When times are challenging and it is not enough to call a development “unique” or “best ever” to see apartments, duplexes and villas “fly off the shelves like hot cakes” in the speak of silly marketing metaphors, one needs innovative ideas in order to sell out a development with the speed that makes competitors green with envy.
FFA Real Estate, the property development arm of Beirut-based FFA Private Bank, has recently achieved just that; it found takers for four villas and 15 other residential units in a $42 million, small luxury project in the coastal town of Amcheet north of Byblos. Nineteen out of 25 total units in the project were sold within just six weeks in the fourth quarter of last year, according to Mireille Korab, head of sales and marketing at FFA Real Estate.
This performance was a feat in a time of indecision among property buyers, she says, noting that when the project idea came up in discussions people were incredulous and asked who these days would pay serious money for a luxurious villa on the beach. The skeptics were proven otherwise by the project because, “it all depends on how you offer it,” Korab enthuses. “If you offer it asking, ‘do you want a house by the beach for $3.5 million?’, people will say ‘no, why the hell would I want [to do] that?’ But if you offer it the other way around, like we have done, and created the hype around it, it was pretty interesting.”
In technical terms, “the other way round” meant that FFA Real Estate solicited clients with an offer to buy a property in Amcheet and invest in the project company at the same time. Buying a house, they were also issued shares in the Amcheet Bay Company, which owns the project. The approach thus was circular instead of the usual bi-directional mode where a developer on the financing side approaches investors with an opportunity to invest and achieve a financial return, and on the marketing side offers housing units to buyers under off-plan or buy-what-you-see sales models.
According to Korab, shares in Amcheet Bay Company could not be bought except through association with a home purchase. As she describes it, the buyer-investors participate in the risk of this company and its theoretical losses or likely gains from selling the remaining units.
Mood or money?
The idea was so appealing to Korab that she herself has become one of the buyer-investors in the project and so she is a shareholder in the project that she markets in her role at FFA Real Estate. When asked by Executive about the structure of the Amcheet Bay Company, she declines to reveal its capital or the name of the chairman of the board.
“The mean success feature is not the numbers,” Korab claims, but the achievement of devising an innovative way to sell this project. She considers this an existential art for the property development business in Lebanon instead of copy-and-paste marketing solutions that she distances herself from. Korab emphasizes, “real estate is a very emotional industry. If you deal with it in any other way, I don’t think you will be very successful.” In this sense, FFA Real Estate sold the Amcheet Bay project as “mood, experience and added value — the experience is what we really sold.”
Whether mood and experience or expectation of rising home values drove the buyer-investors in Amcheet Bay, the take-up on the project appears fast when seen against a new development brand owned by Beirut-based property company BREI.
Proximus, a brand of BREI, is focused on coastal properties and has broken ground on its first project in Fidar, a community about as far south of Byblos as Amcheet is north of the ancient port city.
According to BREI sales manager Layal Chahine, the development will comprise three residential buildings with units of 50 to 125 square meters (sqm) that are positioned in the $100,000 to $250,000 price range. During a pre-launch phase that started in June 2011 and ended last December, 40 percent of these units were sold, Chahine tells Executive, but says she does not have information on the mechanism that was used in financing the project.
As a business narrative, the method and success of Amcheet Bay’s marketing effort and return on investment for its owners deserves to be noted as a corporate success. In the larger story on the cultural landscape of Lebanon, one has to cast the question on its success wider because seafront real estate is a particularly divisive element of the national property annals.
A cursed coast
Coastal developments are a consistent and profitable line of property business in Lebanon, much to the chagrin of environmental conservationists and people aching for a walk along what is by law a public domain, not to be restricted by private interests. With more than one third of Lebanon’s coastline consumed by urban, industrial and non-touristic commercial usage, less than 140 kilometers of seafront see agricultural, recreational and touristic usage or are, in the rarest of cases, simply free from intense human exploitation.
Lebanon’s coastal urbanization began in ancient times, yet the 20th century was especially unkind to the country’s beaches. The civil war between 1975 and 1990 saw a wholesale destruction of coastal spaces with the recorded erection of some 1,269 illegal structures. The past 20 years have seen the Lebanese state lift barely a finger to address the situation.
Even the post-war years did not alleviate the defacement of the coast. In the late 1990s this Executive journalist was sitting dumbfounded on a tiny, rocky stretch of beach in Maameltein, just after interviewing a beaming engineer who wanted to stamp a resort on this piece of coast, which he cheerfully described as the last stretch of nature along all Jounieh Bay.
More recently, the exploitation of the coast for commercial gain has had many twists and turns, from the ramming of the first boardwalk into the ground on the Damour seafront to the warped saga of the Dbayeh mixed-use project that today has the name Waterfront City. In the sum of my exposures, only very few coastal developments of the past 15 years appear to have fulfilled their eager promises of sustainability and wider benefit to the communities.
Today’s developers building near the coast but on private plots and in compliance with the zoning and construction “rules” that are currently in force on municipal and national levels, are presumably more sensitive to the need for keeping alive what remains of nature.
Korab, describing the seashore abutted by the Amcheet Bay development as “virgin beach with small pebbles and clear sea”, emphasizes that public access to the beach cannot be restricted and that the buyer-investors in Amcheet Bay — who are all friends of one another — and their neighbors are prone to the sort of communal identity that wants to maintain the pristine aspects of their surroundings.
With the little that is still there and with the dreadful mix of under-funding, incompetence and corruption fatally marring prospects of any public-sector-driven restoration of the coast, one can at least hope private, small-scale residential projects (Amcheet Bay comprises about 7,500 sqm of built-up area) with a vested interest in preserving something of nature may yet represent the least-reproachable development use of private land near the seafront.
In its essentials, the innovation behind the Amcheet Bay buyer-investor modality was actually a return to a very traditional partnership concept, Korab confirms. “It was the old idea of having a piece of land and bringing in partners who bring in money and build their apartments. You always have to go back to the roots.” The development still has two villas and four other units that will be marketed under a commercial off-plan scheme.