Developers dismiss talk of Beirut property bubble
Gulf developers urged to still invest in Beirut, despite huge recent rise in land prices
Leading Gulf developers are being urged not to turn their back on the Beirut property market. There is still plenty of valuable land left in the city, according to developers active there, who have debunked popular perceptions that the former ‘Paris of the Middle East’ is a crowded city with little area left for new projects.
“The civil strife created a lot of redundant space across the town: space that is not in use, is in abundance and remains so,” said Farouk Kamal, deputy chairman of London-based Stow Securities plc, which is constructing a three-building complex along the reclaimed waterfront area.
Agreeing that there are plenty of areas that could be redeveloped, Samer Bissat, assistant general manager of Beirut Waterfront Development, pointed out that Solidere is setting the standard for others. “They are being developed in totality and infrastructure is being put in place. This is having an impact on neighbouring areas. Standards are being set,” he said.
Meanwhile, Kamal revealed that developed real estate rates along the reclaimed L’Arc d’Or Beirut Marina seafront have almost doubled in a space of just a couple of years on the back of heavy demand from the Mediterranean jet set. “When we came in, built-up area was selling at US $2000-2500 m², and our cost base was more than $3000 m², but we have [gone] a notch higher to the $4000 m² level,” Kamal told CW.
Stow Securities has tied up with Solidere to bring back the glory days of the Beirut waterfront. It has set up a Beirut-registered firm, Stow Marina, of which Kamal is chairman, to execute three luxury buildings – Marina Tower, Marina Garden and Marina Court – in Beirut’s “most expensive”, area which includes a Four Seasons Hotel, Beirut Tower, Platinum Tower, Phoenicia Hotel and St. Georges Hotel, all of which form an arc around the Beirut Marina.
Though Kamal managed to push up the prices to the desired level, it was not easy. “Five weeks after we landed, 9/11 happened. We had to take a decision on pricing. I had sleepless nights. Everybody said I was crazy to build. Towers were designed and owners had abandoned them.”
Kamal said he was the first to use marketing communications to generate demand. “We had a rush of people buying. They wanted the building to live in and not for holidays. We have sophisticated customers who did not buy for speculation. Most of them are GCC expatriates and Lebanese living in Europe,” Kamal said.
Stow’s flagship project is Marina Tower, which alone has a cost base of $200 million. Within the next six months, enabling works will start on the project, which has been designed by the KPF team in London. The contractor is LKH in joint venture with CAT of Lebanon.
Marina Tower will be ready in about a year’s time. It will be 150 m high and will have 26 storeys facing the Marina and 32 at the back. He said only one apartment is left at Marina Tower and that too is under negotiation. The Marina Garden is a 9-storey building which is 80% sold out. Marina Court is a 10-storey building with nine storeys of apartments and one duplex penthouse.