid to get on them. 

"There's a lot of money to be spent," Tania Toma, associate for strategic consulting at Jones Lang LaSalle, a firm specializing in commercial real estate services, said from Dubai. "The Kurdish people are very cash rich and they want to spend money. People want to buy something now because they think there's a potential for growth." 

Foreign Money 

Investment in Kurdistan's real estate reached $42 billion since 2006, including $13.3 billion in housing units, said Sarbast Mantik, information director at Kurdistan Board of Investment. The United Arab Emirates has pumped $2.5 billion into property, followed by Turkish investors at $1.34 billion, said Mantik, citing the authority's figures. 

Shihab made his money from developing malls and other businesses, yet some Kurds haven't been able to keep up with the monthly cash payments on new homes being built. 

A budget row with the government in Baghdad has left hundreds of thousands of Kurds unpaid since end of July, while a failed attempt by extremist militants to advance toward Erbil in August has kept many expatriates away. 

The International Monetary Fund forecasts gross domestic product in Iraq will contract by 2.7 percent this year after increasing 4.2 percent in 2013, according to the latest regional outlook for the Middle East and North Africa released today. Non-oil GDP growth is also likely to move to "negative territory" compared with a growth rate of 7 percent in 2013, the IMF said. While the report doesn't give a separate forecast for the Kurdistan region, it noted the economic implications of this summer's attacks by Islamic State. 

Turkish Bath 

The market had been "stellar," said Sadollah, and he's optimistic it will pick up again. Villas at Empire World originally priced at $220,000 to $240,000 in 2010 are now worth $750,000 to $950,000, he said. Three-bedroom apartments are up to $300,000 from $110,000 in 2011, he added. 

Shihab said he also expects better times for Kurdistan. He plans to replace his Naza Mall, among the first in Iraq, with a 67-story residential and commercial tower. The problems "are temporary," he added. 

As he toured his 3,000-square-meter, three-floor White House, he showed off his 140-square-meter bedroom, bathrooms with imported fixtures, a movie theater and a swimming pool. 

"Where we're standing now used to be a military zone for Saddam's soldiers that was off-limits for us," Shihab said from one of the terraces. 

At the Turkish bath, Shihab proudly pointed out the domed ceiling with intricate decoration and where the Ottoman-era faucets will be placed. 

"They don't have one in the White House," he said. 

(An earlier version of this story corrected the Empire project date of completion.) 

To contact the reporter on this story: Donna Abu-Nasr in Erbil at dabunasr@bloomberg.net

To contact the editors responsible for this story: Alaa Shahine at asalha@bloomberg.net Rodney Jefferson, Amy Teibel