Beirut’s retail rent soaring
The average retail rent in Beirut’s downtown district, at $551 per square meter per year, is higher than any other city in the Middle East, according to a September 20 report covering 269 global retail centers by Cushman & Wakefield titled “Main Streets Across the World 2010.” In comparison to Dubai, which has “far too many shops, not enough people and a recession,” Beirut has an undersupply and shops have high turnover, given the 2.5 million resident population, according to Mike Dunn who worked on the report. The second most expensive retail center in the Middle East is Ramat Aviv in Tel Aviv, with average retail rent going for $505 per square meter per year, and the third is in Lebanon’s ABC Ashrafieh Mall, where the average rent is $479 per square meter per year. Whereas rental rates had dropped in Jordan, Bahrain, Qatar and the UAE, Lebanon was among the countries that showed some increase in demand, as well as Israel, Kuwait and Saudi Arabia. New York’s Fifth Avenue remains the world’s most expensive retail center, where rent hovers around $6,105 per square meter per year.
World’s most expensive flat sold
Brothers Christian and Nick Candy, who bought the famous Monaco home of Lebanese-born financier Edmond Safra in the early 2000s for a mere $15.8 million, have now sold the 5,334-square-meter flat for $308 million, making it the most expensive flat ever sold. The buyer, who is rumored to be Arab, snapped up the two-story penthouse in Monaco on a 97-year lease. Christian Candy, 36, revealed in a 2009 interview that he spent $41 million renovating the property, which includes 30 rooms, a highly secure panic room, a state of the art surveillance system, a media room and a spa with an infinity pool. Safra was 67 when he died in an arson fire in the flat in 1999.
Hefty housing for Beirut’s expatriates
For the first time, Beirut has ranked as the most expensive city in the Middle East in terms of rental housing prices for expatriates, shifting from its position at 28th place globally last year to 10th place this year, according to a survey by EuroCost International. The survey analyzes two and three-bedroom apartments of high quality in expatriate communities in 250 cities worldwide. This year also marks the first time that Beirut has glided into the top 20, surpassing Paris and Abu Dhabi. Bank Audi reports that the upward shift is partly due to “real estate speculation that has generated a strong increase in the supply of high quality housing.” It added that the fall in rental rates in other Arab cities helped push Beirut upwards on the list. Abu Dhabi, the only other Arab city in the top 20, fell from 11th to 12th place in the past year.
Ranking of most expensive cities (rental)
Jordanian expatriates boost housing
Jordan has seen a 14 percent surge in the number of apartments sold in the first eight months of this year compared to the same period last year, reaching 14,109, according to a Department of Land and Survey report. The report put the boost down to the stability of housing prices and the government’s recent exemptions on taxes and fees. Real estate trading expanded 26 percent during this eight month period, reaching 3.5 billion Jordanian dinars ($4.9 billion), but the report also mentioned that real estate-derived government revenues were 7 percent lower than in the same eight-month period in 2009, due to the halving of registration fees from 10 percent to 5 percent and the exemption of fees altogether on the first 150 square meters of any apartment of 300 square meters or less. Zuhair Omar, president of the Housing Investors Society, told the Jordan Times the surge was due to Jordanian expatriates returning home for the month of Ramadan and buying properties before returning to their countries of employment, mostly in the Gulf.
Saving the city’s spirit
“Lebanon considers itself a pioneer in everything, but when it comes to this we are way behind other Arab countries,” said Lebanon’s culture minister Salim Wardy to AFP, in regard to preserving heritage buildings in Lebanon. His remarks followed the September 25 march in Gemmayze, organized by the Save Beirut Heritage association, where hundreds protested at the neighborhood’s new high-rise construction sites. A consortium of heritage groups and activists held signs calling on the government to legally protect designated buildings that reflect Lebanese heritage. The scope of the problem is quantified by official figures, which according to The Daily Star, show that out of the 1,200 designated heritage buildings listed by the Ministry of Culture in 1995, only 400 remain standing today.
March organizer Georgio Guy Tarraf claims “several dozen” buildings will be destroyed by the end of 2010, adding, “It’s a massive shame to lose our heritage — we must all come together to fight this and stop developers evicting any more people or tearing down any more of our history.” According to Tarraf’s written statement, they plan to save Beirut’s heritage by, firstly, reforming the old rental law which would allow original owners to reclaim homes that have been rented out indefinitely to those paying below market rent rates. The group also plans to set up a “rehabilitation fund” to maintain historical districts by using tax revenue from new building permits. Thirdly, they are calling for proper zoning that would limit the height of new buildings in historical neighborhoods. A hotline has been set up to accept eye-witness reports of demolitions, which now require the minister’s signature.
Egyptian housing project under fire
A September 14 supreme court ruling in Egypt upheld a June 22 decision that effectively cancels the government’s sale of 33 million square meters of land to the Talaat Moustafa Group (TMG) Holding, Egypt’s largest listed property developer. The land was for the company’s Madinaty project, for which investors and homeowners have already bought units. The government’s New Urban Communities Authority received $2.3 billion in housing units in return for selling the land, which it should have sold at a public auction according to a 1998 Egyptian law. The deal was under fire as the firm was receiving unusual and first-of-a-kind exemptions on construction fees and free electricity, water and sewage utilities from the government, reported Bloomberg. The $3 billion housing project located on the outskirts of Cairo was supposed to provide homes for 600,000 and have a golf course and hotels. Finance Minister Youssef Boutros-Ghali said the government would come up with a solution to “preserve the rights of all the shareholders and buyers” in Madinaty, according to Reuters Africa. Egypt’s cabinet said it would scrap the original contract for TMG’s estimated $3 billion Madinaty project after a court ruled the deal was illegal, but would reallocate the same land to the firm in a new contract. Also in Cairo, a subsidiary of TMG announced September 1 that it had paid $145 million to buy the remaining 43.7 percent stake in Cairo’s Four Seasons Hotel, which it now wholly owns.
Turkey’s property eyeballed
Turkey is the best location for residential investment in Europe, according to Global Property Guide. The research firm says in its recent report that “property in Turkey is now substantially undervalued using all conventional metrics,” especially since it is the most visited place in Europe after Monaco and London. Low taxes, mortgage rates, and newly voted-in reforms have all given Turkey’s residential property market a boost. “The housing boom’s pre-conditions are repeating themselves in Turkey today,” said Matthew Montagu-Pollock, Global Property Guide publisher. From their height in June 2007, residential prices have fallen by 15 percent nominally, “although the drop may be closer to 30 to 70 percent, after adjustments for inflation,” according to the report. High-end property in Istanbul costs on average $3,210 per square meter, compared to $5,290 per square meter in Madrid and $19,400 per square meter in London.
