The Business Year

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Mustapha Ahmad

CEO, Mercury Development

For us as a company, the real estate aspect of business is very strong. We have been very successful, and we have sold around 90% of all our projects. As a country, other Lebanese developers have also been very successful. However, some have said that there has been a slowdown because of political unrest. We are doing very well, and we are looking to develop more projects when we find the right locations. As far as we are concerned, we are very confident about the future. We are going after it very aggressively and grabbing every opportunity where we can build a sellable and viable home for people. We have many offers for projects, but we like to pick and choose prime locations where we can build a quality product at a quality price. As for the future, we have tremendous confidence in Lebanon. Even with all the obstacles, the market has always overcome adversity. We are very confident, and that is why we have over 15 projects and we are looking for more. We are not going to stop now. Our designs are completely different from what is on the market—they are not just brick and stone.

Bassim Halaby

Chairman & CEO, Benchmark

Despite investors’ wait-and-see attitude toward persisting regional uncertainties, the Lebanese real estate market stood its ground in 2012 due to strong fundamentals pertaining to demographics, land scarcity, a sophisticated banking sector, and support from the Banque du Liban. To put that in perspective, despite a year-on-year 9%-10% decrease in both 2012 construction permits and sales transactions, land prices have stabilized, but property prices have declined by 10%-20%, thus attracting hesitant expatriate buyers and reducing the gap created by the absence of GCC investors. Moreover, FDI from Lebanese expatriates has risen slightly, while the low-medium residential category was still performing in suburban areas. Besides the strength of its market fundamentals, the sustainability of Lebanese real estate is also attributed to high-quality products and services offered by the medical, educational, entertainment, tourism, and retail sectors. All mentioned factors have contributed to the flat state of Lebanon’s famous “stair-case model,“ which means the real estate sector is expected to eventually pick-up after a period of stability. In other words, it is currently a “bear“ market; unless you have to buy, you are waiting.

Hassan Kronfol

General Manager, Hassan Kronfol

The sector is not performing well these days because of what is happening around Lebanon in the Middle East. We started to feel this slowdown two years ago, when Syria’s problems started. This is affecting our sales a lot. For the last five or six months, Lebanon was affected directly by Syria’s affairs and there were heated debates on TV that really hit our business. For the last six months, it has been really very slow. There is no fear, though. The real estate sector is very slow moving now, but it is on solid ground. Lebanon is small and the main real estate is in the capital and its suburbs. There is a lot of natural demand. End-users want to use these apartments, and they don’t want to buy apartments for making money. There are many Lebanese expatriates and they have children that want to come back to buy housing. There is no fear for the real estate market, and the proof behind this is that after two years of slowing down, prices are almost the same. Sometimes there are people who give a discount to sell quicker, but, generally, the market price is stable; there has been no crash in the market. The land is very expensive. If in another country, there were a few years of stagnation, the price would fall down directly, but here there has been only maybe a 10%-15% decrease. Generally, the price is the same. Another point about apartments is that the price now does not reflect the real cost; the real cost is higher than the actual cost now.



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