“[For the real estate market overall], 2012 was one of the most difficult years since 2005. People are used to ups and downs in this country and have learned to disassociate the political developments from real estate. However, we felt that the recession in the sector was the harshest in a long time, and the harshest on many fronts. Capstone is a different story. We just recently closed a very big deal in real estate, probably the biggest deal in the market in many years. We purchased a plot of 2,500 square meters in a very prime location of Beirut: Sursock, Ashrafieh. Capital in this transaction was two times oversubscribed. This story tells you that there is still appetite in the market for a good product where investors can go in not for the short term but the long term, four or five years. People have hope for the future.”
“Because of the size of Beirut, which is small, and because of the high prices demanded for properties, especially in prime areas, the only way to go [for developers] is vertically. There is very little room to grow laterally and it is very expensive to grow laterally. The issue then becomes how do you do it without terribly impacting the heritage. We have taken the view that heritage to the extent that it is genuine heritage, not just any old building, should be preserved at any price. So we have never attempted to build in areas where there are heritage houses that would have to be demolished for the development. In Sursock we built alongside the Linda Sursock Villa in a way that we have allowed its visibility from all angles and we have intended to wed the new structure to the old structure. Some people obviously like that, some don’t. Some developers have not been conscious enough and have demolished old houses that are of character. That is unfortunate.”
“The economy has been really affected by the regional crisis and I think 2013 will be a little quiet, but we are doing fine. In the company we still have three projects [with deliveries] for three years to come and I have told my investors that we will take it easy. We will maintain our clientele, provide all the services and make sure that we will provide [our buyers with] whatever is required. We are not going to be aggressive. We are working on a few new projects that will be something really different in Beirut but we are not actually in a hurry. If we don’t do it next year, we will do it the year after.”
“On the side of sales, the office market will follow the market situation, which is a slowdown on basically everything. However, there is a niche that can be satisfied, which is a luxury office product in a key location with good accessibility and visibility. I believe that there is a market for it and it will endure in 2013. The same goes for office rentals. A lot of supply is coming. Projects in grade ‘A-plus’ office space are usually for larger companies who come here to open regional offices, and the political situation will not be suitable for such projects. But there is a niche for luxury offices of grade ‘A’ or ‘B-plus’; the local Lebanese market will need to buy or rent [such spaces] because Lebanon is where their business is and they believe in the market.”
“The idea for the association of developers is based on the fact that real estate development today is one of the most important sectors of the economy in Lebanon. We believe that development deserves to have an association. You need to negotiate with the banks, with the central bank about interest rates and with the ministries and municipalities. I also believe that one of the missions of this association should be to secure statistics. If I want to start a new project today in Sin El Fil or Ashrafieh, a good association and secretariat will provide us with some statistics, obtain information from the syndicate of engineers and act as the link between all stakeholders. It must be a professional association, having nothing to do with political [interests] but only defend the interests of developers.”
