SLOW MOVERS? Some shop owners say the project has taken far too long
Despite experiencing a drop in sales revenues of up to 40%, Hamra retailers are confident that the on-going construction work and facelift will eventually help Hamra become a thriving retail area, serving Ras Beirut’s middle-market catchment.
After nearly one year of road works, the rehabilitation of Hamra Street is nearly complete. Roads have been asphalted and paved, pavements widened, trees planted and the colorful overhead jungle of electricity wires has been buried underground. The renovation effort is part of a $12 million project to rehabilitate five major streets in Beirut (including Corniche al Nahr, Monot Street and Barbour) and paid for by the Arab Fund for Economic and Social Rehabilitation. The Council for Development and Reconstruction (CDR) had earlier appointed Dar al Handasah Nazih Taleb & Partners to design a new Street.
However, while most shopkeepers praise efforts to upgrade what was once Lebanon’s main shopping boulevard, a few claim that the project has taken too long to complete, resulting in a loss of revenues of between 15% and 40%.
“Of course we have had less customers,” said Hala Shaftary, store manager of Librarie Antoine. “For months Hamra was hardly accessible. On days when they were working in front of the shop, we hardly saw any customers. But I think we suffered less than others, as we have a lot of regular clients.” According to Librarie Antoine’s general sales manager, Emile Tyan, the 40-year-old Hamra store is the best performing of the chain’s ten outlets. He estimated a loss in sales of 15%. Elsewhere, Mohamed Bushnak, manager of Starbucks Hamra, the American coffee chain’s first branch to open in Lebanon, estimated a loss of up to 20%, blaming the lack of parking.
Ghassan Mahfouz, managing owner of Marilou Women’s Wear, estimated his losses to be some 35%. However, he did not to place all the blame for bad sales figures at the government’s doorstep. “Business has been going down since 1997, ” he shrugged. “Business was good until then,” he said, “then it went down by some 20% a year. We are in a recession and the middle class is suffering.” Some retailers are less forgiving. Most volatile among Hamra’s retailers is Georges Moujaess, who founded Roi Des Frites in 1967. The snack bar is one of the most famous fast food outlets on Hamra and is normally open till the early hours of the morning. The construction work forced Moujaess to a hang a banner reading “The King is off due to works,” in front of his closed facade for the two months he was forced to close. The closure cost him $60,000, while overall business has been hit by the lack of pedestrian traffic.
Moujaess blamed the contractors for the delay, claiming they worked slowly to earn more money and that the whole project had been flawed from the start. “They dug up the road twice. First they did the sewage and water and then they closed it. The next month they opened it again to fix the electricity.”
Aynan Bassam, secretary of the Hamra Traders Association (HTA) sympathizes but does not agree with all the complaints. He estimated the average losses of Hamra’s shopkeepers not to exceed 15%, while according to him the project has been largely executed according to plan. Currently, most of Hamra Street is open again to traffic and heavy works are only taking place in front of Hamra Cinema. The project will be completed when the Fransabank building is reached.
“The project started on May 12 and is due to be finished on June 31, which it will be,” said Bassam, who owns Al Bassam, a 650m2 ladies fashion and lingerie store in the heart of Hamra. “The contractor gave us a choice,” Bassam said. “Either to execute the works fast, which would mean the area would remain closed for several months or to do it in stages. We chose the latter.”
The main work was carried out to replace 2,000m of Hamra’s 50-year-old drainage and sewage system, which was dealing with waste and rainwater with one 6-inch pipe, which, in heavy winter rain, would flood, creating a terrible stench. Now, two wider and separate pipes take care of the effluents. The project is in anticipation of the completion of the wastewater treatment plants being built in Ouzai and Dora. The South for Construction’s project manager, Rabiah Dejhaim, said traffic would return to normal by the end of June and admitted that work may have seemed to drag on, but said this was due to special seasonal requests. “It was the HTA and others who asked us not to work during Christmas and the February shopping festival,” he said. “That’s why we closed and opened the street again, and had to ask for an extra $2 million for the total of five streets.”
