What's Down: Beirut's Central District suffered a blow last week Gulf counties warned their citizens to avoid Lebanon, following violent clashes.
Travel warning a blow to Lebanon's fortunes
Beirut's Central District, a favourite hangout among Gulfies, suffered a blow on Friday when Bahrain, Qatar and the UAE advised their citizens to avoid Lebanon after violent sectarian clashes last week.
The travel warning, triggered by clashes between Lebanese groups for and against the uprising in neighbouring Syria, was the latest blow for Solidere: the company that owns and manages the souqs, hotels and other property in Beirut's Central District.
"The travel advisory will harm Lebanon's economy and its institutions of tourism - hotels and restaurants - which are already under pressure," said Wadah Al Taha, the chief investment officer at Al Zarooni Group, an investment company in Dubai. "It will hit Solidere very badly." The number of Middle Eastern visitors to Beirut dropped significantly last year as unrest in Syria prompted travellers from the region to opt for destinations in Europe, cutting into Solidere's profit.
Solidere's global depository receipts, listed on the London Stock Exchange, have tumbled 29.6 per cent since Syria's popular uprising began in March last year to trade at US$12.60 each. The company's shares, listed on the Beirut Stock Exchange, have fallen 24 per cent in the same period, to $13.18. Stock markets in London and Beirut were closed yesterday for the weekend and are due to reopen on Monday.
The travel warning followed last week's clashes in Tripoli, a port city just north of Beirut, between Sunnis and Alawites. The violence left 10 people dead. The leadership of Syria is predominantly Alawite, while the majority of the population is Sunni.
Solidere, also known as the Lebanese company for the Development and Reconstruction of the Beirut Central District, was launched in 1994 with the aim of rebuilding infrastructure that was destroyed in the country's civil war.
Beirut Central District, which spans 190 hectares, has a souq in addition to hospitality and residential units.
Solidere has sought to diversify out of Lebanon. It launched its associate Solidere International in 2007 in the UAE and prepared the master plan for Al Zorah in Ajman. The company pre-sold 30 per cent of the project and was in the tendering phase when local markets crashed in 2008.
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