Region Lebanon's property market is literally soaring ahead in defiance of the financial crisis affecting most other countries.
Beirut's property scene climbs skywards
BEIRUT // Lebanon's property market is literally soaring ahead in defiance of the financial crisis affecting most other countries. Prices keep rising and new projects keep getting launched. The latest high-profile building to be announced is the Sama Beirut tower. When completed, the 50-storey building would be the tallest in Lebanon. A spokesman for the developer, the Lebanese investor Fady Antonios, said: "Sama Beirut is paving the way for a new trend in the capital. Towers are definitely popular in the city and in its suburbs due to the lack of space."
The building will be located in Beirut's Sodeco area, a central location on the edge of the fashionable Achrafieh district. Elie Nahas, the property manager for Lebanon's Bank Audi was not surprised that such a venture is being announced during what still is a global recession. Last year property demand was phenomenal and prices jumped by up to 50 per cent in the aftermath of the political agreement that the country's feuding parties concluded in Doha in June.
"Obviously, the global crisis has changed the market somehow but there still is demand," Mr Nahas said. In addition, he said, the building is only due to be completed in 2014 and such large-scale projects do not have a direct relation to the market conditions at the moment. A report released by Bank Audi last month said property transactions stabilised in the first five months of this year, while construction permits increased by 4.3 per cent.
Lebanon is bucking the world economic crisis in many ways. Analysts expect 4 per cent economic growth this year on the back of the rising property market, a boom in tourism and a strong performance by the country's financial sector. The growth in the property sector is being driven by the seemingly unlimited demand for a piece of home by Lebanon's large expatriate community. The diaspora remains faithful to the country even in times of crisis, unlike some foreign investors. And, as the developer of Sama Beirut pointed out, there is a lack of space, especially in Beirut and other desirable locations.
Mr Nahas called the demand for property in Lebanon, "mechanical, systemic". With such a lack of space, it is not surprising that developers are now focusing on taller buildings, even though such high-rise projects need larger plots of land. "Instead of developing six buildings or blocks of concrete on the land, they decided to go sky-high and make use of the extensive plot of land," the spokesman for the developer said.
From a commercial point of view this makes sense, Mr Nahas said, because buyers pay a premium for higher floors. "Everybody wants an unimpeded view, so now there is a race going on to go higher," he said. The average price of US$6,000 (Dh 22,038) a square metre that is being asked for the residential units that will occupy most of the tower, tells the story. Mr Nahas says prices in Achrafiyeh currently range from $3,500 to $5,500 at the very top end.
The Sama Beirut tower will also contain a spa, a gym and other luxury facilities and will provide spaces for six upmarket retailers. Finding a plot large enough for such a tall building in Achrafieh is particularly difficult as the area is densely built up and generally consists of relatively small plots. In recent years, some taller buildings have gone up in the renovated downtown area, which was practically razed during and after the civil war, and on the outskirts of the city where more land is available.