Still the reality is that business suffered and it wasn’t just the shops. Crowne Plaza’s Sales Manager Ziad Bassila estimated a 30% lower occupancy rate, which increased when the heavy machines reached the hotel entrance. Najib Nasser, manager of the Plaza Hotel, said: “we suffered like anyone else, as for three months we hardly had any customers.” He was nonetheless realistic about the situation. “I don’t like to point fingers,” he said. “Hamra Street is much better now. Let’s hope it will only get better in the future.”
It should. Before the war, Hamra was everything Beirut stood for. It was not just the city’s high-end shopping street, but also a place to go out and have fun. Hamra boasted no less than ten cinemas, and a string of cafes and clubs. Those who have cited the demise of the Modca Café (rented to the Vero Moda chain for $20,000 a month) as the final nail in Hamra’s cultural coffin have missed the point. The street is prime retail with rents that have still to reflect its potential. Bassam, who can remember the so-called good old days, is convinced Hamra will get back on its feet. To him, the rehabilitation of Hamra Street is but a first step. His dream is to see it turned into a pedestrian zone.
The retail experts point to the thorny issue of old rents as a factor that held up Hamra’s post-war development. “The biggest problem facing Hamra after the war was the large number of displaced people who lived in the many empty buildings,” said Raja Makarem, managing partner of Ramco Real Estate Advisers. “This gave the area a shabby, insecure feel.”
Today, the squatters have mostly left and Makarem believes that Hamra has all it takes to become a genuine highstreet and the retail backbone of the area. Crucially, he does not see either Verdun, downtown or the rise of shopping mall culture as a major threat.
According to Makarem, Hamra is affordable. Today, the average rent for new retail space is between $500-$600 per m2 a year. At Hamra’s more affordable poles, rent is even cheaper, with shops at the Sadat Street junction offered for a mere $300 per m2 a year. And it has a social fabric. “Someone coming from the mountains to Beirut will not feel comfortable in downtown, where he can’t even pay for a coffee,” said Makarem, who lives in Hamra. “Hamra is the only place that still has the fabric of old Beirut, a place where rich and poor, Christians and Muslims can meet. What used to be downtown before the war will become Hamra: the melting pot of Lebanon.”
Cliché or not, he has a point. It is a target rich environment, serving the area’s relatively affluent community, a significant percentage of whom work in or attend the Lebanese American University, the American University of Beirut and the Law Faculty of the Lebanese University. It is also close to the beach and the Downtown.
Hamra measures some 2 km2, hosting 1,000 retail outlets, 500 companies, two main hospitals, several smaller ones, 450 private clinics, 65 banks and 24 hotels, among which are the Commodore Le Meridiene, Crown Plaza and the nearby Gefinor Rotana. It has a population of 20,000 and this does not include the 13,000 students and 22,000 employees. The area has an estimated 100,000 visitors a day.
“I’ve got high hopes for Hamra,” said Makarem. “With the new city center and Verdun both targeting the upper segments of the market, Hamra is giving a chance to reposition in the middle market segment. This would entail a gradual upgrade of the street’s merchandising, and this is exactly what seems to be happening after an initial shift to the lower end of the market with the likes of Eldorado, Akil and Big Bros.”
Innovation has helped. Hamra’s cinemas although beautiful, remain unrestored since the 1970s and are not in touch with modern cinema-going trends, which dictate a ‘more screens for less seats’ policy. Today, following a $2 million renovation, the old Eldorado cinema earns its owners an annual rent of $250,000, as a 4-storey budget “department store” and one of the street’s best performers. However, the trend is mainly heading up-market and in 2003, many new outlets such as Vero Moda, Jack & Jones, Dunkin Donuts, La Senza and Librarie Orientale have opened in Hamra Street. However, apart from the Crowne Plaza much of the Taj Tower’s 5,000 m2 retail remains unoccupied.
“Of course, we have been affected by the works,” said Taj Tower owner Omar Ramadan, who is asking for an average of $625 per m2 a year for his new shops. “But we’re also in the process of refurbishing the building, as we separate the entrances of hotel and mall. Now that the street is finished we hope things will get better.”