That the Lebanese economy is in a crisis seems so obvious that a description is uncalled for. Several luxury developers said this summer that they don’t have anything to announce and a few don’t even answer the phone or open their mail. Developer Joseph Mouawad told Executive in June that his company was yet to sell any apartments this year, and his peer Georges Chehwane said the market is stagnant due to high supply.
But there are insights to be gleaned. Outside of Beirut, development activity is altogether more energetic and fed by real demand. New marketing strategies and price-driven campaigns are important formulas for success, as demonstrated by developers Sayfco (see page 40) and projects such as Waterfront City in Dbayeh (see page 62).
Overall, though, the volume of property transactions was down 8.2 percent year-on-year (y-o-y) between January and May 2013, and values dropped 8.6 percent y-o-y over the same period. The share of foreigners in property transactions remains low at 1.82 percent and is down 71 basis points versus the peak in 2009, according to cadastre data analyzed by Credit Libanais Research. As Bank Audi Research communicated to the market last month, y-o-y, 12.4 percent fewer building permits were issued in the first four months of 2013, but the positive spin is that this is a necessary property market correction.
Developers expect construction to proceed at a slower pace through 2016, roughly, as the existing building oversupply requires time to be sold off. In the meantime, Lebanese investors looking for real estate opportunities can take solace in the prowess of our financial players that have plunged successfully into market niches in Berlin (see page 66) and the United States (see page 72).
beirut in the balance
The panoramic pictures of Beirut that Executive captured last month give indisputable evidence of the city’s continuing evolution toward greater urban density, ahead of the yet-to-happen statistics and pertinent research that are needed to fill in the details. Having those details and analyzing the investments needed to manage the realities created by the load of new buildings may very well become the differentiator between vibrancy and urban death for Beirut.
That is the insight offered by the Executive investigation of the Fouad Boutros road project in Ashrafieh (see page 50). The project has roused a high commotion in the public sphere, and no final decision about these 1.3 kilometers of asphalt will be free from negative repercussions. The scarcity of information about the road, however, highlights the disorder of our urban “development”, which has been disfigured by Lebanon’s convoluted system of disjointed public sector competencies and conflicted planning roles.
Beirut and Lebanon are known to be a mosaic of communities that the great Ghassan Tueni described grippingly in a speech in the late 1990s. Others used the same image, and noted sociologist Samir Khalaf once described Beirut as a “‘mosaic’ of distinct urban communities” and an “exploding metropolis”. That observation is a reason for reflection today, as Khalaf’s words were published exactly 40 summers ago, in 1973.
In this context, the Fouad Boutros controversy shows perhaps that a solution for Beirut’s development dilemma is as elusive as ever. Yet the hope one can derive from the controversy is that awareness of urban development problems is finally reaching the level of public discourse. Residents, non-governmental organizations, officials, experts, businesses, media, elected deputies — we are all valid stakeholders in the debate.
