Dubai: Few property markets in the Middle East have experienced as much turmoil as Beirut.
After the withdrawal of Syrian troops in 2005, investor confidence in the city known as the Paris of the Middle East began to boom with UAE developers making several significant commitments earlier this year.
Just as the country was looking forward to a record year for foreign investment into the property sector, Israel’s brutal invasion set the market back decades and resulted in an estimated $30 billion of damage to its infrastructure and underlying economy.
The assassination this week of Pierre Gemayel, a leading anti-Syrian Leban-ese minister and Maronite Christian leader served as a grim reminder of the country’s domestic political uncertainty.
His death comes amid a political crisis in Lebanon, following the resignation of six pro-Syrian cabinet members.
Experts and property developers are still divided on whether the country can attract buyers for current projects or fresh foreign investment.
In June Dubai-based Damac Properties launched the $150 million La Residence by Ivana Trump, a 27 storey luxury residential tower planned for the intersection of Omar Daouk and Fakhreddine streets in Beirut’s downtown area.
During the invasion defiant Damac officials said the company’s strategy of investing heavily in the country would not be swayed by what they considered short term political issues.
Speaking to Gulf News, Hussain Sajwani, chairman of Damac Group, said the company still does not regret its decision.
“Obviously sales have slowed considerably. We sold around 35 per cent of the units after the launch, but for four or five weeks sales stopped completely.”
“We thought it would take six months from the initial launch to achieve 100 per cent sales but we are now estimating a year and will start a promotion campaign around Christmas time. One effect (of the war) has been to scare off speculators leaving only genuine end users who are committed to the country.”
Sajwani said Lebanon’s infrastructure has been sufficiently repaired so as not to hamper the supply of raw materials for building work and said the lack of new residential project launches in Beirut is making it easier to hire contractors.
“We had just completed the design stage and were going through the approval process (before the invasion) so we’re only a matter of weeks behind schedule,” he said.
The La Residence launch followed an announcement by privately-owned Abu Dhabi Investment House (ADIH) of the $600 million mixed-use Beirut Gate project.
Deyaar Properties, a subsidiary of Dubai Islamic Bank, invested in two luxury residential developments near Beirut, while UAE-based Reef Real Estate launched the $20 million Bhersaf Tourist Village in Bhersa, a mountainous area outside Beirut.
Ryan Mahoney, managing director of property agents Better Homes, is not convinced by developers’ tough talk of commitment to Lebanon’s property market and says investors have generally lost confidence in the Lebanese market.
“I find it hard to imagining that anyone will be pleased that they had invested in a country that has been so badly devastated and is still relatively unstable,” he said.
“People say it’s a matter of time before the market is back on its feet, but the biggest problem is that there is still a great deal of political instability and until this is settled, the physical rebuilding will remain a secondary issue.”
Mahoney said the only positives are that the current supply of property is low and high-risk investors would be drawn to deflated prices.
Rod Monger, a professor at the American University in Dubai and a licensed real estate and mortgage broker in the United States, was more positive about the Lebanon’s real estate future.
“All markets react strongly to disasters. So companies are investing and will continue to invest in Lebanon.”
Source: Gulf News