Real estate sector sets new highs
The real estate sector continued to perform well in the first quarter, up 41 percent on 2009 to reach a record 22,059 transactions, according to a Bank Audi report sourcing the General Directorate of Land Registry and Cadaster (GDLRC). Sales transactions to foreigners surged by 19 percent, while there was a significant increase in the overall value of property sales, up 110.3 percent to a record high of $2.1 billion. Average value per property has correspondingly spiked, up 49.3 percent to $950,000.
Beirut saw the highest increase in property prices, attributed to the shortage of land. However, the 87 percent surge seen in the first quarter is likely due to there being a small number of overall sales but at a high value. With property prices rising, so have rents. According to a study by Cushman & Wakefield, the capital’s retail market has steadily expanded and rents have risen, which they forecast to continue this year. Prime retail areas in the capital, including downtown, Achrafieh, Verdun Street and Kaslik Street, are now ranked among the top 10 areas in rental prices in the Middle East and North Africa, according to the study. Building activity is also on the up, with the Order of Engineers in Beirut and Tripoli stating that newly issued construction permits totaled 3.8 million square meters in the first quarter, up 65.8 percent on the same period last year.
Aabar to open Dead Sea hotel
Abu Dhabi’s Aabar Investments is to invest $42 million in a new Jordanian company to develop a hotel and convention center at the Dead Sea.
A joint venture with the Dead Sea Touristic and Real Estate Investment Company, the hotel will be run by an international chain, reported Maktoob. Aabar, which has stakes in Daimler and Virgin Galactic and is owned by the Abu Dhabi government’s International Petroleum Investment Company, reported first quarter profits of $430 million. The firm entered into a $800 million loan agreement in May with local and international lenders to fund expansion over the next three years.
Qatar buys Harrods
The investment arm of Qatar’s sovereign wealth fund, Qatar Holding, last month bought the iconic London department store Harrods for a reported $2.2 billion. The store, acquired in 1985 by Egyptian businessman Mohamed al-Fayed, has been under-performing in recent years but Qatar Holding was “specifically selected” for its “vision and financial capacity to support the long term successful growth of Harrods,” according to a spokesperson.
The deal adds to Qatar’s growing portfolio of costly investments in the British capital, which includes a stake in Songbird Estates, which controls more than half the buildings in the Canary Wharf business district. Qatar is also the second largest investor in the London Stock Exchange Group.
Natural treasure could fall from grace
According to An Nahar newspaper, The United Nations Educational, Scientific and Cultural Organization (UNESCO) is threatening to place Lebanon’s Kannoubine Valley on the ‘World Heritage Site in Danger’ list, which is the first step toward removing it from the World Heritage list. This is mainly due to the violations of the valley management principles set by UNESCO back in 2007, such as rampant unplanned construction, new restaurants opening that do not conform to the regulations, posting of political flyers along the walls of the valley entrance and trash burning. Consequently, Minister of Culture Salim Warde sent a letter to the Lebanese President Michel Sleiman and the Maronite Patriarch Mar Nasrallah Boutros Sfeir, as well as the Ministry of Interior, asking for their support to preserve the site and take adequate measures to handle these violations, said the newspaper. UNESCO’s World Heritage Center considered the violation as threatening to the features which made it of special value and earned the valley its original listing. The center also proposed that the authorities ask for international assistance to set new guidelines and stricter rules and regulations, which would help the director general of antiquates control and protect the valley.
Beirut gets ugly
The construction boom underway in Beirut has received negative coverage in the British press over the past month, lamenting the loss of the city’s heritage, its Ottoman-era buildings and the little green space that remains in favor of tower blocks and plenty of concrete.
An article on the British Broadcasting Corporation’s website starts with architect Assem Salaam saying: “Beirut is an ugly city.” Robert Fisk’s article in The Independent newspaper is entitled “Beirut is determined to kill its rich Ottoman past,” and The Guardian ran a commentary called “The battle for Beirut’s buildings.”
The argument is that Beirut is losing its identity to real estate brokers bent on turning the capital into the next Dubai, while the city’s distinctive architecture, already battered by the civil war, is being lost to cater to speculators and wealthy expatriates seeking second homes.
Closer to home, Lebanese daily An Nahar ran an article on the destruction of Beirut’s heritage along with a searing cartoon depicting a hammer in the shape of a tower block knocking down one traditional Lebanese house after another. Politicians have also waded into the debate, with Progressive Socialist Party leader Walid Joumblatt saying his main concern during the May municipal council elections in Beirut was to preserve traditional buildings and green spaces.
“I am calling for the preservation of neighborhoods…being invaded by real estate brokers,” said Joumblatt to An Nahar.
But at the same time, international media have put Beirut in the spotlight as a top destination to visit, with The Guardian running an article entitled “Beirut is back and it’s beautiful,” and The Financial Times running a travel special entitled “Lured to Lebanon.”
Knowledge Economic City launches IPO
Saudi Arabia’s Knowledge Economic City (KEC), one of six “smart cities” being developed in the kingdom, launched a $272 million initial public offering (IPO) in late May. The IPO, which will offer 30 percent of the company through issuing 102 million shares, will help raise the firm’s capital to $906.7 million, reported Reuters.
Expected to attract $8.5 billion in investment, the 4.8 million square meter project in the holy city of Medina is slated to have 30,000 residential units and attract the information technology, health and education sectors. The state-owned King Abdullah Foundation, Savola Group, Taiba Investments and the Binladen Group are among the largest shareholders in the KEC.
Other smart cities to be built to cater to Saudi’s growing population include the King Abdullah Economic City, Prince Abdulaziz bin Mousaed Economic City in Hail, the Jazan Economic City south of Jeddah and the Sudair Industrial and Business City on the outskirts of Riyadh.
Sharjah to allow freeholds to foreigners
The Emirate of Sharjah has passed a draft law that will allow the sale of freehold property to foreigners, but only if the ruler gives approval. Emirates Business 24|7 reported that the Sharjah Executive Council and the Sharjah Consultative Council (SCC) passed the law, which includes an article that allows registration of properties bought by United Arab Emirates and Gulf Cooperation Council nationals. “However, the same article also states that the registration of properties for foreigners [including non-Arabs], is subject to the ruler’s approval and order,” a source at the SCC told the paper.
Sharjah, one of the poorest Emirates, was expected to pass freehold laws to entice investors for the mega projects currently being developed, such as the $4 billion Sharjah Marina and the multi-purpose, 60 million square feet Al Nujoom Island, which is to have 1,000 villas completed within the next 18 months. The new law is expected to be enacted soon.
