Home BusinessReal Estate Turning heritage into profit

Turning heritage into profit

Incorporating classical architecture into real estate planning

by Nabila Rahhal

A short walk in practically any area in Beirut — be it Hamra, Gemmayze, Zuqaq Al Blat or Ashrafieh — leaves one in awe at the neck-breaking speed at which Beirut’s urban structure is changing. High rises cast shadows on what is left of buildings dating back to the French and Ottoman mandate, and even most of those are being demolished to make way for more towers.

Yet the situation has created a backlash in the market where many young and affluent urbanites long for the simplicity and authenticity of architecture from the olden days — a sentiment that commercial establishments are making use of while preserving heritage at the same time. Today, some of Lebanon’s most beautiful and popular restaurants — such as The Gathering, Enab or Sud — have breathed new life into traditional homes by incorporating the architecture into their venue, a trend that is on the rise in the food and beverage industry.

The issue of preservation of heritage homes paints a dismal picture of a state wittingly or unwittingly playing into the greed of landowners and developers who, motivated by profit, cast a blind eye on heritage. “The state gave every incentive for people to tear down their heritage homes instead of renovating them,” says Giorgio Tarraf, founder of Save Beirut Heritage, a non-governmental organization that champions the protection of the city’s historical sites.

His words ring true when one considers the urban planning and the old rental laws. Karl Sarkis, general manager of Blox Real Estate Services, explains that the pre-1992 rental laws have the tenant paying miniscule amounts: “The average rent for a 200 square meter venue [according to pre-1992 laws is] around $80 per month. With this situation, how can the landlord of an old building maintain it? It’s not economically feasible for him to do so.”

These laws, coupled with the increasing price of land in key areas in the city, set the wrecking ball swinging for traditional architecture in Beirut. “The real catastrophe for heritage homes is our development and construction laws, which make it much more lucrative to build towers in the city instead of preserving a two-story heritage home,” says Khaled Rifai, an architectural inspector at the General Directorate of Heritage at the Ministry of Culture.

Despite what seems to be a losing battle, the Ministry of Culture, with backing from civil society, has made some efforts to preserve these traditional homes. Tarraf explains that in 1996, an NGO called the Association for Protecting Natural Sites and Old Buildings voluntarily did a tentative overview on the area surrounding downtown Beirut and came up with a list of 1,600 buildings to be preserved.

In 1999, Khatib and Alameh, a Lebanese construction company commissioned by the state, pared down the list — still limited to the area surrounding downtown — to 500 heritage buildings classified across five levels, with “A” being the most significant to save and “E” having the most damage. Those classified as either D or E could be torn down and so, today, only 250 of those classified remain, according to Rifai. “There was a game of influences happening at that time and classifications were based on the current state of the building, not its inherent value,” says Tarraf.

According to Rifai, focusing only on the areas surrounding downtown left a lot of unclassified heritage homes across Beirut, which is why in 2010 the Ministry of Culture decreed that no home in Beirut can be torn down without the ministry’s written consent. Though the ministry’s role remains advisory and the final decision to demolish a building lies with the Municipality of Beirut, Rifai is content with this step and says the ministry has saved 200 previously unclassified homes in the past three years, adding that the municipality has complied with their advice so far.

With only two architectural inspectors for heritage homes across all of Lebanon, Rifai admits that there is nothing they can do to prevent homeowners from intentionally damaging their property in the hopes of gaining a permit for its legal destruction. Rifai says, however, that the General Directorate refers cases where a building “suddenly” collapses to General Security. If it was a classified heritage building, the owner can be prevented from building on it or selling.

But real estate agents who spoke with Executive all disclosed that when an investor has enough influence, no classification stands in the way.

A sense of nostalgia

“The trend is changing and people are developing an appreciation for heritage homes, now seen as a luxury. There is an increased awareness from the public, and today a demolition of a house makes front-page news,” says Tarraf.

While cases of preserving heritage homes for residential purposes are rare, preserving them for commercial use is becoming more of a norm. Commercial uses include spaces for art galleries and banks, but perhaps the most profitable and successful venues are in hospitality, where heritage acts as a multiplier of commercial use value.

