The vistas around Beirut’s northern gates are changing. For years, the expanse of seaside development in the Dbayeh township was an empty promise of a coming suburbia.
Although much of the area remains as vacant as ever — equipped with just an upscale marina and convention hall — the land-filled seafront district has started to bustle over the past three months with excavators, cranes and concrete pumps. Last month, road construction equipment got busy on some of the district’s long-neglected interior streets.
The activity is all related to the Waterfront City project, whose first phase of construction commenced this spring under the partnership of United Arab Emirates-based conglomerate Majid Al Futtaim (MAF) and Lebanese company Joseph G. Khoury et Fils.
Hailed by a massive marketing onslaught with emphasis on the new residential offerings’ entry-level prices — advertised at $250,000 — the implementation of Waterfront City’s initial batch represents a $226 million project value for 348 units. In terms of project value, the phase one undertaking will bring the largest single bulk delivery of apartments to the suburban Beirut housing market when the handover of units starts in early 2015.
Samer Bissat, the senior project director of MAF Properties, says Waterfront City will entail 1,700 units when it is completed and represent a value of $1.5 billion to $2 billion.
There is no fixed deadline for the entire project, Bissat says, but progress is in line with the speed that the developers have been planning for. “A lot will depend on the absorption rate. My prediction is that within five years, all of Waterfront City will have started.”
The project has a noteworthy aspect on the contracting side as the executing company, ACC-Matta, is a joint-venture between Arabian Construction Company (ACC), a Lebanon-based construction firm with mainly regional business, and Joseph Matta, a firm that is focused on the domestic building market.
By collaborating, the two family firms could combine Matta’s local knowhow with the experience of ACC with international projects to give the joint venture the scope required for developments that go beyond project sizes commonly found in Lebanon, says Maher Merhebi, chief executive of ACC. “Few companies in Lebanon will be able to carry out a project of this type on such a large scale.”
The awarding of the contract to ACC-Matta sealed at the end of last year, was by a highly competitive tender, he says, and the contracting joint venture is dead-set on winning the contracts for phases two and three of Waterfront City.
Lowered expectations
The talk about Waterfront City is as old as reconstruction. Ever since the first drawings and models for master-planned developments in post-conflict Lebanon surfaced about 20 years ago at investment shows and development fairs for metropolitan Beirut, the Khoury Marina and surrounding land was featured as an upcoming magnet for urbanites in the Lebanese capital.
In June 2012, when the project was finally turning real with a groundbreaking ceremony, huge slogans pledged to prospective buyers that they would “own their horizons”. Later in the summer of 2012, the MAF-led project-owning partnership announced that sales of phase one “have soared up to 60 percent in one month” and added sales “are anticipated to ascend”.
In talking with Executive, MAF’s Bissat admits the undeniable, saying that sales have slowed as the regional situation has turned harsher. He claims that lowered expectations are being met and deflects questions on the hard numbers in sales performance in the first quarter of 2013.
“We are realistic and expected a slowdown on account of the regional situation. In Q1 2013, sales performed as expected on those terms and are slightly better than expected. I can’t give precise numbers but sales performance is as per the business plan,” he says before finally disclosing that the venture booked $330 million in signed sales contracts and important milestones such as deposit commitments have been met in May 2013.
What Waterfront City officials would not answer questions on either in 2012 or today was why this development was held up so repeatedly in the past. Water under the bridge, so to speak, is how they want to treat this story. Bissat turns instead to elaborating on what he markets as the project’s future.
“We are looking at a bright future with parks [and a] very easy and relaxed environment in terms of spacing,” he says, and emphasizes that Waterfront City will not be a gated community. “The correct terminology is that [the residential areas] are communities but they are definitely not gated. They may give such a feeling because they are contained in a specific area but [Waterfront City] is a community which is supposed to be self-sufficient.”
MAF will retain stakes in the community. According to Bissat, “a lot” of the project is to stay with the conglomerate as it will own and operate an upcoming mall and hold onto retail and hospitality properties. “We have major interest in the mall as MAF Properties; we also have joint ventures where we will retain restaurants and lease them out.”
In terms of communal living spaces and public areas, Bissat tells of imbuing the development with quality markers such as piazzas, an art scene and a farmers’ market. “We are contributing to society at a cultural level, at a socioeconomic level [and] at an educational level. We have been working on the components for a couple of months and Waterfront City will become a community that comes to life,” he enthuses.
Asked about the distribution of the cost burdens for creating and maintaining these communal elements and whether part of these costs are injected into the unit prices, Bissat cools the rhetoric to say, “This requires a multifaceted answer.” While Waterfront City will invest its own financial resources into the quality of life infrastructure, investment components are also part of the sales price calculation and in the long term the community will also have to pay into these structures.
New foundations
At present, the project venue still feels a good distance away from any state of community or identity. The sales center is located at the Khoury Marina, accessible only by passing two control booths. On the public side of those gates lies a leisurely 20-minute walk along the concrete breakwater to the Antelias intersection on the coastal highway.
The walk affords me with views of Beirut and an impression of the informal uses that have penetrated the land-filled area during the many years of commercial hiatus; I pass a cement truck whose driver took it here for his lunch break, a melancholic biker with a ponytail contemplating the sight of the city across the bay and young couples sitting on the seafront barrier and holding hands in the area’s relative privacy.
From a construction point of view, the main challenge of pouring the foundations for Waterfront City arises from the soil composition. The soil composition has to be examined thoroughly in order to determine the piling solutions in every portion of the project’s first phase, Merhebi says. “The primary aspect is to improve the soil characteristics and [the ground’s] behavioral qualities. Liquefaction is a major factor to consider in the piling and foundation works.”
The big challenge is that Lebanon has a high impact risk to earthquakes, he explains, and the varying soil characteristics found in the reclaimed land must be taken into account to counter the risk of dangerous earth movements in case of a tremor.
For Bissat, the development will bring a new social environment where the ills of the things spoiling the nighttime will vanish and whose horizons have no room for problems. “The offering and added value that this environment will bring do not exist elsewhere today. I can only see positives going forward.”
