Tragedy tumbles downward
Twenty-seven victims perished after a seven-story building in the Fassouh district of Ashrafieh collapsed on the evening of January 15, while 12 more were injured, according to the Higher Relief Council. The combination of poor sandstone construction dating from the 1930s and stormy weather conditions contributed to the devastating crumble of the building, but some experts believe a more direct cause was damage to the building’s foundations due to negligent conditions at a nearby construction site. One vocal urban planner, Abir Saksouk, criticized a 2004 “new construction” law, which deregulates conditions for new construction even though such practices can damage the foundations of nearby buildings if not done properly. “The whole law was defined and fabricated in a way to benefit real estate developers,” she told Al Akhbar newspaper in a January 16 article. More than 15 families in the adjacent building were also forced to leave their homes since conditions were deemed unsafe by engineers from Beirut’s municipality, which had enlisted the help of the Khatib & Alami engineering firm to help with inspections. On January 17, the same day the building’s owner, Michel Saadeh, was arrested and placed under investigation, Lebanese daily An Nahar reported that 20,000 buildings are at risk of collapsing in Lebanon, quoting Member of Parliament Mohammad Qabbani, the chair of Parliament’s Public Works, Transport, Energy and Water Committee, while Public Works and Transportation Minister Ghazi Aridi said that the Jal El Dib bridge north of Beirut was also at risk of collapsing. The bridge will now be torn down. The tragic collapse comes at a time of unprecedented construction of luxury towers within the Ashrafieh area, while several activists complain that Lebanon does not build or subsidize housing for low-income citizens. In August of 2011, Ramco real estate advisors said that more than 125 building sites could be counted in Ashrafieh, commanding up to $5,500 per square meter, as many of the projects are targeted for luxury buyers. In comparison, some residents of the collapsed building were paying as little as LL25,000 per month, around $16, under a rent contract that equates current-day rents with pre-inflationary levels. Successive governments have hesitated to impose a new rental law since it could cause a steep housing crisis, affecting roughly 80,000 people. While the government agreed to pay $20,000 to the families of every victim, the Higher Relief Council has the responsibility of finding temporary housing for those affected.
Kuwaiti help on the way
The Kuwait Fund for Arab Economic Development (KFAED) has stepped up its efforts to galvanize Lebanese infrastructure projects. On January 19, Kuwait News Agency (KUNA) announced that KFAED would spend $146 million to construct a road network involving 11 intersections that will link the Bekaa region with Beirut, while also renovating two lanes and constructing sidewalks over 24 kilometers long. KFAED’s Director General Abdulwahab al-Bader told KUNA that the roads will ease traffic of “passengers and goods between the cities of Beirut and the Bekaa, as well as neighboring Arab countries.” Earlier in the week, on January 17, KFAED and the Arab Fund committed to finance some 85 percent of a $330 million project, which will irrigate roughly 15,000 hectares of agricultural land in the western Bekaa region, while around 100 towns, including up to 340,000 residents, will receive drinking water.
Tycoon’s jail suite
On January 12, a Detroit judge sentenced Lebanese-American construction tycoon Manuel “Matty” Maroun to jail on charges of contempt of court, after his construction firm Detroit International Bridge Company failed to complete supplementary construction on the Ambassador Bridge, despite a February 2010 federal order to complete the $230 million project, according to Bloomberg. The 84-year-old billionaire and owner of the Ambassador Bridge spent the night in jail with the company’s president, Dan Stemper. After his son unsuccessfully attempted to appeal the decision, the two businessmen were freed on January 13 and were ordered back to the Michigan Court of Appeals on February 2 according to the Chicago Tribune. The Ambassador Bridge is one of the busiest in the country and is a crucial link between Detroit and Windsor, Canada, allowing transportation between the auto assembly plants in both regions. By failing to complete two connecting interstates to the bridge, heavy traffic has ensued on several Detroit streets and has caused logistical delays for crucial industries. Maroun’s net worth was estimated at $1.5 billion by Forbes in September 2011.
While Indians were the largest foreign investors in freehold properties in Dubai last year, Lebanese contributed AED629 million ($171.2 million) out of a total pool of AED 39billion ($10.6 billion) spent by foreign property buyers, according to the Dubai Land and Property Department. The pool of foreign ownership sales made up 27 percent of the total real estate market in 2011. Indians contributed 18 percent of the total pool of foreign ownership, which translates into AED6.97 billion ($1.9 billion). Sultan Butti bin Mujrin, the department’s director general, told Al Khaleej newspaper in a January 9 article, “Speculators are out, the property market is becoming mature and investors have become more aware of the significance of long-term investment in the emirate’s real estate sector.” In June 2011, the United Arab Emirates extended visas for investors who spend more than AED 1 million on property in the UAE to three years, a sharp increase on the previous six-month visas, in an effort to boost the ailing real estate market which saw home prices drop by more than half since their peak in 2008.
Build-up in Beirut
Conseil et Gestion Immobilière (CGI), the real estate arm of Audi Saradar Group, announced in a January Bank Audi report that it would be delivering 110,000 square meters of built-up area within three upcoming residential developments in Beirut, to be completed by 2015. In addition to Gemmayze Village and Abdelwahab 618 buildings, where some 60 percent of the units have already been sold, the group is also building Urban Dreams in Corniche El Nahr, which consists of small apartments between 100 and 250 square meters in size. Meanwhile, Beirut-based retail group, Fawaz Holding, plans to deliver larger apartments in their upcoming five-story Perimetre Avenue du Park residential building in Minet El Hosn. When complete in 2015, it will deliver 15 units in sizes ranging from 375 to 1,300 square meters. The company, which owns cosmetics and clothing stores in Beirut, will also have two retail spaces totaling more than 2,500 square meters. On their website, the group claims to have branched out into development of commercial buildings in prime downtown areas, “in its bid to gain a stronghold in the retail business… to guarantee the future availability of prime location in an area of Lebanon where locations are as dear as they are rare.” In the low-rise Wadi Abu Jmil area of downtown, the company plans to build another residential building consisting of eight apartments and two duplexes, with sizes starting at 350 square meters.
Fairmont to bloom by 2016
Fairmont Hotels, a luxury hotel chain which operates 88 properties globally, plans to add seven hotels to its Middle East and North Africa network by 2016, adding to the 10 existing properties and four which are under construction. While eventually planning to add a hotel in Beirut, the first hotel in the Levant will be in Amman, Jordan, where foundation work has started on a 300-room property, to be completed by 2014 with Isam Khatib & Partners, a development firm. Encouraged by an 11 percent increase in revenue at its Dubai and Abu Dhabi properties in 2011, Fairmont looks to expand to other MENA cities, according to regional director of development, Rami Moukarzel. “We are working on key gateway cities, in Saudi Arabia… Beirut is a very important city as well… Doha is another key city that we are looking at,” he told Hotelier Middle East in a December 17 article. Fairmont is owned by Los Angeles-based Colony Capital and Riyadh’s Kingdom Hotels International.
