A look at Beirut’s major shopping districts
Despite a year of bombs and instability that has seen robust economic growth slow to a trickle, the Lebanese, especially the wealthier residents of Beirut, ably supported by liquid GCC nationals, have hardly stopped spending on consumer items and related services. Although retailers, including restaurateurs, took a knock in February, March and April in 2005 following the assassination of Rafik Hariri, overall retail figures for last year fell only by 15%, ensuring that the $3.5 billion sector is holding steady while, by and large, rents in the main shopping areas have also held their ground. It could, many agree, have been much worse.
The Beirut retail market has become highly competitive in the last 15 years, with, in addition to the natural evolution of traditional retail hubs, the arrival of shopping malls, which have become bigger and better since the first monstrous generation sprung up at the end of the war. And like most urbanites, Beirutis seem to appreciate the convenience they offer. Just look at ABC Ashrafieh and City Mall in Dora on a Sunday.
Traffic nightmare
Beirut’s shopping districts have developed in a haphazard way in the last 30 years. The civil war drove shops and shoppers out of the city’s traditional heart, the Burj, and into the most unlikely places as suburban areas such as Kaslik, Furn al Shebak and Mar Elias were transformed into localized hubs and throughout most of the post-war period shopping areas in Beirut remain unchanged. On the rehabilitation of the BCD, has produced the kernel of a central hub but it is still a work in progress and will not achieve its full potential until the completion of the long-pregnant Souks shopping mall.
The main high street centers in Beirut are the BCD, Hamra, Verdun, and Sassine. These four areas cater to very different customers and are in different evolutionary stages.
What of the environment? One major negative that affects how we shop is the near total lack of control imposed on the city’s traffic. Walking along many streets in Beirut involves negotiating your way around cars parked on the pavement, only to then be faced with the risk of being run over by another vehicle as you step out on to the road. Cars double, in some cases triple, parked, often on the pavement are the norm across Beirut and are mostly tolerated by the local police. This is not going to help the high street retailers win their battle with the malls, and retailers in these areas should understand that they should try and provide proper parking for the customers rather than the pavement in front of their shop.
Old divides
Another unique aspect of the high street retail sector in Beirut is the hangover of the civil war. Whether it is a result of petty sectarianism or dark memories of the conflict, some residents of the Beirut and the suburbs still have a problem with crossing to the “other side” and shopping in either West or East Beirut. Although it is difficult to believe that this is still a factor, many retailers insist that it matters, and in the current atmosphere is unlikely to change any time soon. Although the BCD is unlikely to be affected by the problem the other centers still cater largely to a local population, and will likely do so for the foreseeable future. Ironically, retailers should see it as strength not as a weakness.
The Beirut Central District
The BCD area has the potential to be the jewel in Beirut’s shopping crown. The rehabilitated Nijmeh Square is the most visited destination in Lebanon and the district is the most fashionable in the Middle East. The area immediately around Nijmeh, especially Rue Maarad, is crammed with cafes and restaurants, and in the warmer months the streets are packed with people smoking nargileh, chatting and watching the world go by.
Further down the hill, Rues Allenby and Foch are amassing all the big retail names including a four-floor Aishti emporium. Although there is little to be found that will suit those on a budget, the area features most of the chain stores in Lebanon as well as the designer labels. The area is easily accessible by car and for the time being has adequate of parking. Rents in the area are the highest in Lebanon and are between $800m2-$1200m2.
The Souks project will in theory boost the area but the project has yet to secure a permit for an anchor and there are questions over who will rent there when most of the big names already have stores in the BCD and who will take the department store plot. In 2001, Admic, who had the franchise to bring Les Galeries Lafayette to the BCD were primed to sign, but delays have put this deal on the back burner.
Despite its huge potential, the BCD has recently been brought to a standstill by the national dialogue talks, which saw the whole area being cordoned off and streets closed to cars. Walking through the streets required multiple frisks and to top it off the Lebanese army moved a few armored cars onto the streets and positioned snipers on the rooftops. As any retailer will tell you, this is not the kind of atmosphere that attracts customers and many shops and restaurants in the area gave up and closed while the talks took place. Those that stayed open might as well have been closed. Although this extreme situation is unlikely to be repeated it is an example of the risks that a Beirut city center location involves. The security around the parliament and the sandbagged ESCWA building is likely to continue and could also affect the retail sector in the area.
