Georges Chehwane is the president of Group Plus, one of the largest media groups in the Middle East. He is also the president of Plus Properties, a Group Plus subsidiary specializing in real estate development as well as marketing and promotion. Plus Properties is currently handling the marketing for the newly launched $500 million Venus Towers project on the waterfront of the Beirut Central District. The project is developed by Venus Real Estate Development Co., which comprises several partners and was launched in March 2008 specifically for the development of Venus Towers. The project consists of three luxury towers offering high-end apartments. Construction is slated to start this month, with delivery expected in five years.
E You have said that you sold $100 million worth of units at the launch event on September 24 and 25, based on a special pre-launch value. What is that value?
It was $100 million when we released the press release, now the final figures are $125 million. We sold so much due to three things: attractive launching prices, a huge campaign and the location. We had three categories of pricing depending on the views. The prices were $5,500 per square meter, $6,500 and $7,500. Sea view has a different pricing, mountain view is different, and “no view” is the least expensive. We also made an offer to those who pay 50 percent — they got a 25 percent discount. So if you remove 25 percent from $5,500, you get $4,125. Now there is no discount and we have even increased the price by $500 for each category.
E During construction, the prices were higher by $500 — will they continue to increase until construction finishes? And what about after delivery?
In general prices will not increase during construction, until we enter the advanced stage of construction. After delivery, nobody knows, but experts say that in two years time, Solidere’s prices will reach $10,000 minimum and $15,000 on the beachfront. The advantage of Solidere is that there is a scarcity of land plots.
E How much of the project was sold to Lebanese and how much to Gulf buyers? Can we differentiate between end-buyers and investors?
Around 75 to 80 percent were sold to Lebanese, and the rest to Gulf buyers. Most of them are end users; we might see 10 percent investors.
E How is the project financed? And did you offer any payment plans for customers?
The owners have funded a certain amount, and now they have got financing from the sales. Basically there are three sources: the original investment from shareholders, from the banks, and from the sales. As for the payment plan, it is for five years. If you paid 50 percent and you got the 25 percent discount, then you have five years to pay the rest. Every three months you have a payment. And some people make their payments related to construction. They have a choice.
E I know that last year you participated at Cityscape Dubai and Abu Dhabi. Why haven’t you participated this year?
We have nothing to sell. What we are doing is consolidation. There are two kinds of companies at Cityscape this year. The first category are the governmental companies who had to participate because the Dubai government asked them to participate, and the second category are the companies that have problems and want to show people that they are still alive. Since we don’t have problems [and] we are delivering our projects, we don’t need to participate. Our clients know that we are serious and building, so we don’t need to prove anything to anyone.
E You also participated in DOMEXPO in Moscow, and you translated your website into Russian — what is so special about the Russian market?
Because 60 percent of our clients in the Dubai waterfront are Russian, we do that in order to keep them aware of what is happening… It is because Russian people like to be on the beach.
E Have you sold all your projects in Dubai?
Today we have consolidated our projects. We are freezing some projects and delaying them, and starting construction of other projects.
E Are you planning to launch anything new in the United Arab Emirates? And what about other countries?
In the UAE, we have [already] started construction of three projects and we are delaying another three. So for the moment we will be only focusing on Lebanon.
E If we want to compare how different markets have been affected, how would you evaluate the region?
In Dubai, 85 percent of our clients were investors; in Abu Dhabi 30 percent were investors and 70 percent end-users; [the] same [goes] for Lebanon. There were a lot of projects in Dubai and a lot of free zone areas and off-plan sales — that was a major factor that effected Dubai. In Abu Dhabi you only have the Reem Island as freehold.
E Did you have to stop any expansion plans because of the crisis?
Before the crisis, I was planning to expand all over the world. Now we have to consolidate our Dubai and Abu Dhabi operations and develop some new projects in Beirut. Our strategy has always been diversifying, that is why we have been safe during this crisis, having some projects in Dubai and Abu Dhabi and some projects in Beirut. I believe for the next five years, Abu Dhabi will be good but Beirut will be better than all the Arab markets.
E Did you also diversify in terms of types of developments?
In Dubai and Abu Dhabi all our projects are on the beach. In Lebanon we have started in Solidere, now we will also start lower budget developments. Now the apartments are $1 million to $1.5 million. So we are launching a new project where apartments cost between $300,000 and $400,000. And we will also launch a new company called Plus Investment, whereby we will call investors to be part of our company. They will be shareholders. It will be Lebanon-based. So we were diversifying in different areas first, then we started diversifying into residential and commercial areas. Now in Lebanon we will start an office building and we will start projects in areas outside Beirut. In Dubai and Abu Dhabi, when we see the market booming again, we will go back. Right now we don’t have new projects in the UAE.
E How much is your company worth?
$500 million.
E What about your Plus Towers project? How much is it worth? In which stage of construction is it and how much has been sold?
We will finish in three years time. It is in the heart of Solidere, and it is a green building. It is worth $200 million. We launched it last year and we sold around 40 percent. Most buyers are also Lebanese.
E Do you feel that sales have slowed down?
Yes, because people buy either during the pre-launch to take advantage of the discount or wait until the building is erected to live in.
E Do you think the financial crisis might have affected it?
No, it is a concept.
