During the lead-up to the market peak in Ashrafieh over the last two years, both established and new developers seized the opportunity to build in-demand residences in one of Beirut’s most lucrative markets. For Jamil Saab & Co, one of the oldest real estate investors and builders in Ashrafieh, the culmination of their efforts over the last 50 years has led to their most ambitious and high-tech project, the two towers that form 20|30, named after their respective floor levels. Executive sat down with two partners in the firm, siblings Chafic and Jemmy Saab.
What differentiates 20|30 from the other upcoming high-rises in Ashrafieh such as Sama Beirut and Skygate?
JS: The first advantage is the location. A lot of clients come to see us just because it’s in a residential area in the Golden Triangle. All the apartments, both 400 and 600 square meter (sqm) sizes, have four bedrooms, so it’s important for [clients that are mostly] families. And then the concept, the Italian architecture and the facilities are important; each building has a small oasis with an outdoor pool, indoor gym, wine cellar and security surveillance… In 20|30, it’s purely residential, with no retail or offices.
How is the extra investment in high tech facilities justified, both for you and for the buyers?
JS: For us it’s not, it’s just an extra cost for an added value. We have the photovoltaic panels that let the building generate its own power for electricity, the co-generation for free hot water and a lot more whether in the wall insulation or the aluminum thermal breaker or else. These technologies will reduce the carbon footprint and will economize the electrical consumption, decreasing the maintenance charge for the end user.
Was there ever a plan in the development of 20|30 to provide smaller apartments, as demand for this type of unit has increased in the last year?
JS: Never. Smaller units need more condense architecture and more people living in the same area. We preferred to have exclusive big apartments.
CS: In 20|30 we didn’t follow the market, we focused on luxury, green building and innovation.
On the other hand we are targeting the market in another smaller project that we have, where the average price-tag is $600,000: a budget anyone is aiming at whether it’s in Ashrafieh, Rabieh, Hazmieh or anywhere else.
What is the mix of buyers so far? What proportion are locals, expatriates or foreigners?
JS: It’s 100 percent Lebanese, most of them have good business in Lebanon and the minority are expatriates.
How do you find the usage of home loans in your projects and in the market in general?
JS: I would say about 60 percent [of buyers] at Le Patio, our last project, took advantage of a home loan. They were able to take a loan for 80 percent of the value, after buying the apartment. The loan was never an incentive to buy an apartment. It facilitates but doesn’t affect sales.
E: In general, how do you think sales will be affected now that it has stopped?
JS: It won’t affect sales, but it will affect the terms of payment. Before, they could pay a 30 to 40 percent down payment, but now it might be harder for buyers [without this loan]. We should be more flexible now.
CS: We deal with BLOM and Credit Libanais to provide home loans.
It is the first time the group has worked with the Italian architect Marcello lo Mauro, though it is not his first time working in Lebanon…
JS: Right. For Le Patio, we worked with AAA, a local architectural firm, but for 20|30 we wanted to go abroad for a change. It’s also the first time we’ve worked with landscape architect Vladimir Djurovic. We have 3,500 sqm of landscaping in the common areas of both buildings. [Djurovic has worked on several downtown projects and public spaces in Beirut and abroad]. In another ongoing project, Urban Residences, which has smaller 200 sqm apartments, [Lebanese Designer] Dori Hitti has collaborated on the façade design. Units in that 12-floor building have sold up until the 8th floor.
How do you keep the building homogenous in terms of the mix of buyers?
JS: It is especially the buyers who bring other buyers… by word of mouth. It’s important because if people don’t like the mix, they might not buy.
As land plots have dried up in Ashrafieh, what’s the biggest issue for developers in terms of acquiring the plots?
CS: The major issue is time and price. We are not negotiating vacant land anymore but properties with several owners and tenants.
For 20|30 there were four plots put together… we purchased this land in 2008. Another developer had already bought three plots and cleaned them, which we bought from him. The other land had a property with 14 tenants on it. It was a risk for us… it was tricky.
[I think] landowners may decrease their asking prices in the future because they are over-asking now. The ones that face difficulty selling now might not sell their plots before 2015 and for the same asking price as 2010 because of the over-asking.
How did the ambitious investment in the project’s sustainability affect the cost of construction?
CS: It will cost $1,000 per sqm more than the cost of our previous projects because of all the added initiatives.
Many developers complain that too many ‘unprofessionals’ entered the market. What has been the effect?
CS: There are too many unprofessionals in the market. They thought they would make 100 percent profit, like they did in 2007 and 2008 when the land price doubled and tripled. In four or five years, most of these groups will disappear and the real professionals will stay in business. But our price is never affected by what is happening because it’s a family business with no partners, so we are flexible with the prices and deals to keep our cash flow appropriate for construction.
There seems to be a consensus that prices in Beirut reached a plateau this year after reaching their peak. What will happen next?
CS: Prices will not go up, there [will be] stagnation for a few years, and that’s better for the market. There is no sense of prices increasing when people can’t afford it. $5,000 [per sq/m] is the price in the middle of the Golden Triangle for a building with top facilities. But in an average building where there is no pool and no visitor parking, the first floor should be $4,000 per sqm, not $5,000 per sqm.
Some people say that high towers shed the architectural flavor of Ashrafieh. What is your response?
JS: The trend now is towers. It’s dense vertically but it gives a lot of green space and open areas on the ground level. On the other hand we build these towers green and provide the best energy-efficient technology to make them highly sustainable.
Is the term “Green” overused among Lebanese developers?
CS: A lot of people [developers] call the building “green” even though they only use solar energy to heat water.
What future projects are on your radar?
JS: We are working on a property in Batroun waterfront where we may build a resort with villas for sale or rent.