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Beirut property buoyant despite unrest
Despite a shattered economy due to ongoing political unrest, the Beirut property market remains robust, according to several high-profile local business people. However, there are fears the hospitality sector could suffer if street protests continue.
Damac Holding chairman Hussain Sajwani told Arabian Business that the country has political issues, but that its customers were “still there”. “Sales are slowing down, but prices are still the same. We are adopting a wait and see policy,” he said.
Paul Achkar, head of the Lebanese Hotel Association, however, estimated that 15,000 tourism industry employees might lose their jobs by early next year. “We can still have a decent Christmas season if the protests end, otherwise it will be terrible,” he said in an interview.
Major buyers of Damac projects in Beirut – in June the developer launched the US$150m “La Residence by Ivana Trump” tower – are Lebanese and GCC nationals that often choose Lebanon as a great holiday destination.
Sajwani added: “One effect of the war has been to scare off speculators leaving only genuine end users who are committed to the country.”
Randa Armanazi, communication director of Solidere, a company that reconstructs and develops project in central Beirut, confirmed that war and political unrest do not affect Lebanon’s attractiveness for property buyers due to the limited supply of available properties.
“When the war with Israel happened the demand for our projects actually increased. People do expect prices to go down during these times, but this never happens. As opposed to Dubai, for example, central Beirut is a static place that cannot be expanded.”
“We cannot build a palm to offer more homes, so demand for property here exceeds supply. We have many clients from the Gulf, the wider Arab region, Lebanese migrants that live abroad, and of course locals that all want to buy property in Beirut,” she said with confidence.
Armanazi added that temporary political unrest was “part of life”. “Lebanon is a democracy so people can voice their opinion. We therefore sometimes experience such incidents, but we are used to this.”
Despite optimistic sentiments, however, Lebanon’s economy looks increasingly strained, according to analysts. The recent conflict resulted in an estimated US$30bn of damage to its infrastructure and underlying economy, and with the current street protests costing the country US$70m a day, it remains to be seen how much longer the economy can withstand until it collapses.
Tourism, a major portion of the Lebanese economy, had recovered surprisingly quickly after the war, however the current situation could affect forthcoming celebrations with Christmas two weeks away with the country containing a large Christian community. In addition, the end of this year will see Muslim holiday, Eid Al Adha, fall around 27 December, with experts predicting around 400,000 tourists this month alone.
Damac meanwhile entered the Egyptian market earlier this month with a 320 million sq ft project entitled “Gamsha Bay” – the largest development in the region – at the Red Sea resort of Hurghada. The project will be divided into nine distinct zones and will offer various housing options, entertainment venues and recreational facilities.
Sajwani said: “The Egyptian government has been improving the local business environment, that also become less bureaucratic. The economy is growing fast, largely due to tourism. Egypt is the biggest country in the Middle East, and therefore a huge market.”
He stressed the fact that the developer is looking at several markets in the region. “We will launch a large residential complex in Saudi Arabia next year, and we will keep bringing new projects to Dubai and Abu Dhabi.”
Currently Damac develops high-end properties in the UAE, Lebanon, Qatar, Egypt and Jordan, and is eyeing markets in the wider Middle East and North Africa Region and the Far East. The firm eventually aims for a 50:50 ratio of its local and overseas developments, according to Sajwani.
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