| Lebanese
Real Estate Investments |
| June
2006 |
|
| From
multimillion-dollar tourism projects to single-owner apartments in the
capital, Gulf investors are increasingly looking to Lebanon. A look at
the regional players. |
|
| New Arab investment
in Lebanon reached $500 million in 2002, increasing as investors balance
healthy returns against declining risk. This splurge came in the overall
context of what the Arab world feels is increasing discrimination in the
West after 9/11. |
|
| The capital
flow into Lebanon has followed the increasing number of tourists from Arab
countries, and is concentrated in the purchase of villas and apartments
for personal use and in the construction of tourist projects, often in
tandem with a Lebanese partner. |
|
| 'Real estate
and tourism comprise the majority of Arab investment here, both in the
number of transactions as well as the size of each transaction,' said
Karim Salameh, managing director of Saradar Investment House. |
|
|
|
|
|
| Buying
villas or apartments comes naturally to Gulf visitors, who see Lebanon
as a welcome chance to mix business and pleasure. Developers of most luxury
residential projects consciously target Gulf buyers, who have bought many
of the apartments sold in a clutch of developments, including Marina Towers,
near the Phoenicia Hotel, where prices have reached a staggering top sale
price of $5,900 per square meter. 'For many of these buyers, this is
a second or third home,' said Jihad Ibrahim, manager of the Ahlam building
on Beirut's Ain el Mreisseh seafront, where huge apartments of 900 square
meters sold at $1,700-2,000 per square meter. |
|
| 'With flat
or falling prices in Lebanese real estate, potential buyers from the Gulf
are finding things more to their liking,' said one broker. 'But
the fact that these buyers have money,' he adds, 'doesn't mean they want
to be taken for a ride.' |
|
| Arab investment
is becoming more large-scale and more ambitious. Between January 2001 and
May 2003, 80 investors from the Gulf acquired 1.8 million square meters
of land, mainly in Mount Lebanon. The figures - revealed in research by
Ramco, the Lebanon-based property consultants - show that the top 23 of
these investors each bought an average of 64,467 square meters of land
(83 percent of the total), a size clearly indicating the intended
use is commercial rather than personal. |
|
|
| Acquisitions
of this size require an exemption from the law limiting purchase of land
or property by a non-Lebanese to 3,000 square meters. But the council of
ministers - led by Rafik Hariri, a prime minister with strong business
connections in the Gulf - has been more than willing to grant waivers. |
|
| Tourism
projects in Lebanon already lead the way in attracting multimillion-dollar
Arab investment. The cost of the Movenpick resort, owned by Saudi Arabia's
Prince Walid bin Talal in a prime position on the Beirut seafront, has
been estimated at $120 million and the prince is also intending to open
a Four Seasons hotel in downtown Beirut near the marina. |
|
| He has also
recently acquired a 49 percent stake - at around $100 million - in LBC-Sat,
the broadcasting arm of LBCI, the satellite television company. Emirates-based
hotel group Rotana announced in October that it plans to expand its existing
Lebanon portfolio from the management of the five-star, 168-room Gefinor
hotel, which opened in West Beirut three years ago, with an additional
$70 million. |
|
| Rotana will
open a four-star hotel in Hazmieh on the Damascus highway and a seafront
development of 170 suites in Raouche, Beirut. Selim al-Zyr, the group's
president, said he felt Lebanon had 'reached only the tip of the iceberg'
in terms of business potential. |
|
| Another
UAE group, Habtoor Properties, will soon open the $150 million second phase
of its Metropolitan City Center, in the Beirut suburb of Sin el Fil.
When the company opened the first phase, the Metropolitan Palace hotel,
early last year, many analysts said the location was wrong for a luxury
hotel. But Habtoor benefited from prices far lower than in downtown Beirut
and says that the hotel's occupancy rates justify their original enthusiasm. |
|
| United
Real Estate, owner of the Sheraton Heliopolis in Cairo and a subsidiary
of KIPCO, Kuwait's largest private-sector company, recently announced
it will join forces with Horizon Development, part of the Hariri group,
to invest $250 million in two projects. |
|
|
|
|
|
| A massive
seafront development will include a five-star hotel with Lebanon's biggest
conference center, and a shopping center in Verdun that will target local
and international retailers with 50,000 square meters of space for rent. |
|
| The influx
of Arab money has led to some rumblings of discontent among the Lebanese. |
|
| The municipality
of Qornayel, a Druze village north of the Beirut-Damascus corridor where
foreigners have bought 25 percent of the total area, has petitioned President
Lahoud and Prime Minister Hariri to enforce limits on construction. |
|
| But, so far
at least, the Lebanese appear to see the advantages rather than pitfalls
in such investment. 'Any government led by Rafik Hariri will always
keep an open door for money from the Gulf, whether it goes into banking,
real estate or entertainment,' said one consultant. |
|
| Hariri has
long portrayed intra-Arab investment as a means to the creation of a trading
bloc. 'There is nothing to prevent us from cooperating with each other
- except illusions, personal gain and the mentality of small grocers,'
he said in October. |
|
|
| 'Why is
it possible to have other big and medium blocs, while it is difficult or
impossible to forge a bloc among ourselves?' |
|
| Source AMEInfo |
|
|
