Moving Times

What have been the milestones for MENA Capital over the past two years?

We have delivered three projects in 2013. In late 2012, we launched a new project called Bella Casa, and we have also expanded our involvement outside of the country, looking to be more involved regionally going forward. Formerly, we were only involved in building high-rise residential projects, but now we are interested in expanding into other sectors and areas that are new to us.

What makes Bella Casa different from other projects?

Bella Casa is a gated community, on a large tract of land, which is very rare in Beirut, and it will boast amenities that none of the other buildings in the city offer. For example, it has over 5,000 sqm of gardens, a state-of-the-art gym, indoor and outdoor swimming pools, a playground for kids, and a running track. It is basically a place that offers a wonderful lifestyle inside the city.

Who is currently buying properties?

Mostly younger executives, or people living overseas that want to have property in Lebanon. Also, it is popular with people who want their children to be able to live in Beirut when they get started in their lives. People want somewhere affordable, because prices have risen steadily in recent years.

What demand trends can you identify?

Many have moved outside of Beirut to compensate for the significant rise in prices over recent years, but have found it impossible to commute into the city because of the traffic. So now people are thinking that if they can find somewhere a bit smaller, but still inside Beirut, then it’s a sound option. That is why we are now thinking of building not in the heart of the city, but certainly close to the downtown area. Areas such as Ashrafieh, where Bella Casa is strategically located, are attracting more interest, as it is highly accessible because of its proximity to the highway network, and to key areas around the city. Additionally, as a gated community, it is safe for children to play in. As well, we are very conscious of the need for a green environment. The other thing that is important to people, especially younger executives who may have been exposed to other markets, is quality consciousness. Normally, when you say that you are buying a small apartment, it means that you are buying a commercially constructed apartment in which the finishing materials and quality are not that good. This quality consciousness has become dominant in this group. You cannot just simply provide people with an apartment, even with the amenities that I have discussed. They insist on quality construction, and want to know that a quality job has been done on the building. It does not have to be luxurious, but it does have to be well constructed.

How are your international operations evolving, and are you looking at new markets?

We have become more involved in the Iraqi market. We have been acquiring land that we hope to be able to develop into different types of projects, be they commercial or residential. Tourist projects are also a possibility.

How would you assess the performance of the real estate sector in general in 2013?

It has been a weak year, and this is obviously due to the political situation. There is a good chance that it will improve when a government is formed, and that it will truly improve when it becomes clear as to what will happen in our region. Our expectations for oil and gas exploration are obviously a plus, but the government needs to expedite the process, and this is what makes the formation of an effective government so crucial. Everyone seems to be concerned about the fact that there is less construction going on. This is, however, a very strange market. It goes from being virtually inactive to dynamic as soon as positive political action is taken. It has never happened in the past twenty years that people from the Gulf just stop coming here. Since I returned from the US 15 years ago, I have not seen that happen. Even the Lebanese expatriates who used to buy summer homes or family homes have slowed down in their buying habits. Any improvement in the political situation would be favorable, but I do not think that we are going to have a repeat of the period from 2008 to 2010, because there is more supply now. However, once you address this perceived oversupply, prices will begin to improve. The perception on the part of many developers that prices will start to go up again when the political environment improves is not really realistic in my opinion. The first issue that needs to be dealt with concerns supply. Once there is enough demand to begin to account for the supply that is perceived to be there, then there will be an improvement in prices.

Despite the political instability of this region at the moment, what are Lebanon’s advantages for further investment?

Lebanon is a small country, and it went through very difficult times in the past with the civil war. I think people now realize that no one party can dominate the political scene in this country. They can influence it, but they cannot dominate it. And I don’t just mean politically. In general, no one wants a return to the idea of forcing one’s ideas on another through the use of arms. People realize that it is not a viable option, and this is a unique point about Lebanon. Other countries have not been through what we have, and so are resorting to these tactics, as in Syria. I think that the oil and gas sector could be a major advantage for the country, because if people are economically comfortable, they do not need to look beyond their country for funding or capital, something that may force them to choose political ties that they otherwise would not. I think that once we move closer to oil and gas exploitation, people will focus more on the economy.

Where would you like to see MENA Capital in the medium term?

I would like us to continue having differentiated investments and projects. We are seen as quality-conscious, and always bring something different and fresh to the market. We want to pursue sectors that offer this difference. I think that we are perceived as location-conscious in our real estate developments, and that we select good designs for our projects. In addition, the amenities that we provide are well appreciated, and certainly differentiate us in the market. We always look to introduce new features and technologies in our business, and going forward would like to be more complete in terms of what we develop, from residential to commercial to resorts, ultimately adding something special to the market. I just hope we can have a more peaceful future for this beautiful country.