Finally, the district is experiencing a residential construction boom at the moment and although this is likely to work in the area’s favor, there is a risk that the sale of residential apartments to GCC buyers and expatriate Lebanese might strip the area of soul and at worst create a ghost town due to the part-time residents.
Verdun
Verdun is considered by many to be the premier shopping street in “West” Beirut, and some retailers in the area argue that the area is on a par with the BCD. Take a walk past Starbucks or Le Pain Quotidien and you will see the usual suspects in suits puffing cigars and fiddling with their Nokia 9300s.
Verdun is more a hill than a street and more a collection of shopping malls than a row of shops, starting at the eastern end with the resuscitated Concorde Center and ending at Corniche el Mazraa. In between there are Verdun 730, 732 and Dunes shopping malls with a sprinkling of boutiques. The area is more up-market than Hamra and includes high-end shops such as Zara, Timberland, several jewelry stores, restaurants and cafes. The street is centered on Verdun 730 and 732 and the cafes in these malls are a major pull. Retail rents in the area are roughly around $1,000/m2/year but at the turn of the century were as high as $1,600/m2/year. The area is also very popular with GCC tourists who can stay in the Holiday Inn adjacent to the Dunes Center or one of the many other hotels situated on the nearby Corniche.
The area will soon benefit from two new mall developments, the V5 and the V2. V5 will be a 5,000m2 mall in the center of Verdun and V2 will be a development located near the Concorde center. It is unclear what kind of affect the BCD’s ultimate ascendancy will have on Verdun. They are clearly angled towards the same customers, but potentially there is enough of this kind of business to keep both Verdun and the BCD alive and kicking.
Sassine
Sassine has benefited hugely from the arrival of the ABC mall, which has been designed so that it blends seamlessly into the surrounding street networks. Shoppers in ABC can nip out into the surrounding district, shop and then head back into the mall again. The area is centered on Sassine Square, which features several cafes all of which are popular with locals and the square is arguably the center of “East” Beirut. From Sassine the area includes Independence Avenue which heads down from the square to Sodeco and includes high-end shops and the Gabriel Hotel. Rents in the area are between $800/m2/year-$900/m2/year.
Sassine has, as the retailers like to say, something for everyone. Aside from the more expensive clothes shops on Independence Avenue, the back streets of Sassine have plenty of cheaper stores. The area has a guaranteed customer base due its popularity amongst local residents who don’t want to shop in the BCD, or further a field.
However road access is a big problem. ABC is a big mall served by small streets and on a Saturday evening the traffic of shoppers, cinema and restaurant goers can overwhelm the area. The roads are simply inadequate to cope with the level of traffic.
Hamra
Beirut’s only genuine high street, Hamra is an old favorite for many residents in the capital. Blessed with large pavements, cafes, a good mix of shops where you can find clothes, books, electronics and music, the area has virtually everything you need for a day’s shopping. The institutions of AUB and LAU give the area a city center atmosphere and the area still retains one or two Ottoman buildings as well as some interesting examples of 70s architecture.
Although the area went through some tough times in the early post-war period, recently it has experienced a come back and several chain stores and cafes such as Radioshack, Roadster, Starbucks, Body Shop, Vero Moda have moved into the area. Although this modest gentrification caused some casualties, mainly the much-missed Modca cafe, on the whole it has worked in the area’s favor. Retail rental in Hamra is approximately between $400-$700/m2/year.
However Hamra suffers from the traffic problem. The one-way system around Hamra Street and Makdessi Street moves at crawling speed and more often than not is at a standstill during the daytime, and there is also a shortage of parking spaces. Furthermore the unimaginative use of space in Hamra has done little to boost the area. Without a more organized and daring approach by the local businesspeople Hamra is unlikely to return to its pre-war glory days. The problem is compounded by tenants who still pay old rent. This situation also hampers the natural retail evolution.
Hamra has arguably the most potential of all the shopping areas in Beirut. Its city center atmosphere and large student population is likely to guarantee a high level of visitors. Hamra however is likely to feel the arrival of the Souks in the BCD area and although the district has been already been a drain on the district it is only likely to pose more of a threat over the coming year.
And finally
Two districts that are very popular among Beirutis are Furn al-Shebak and Mar Elias. These area clearly do good business and vacancy spaces in these areas are very low. Rental rates in these areas are between $400m2-$500m2. The low overheads allow Beirut’s small businesspeople to set up shop here and as a result prices are negotiable and competitive.