This trend of capitalizing on heritage has been growing, with approximately 25 restaurants in heritage homes across Ashrafieh, Gemmayze, Mar Mikhael and Hamra. This number is easily twice what it was five years ago, and it seems that around 10 percent of remaining registered heritage houses in Beirut are restaurants.

Blox’s Sarkis says he has noticed an increase in demand for old houses “with charm” among those interested in developing restaurants, as well as landlords who specifically ask him to put up their properties for rent as restaurants. He has recently rented two heritage homes in Mar Mikhael that will shortly be launched as restaurants and says that investors are interested in 10 heritage homes in the same area, but that they are tied up in inheritance issues.

Related articles: Beirut must develop horizontally

The full story of the Fouad Boutros Road

“90 percent of the old homes in Ras Beirut have been renovated into restaurants or furnished apartments,” says Anis Rebeiz, a real estate agent in Hamra, adding that, to his knowledge, there are no more heritage homes available for rent as restaurants in Hamra. “Whatever traditional homes are left in the area are either classified and cannot be played with or are forgotten by their owners, who are mainly abroad,” says Rebeiz. 

A rental lease for a restaurant is usually a long-term one, says Sarkis, and annual rent for a heritage home in Mar Mikhael is between $60,000 and $120,000, depending on the size of the land. “For landlords, renting their homes is profitable because they price the rent the same as if it was a floor in any building in that area, and usually restaurateurs choose areas that are already booming and so land price would be high,” explains Sarkis.

There are other reasons landlords might choose to rent their homes to restaurant owners: the home is too small to sell for a bigger development; the real estate market is in a slump, which makes it more financially sound to rent than sell; or simply because the owner appreciates heritage and would like to see it put to good use.

Converting a heritage home into a restaurant requires a deep appreciation for traditional architecture as well as a clear vision because the renovation process requires one to two years and a budget ranging between $750,000 and $2 million, according to restaurant owners. “Heritage homes are expensive to rent and expensive to renovate as opposed to other successful bars or restaurants built from scratch, which were much cheaper to develop,” says Ussama Makarem, owner of Clé, a bar and restaurant in Hamra.

Restaurant owners shared with Executive stories of the original states of their rented venues, many of which had no running water or electricity or were not even hooked up to the sewage system. They were met with challenges such as interior walls being too thick to be broken down without special tools or having to mix cement manually as the area was too tight for a mixer. All said they had to incorporate structural support to compensate for weak foundations. However, they all said they “fell in love” with the charm and history and could not envision their restaurants anywhere else.

But passion alone cannot guarantee the long-term preservation of commercially-used heritage houses. Since these sites are usually offered for lease and not sold, the owner can refuse to renew the lease agreement with the restaurant owner, or the restaurateur may choose to close down the venue if it is not performing well. “We can be happy that architectural heritage is safe for the time being but without property sale, no one knows what the future will bring,” says Sarkis. 

For the time being, there are two factors that speak to the long-term future of commercially-used heritage houses: investments in concepts where whole hospitality identities are built around the inclusion of heritage, and the passion of the operators.

Some venues, such as Noa or Sud, only preserved the façades of their buildings while constructing completely new interiors in line with their concepts. Other restaurants, such as The Gathering, Clé or Enab preserved as much of the interior as possible. “We kept the original tiles, the wooden beams on the roof, the window sills and even the lime wall interior,” says Tamara Zeidan, co-owner of The Gathering.

These varied efforts and different concepts have been rewarded, operators say, by steady streams of customers who seek out heritage in hospitality venues. To safeguard these venues even better, the public sector could contribute a great deal through indirect measures, such as allowing trade-offs on exploitation ratios, and direct measures, such as strict heritage protection of buildings and even neighborhoods. Until that day of administrative awakening, however, Beirut’s heritage will remain only under the protection of a lease.

“There is indeed a rise in interest in such projects and in going back to heritage and simplicity, though some investors still look for the easy way of building. We can all build new venues and have the same concept but then what makes me different?” asks Michel Yazbeck, owner of Sud.

Support our fight for economic liberty &
the freedom of the entrepreneurial mind

Nabila Rahhal

Nabila is Executive's hospitality, tourism and retail editor. She also covers other topics she's interested in such as education and mental health. Prior to joining Executive, she worked as a teacher for eight years in Beirut. Nabila holds a Masters in Educational Psychology from the American University of Beirut. Send mail

View all posts by

You may also like