Markus Giebel is the chief executive officer at Deyaar Development PJSC, one of the region’s biggest real estate companies. Executive Magazine had the pleasure of sitting with Giebel as Deyaar unveiled the recently completed project at Saifi Village II, which is comprised of 72 upscale apartments and penthouses and is located in the Beirut City Center master development.
E This is not the first time you invest in Lebanon. What makes this country, in your opinion, a good destination for real estate investment?
It is the first project that we have completed in Lebanon. Other than that we have a total investment of $200 million in the country. But the first project we completed is the Saifi II, which is a $100 million project. The sad portion of it is that many things got destroyed, and someone had to rebuild it. So there is an intrinsic and real need for real estate. It is a privilege actually to be one of the people who can rebuild, and Solidere does a wonderful job. To be a partner with Solidere and a part of the rebuilding is something anybody can be proud of. The second thing is that if you look at the financial crisis, Lebanon became one of the most attractive places. So historically there is an intrinsic need and if you are looking forward, this country looks very strong. We have real GDP growth, a real growth of 1.6 percent positive. The world is 1.9 percent negative. So there is something which is very intriguing. For us as a developer, we develop in developing countries. There is a developing element of this country so there is an incentive that we like.
E So you think that Lebanon has good market fundamentals?
There are many fundamentals. We come from Dubai; many people from our part of the world love the place here. So there are many people who enjoy the countryside, the people, the food. So there are these elements; the other element is that there is a real demand for real estate.
E The project is 100 percent sold. Who are the people who bought in? Lebanese mostly or foreigners?
There is a complete mix. There is a vacation element of it. People would come a month or two per year. And there is also real demand from Lebanon. Many of them are also Lebanese expatriates. That is exactly one of the areas we cater to. Starting with the new project, there are three elements. There is the vacation element, the expat element, and there is the extrinsic element. That is what makes Lebanon so thriving.
E Which market segment does the project target? What is the price range?
It is an upper-scale development; there is a luxury element to it. There are some penthouses which are pure luxury, and there are also higher mid-end affordable elements in it. It is mid-high. But the penthouses are high-end. The price range doesn’t help you much, because we launched the project in 2007, and prices in 2007 were very different than 2009. In these three years the prices went up. So anyone who bought with us when we launched is a very happy person. People who bought now have higher prices. There is a tremendous increase in prices.
E What added value does the project have? Why should someone buy into this project and not in another project?
If you look at the project, there are many added values. First, there is the master developer Solidere. The company itself brings credibility to any project. And Solidere does a wonderful job. Second, the location of the project. It is overlooking the sea. Another added benefit is the proximity: in five minutes you are everywhere. So there are many elements. But again when you buy a property, it is a very personal thing. For some people, things are very important but I think for most of the people the elements we have covered in our development are appealing. If you like to be in Beirut and you want to have something calm, close to everything, overlooking the ocean, in a master development from a well-known name, then we have a good product.
E At the World Economic Forum this year, you said you will shift focus to emerging markets — is this a part of it?
What happened is that with the crisis, many people have to rethink. We are very strong in Dubai. We have a very strong foundation there. What we do is a pitch-and-catch strategy. We take the best practices we developed in Dubai and they are pitched out into different countries. For example in Lebanon someone catches our best practices and localizes them and implements them. That makes us a little bit stronger than other people because we have this strong foundation. So that is our strategy all along. And we will focus on emerging markets. Why emerging? Because there is no value added in developed countries. What value added do I have in New York? We really go into countries where we can add value, and the developing countries. Lebanon is a different case because in one sense it is developed, and in the other sense it is still in need for some rebuilding and some assistance. So Lebanon is in a very special situation. But we do believe we can deliver a lot of value to the country.
E Are you planning any future investments in Lebanon?
We are now looking. With the first project we were really happy. You always test the market with the first project. If it doesn’t go very well, you reconsider. But the first project went very well, which makes it very easy to go to the next step. We are actively looking for many reasons. One, we know the country much better, we found strong partners and we have a very positive first experience so, yes, we would like to. We look more to our partner Solidere. It is not an exclusive partnership, but a very strong partnership.