Building boom transforms downtown Beirut
Financial woes in region aiding Lebanon growth
BEIRUT - Blocks of historic Ottoman-era buildings, once pocked by bullet holes, have been majestically restored, and new high-rise apartment towers with mirrored facades front the glittering Mediterranean, signs of an unprecedented real estate boom that is transforming Lebanon’s capital.
Beirut’s building craze, despite chronic political turmoil in recent years, has astonished even the experts, turning Lebanon into an investment haven at a time when other regions - including the oil-rich Persian Gulf - are hemorrhaging cash. Even the seemingly unstoppable city-state of Dubai has hit the brakes after a massive debt crunch there rattled world financial markets.
“The market is continuing to really stun a lot of people and to attract some new players,’’ said Raja Makarem, founder of Ramco, a leading real estate company. He added that Lebanon has seen a 30 percent increase in property value for each of the past four years.
Lebanon has seen a window of relative peace since the devastating Israel-Hezbollah war in 2006 and deadly gunbattles two years later between Hezbollah and its political rivals in the streets of Beirut. Since then, political wrangling has continued, but Lebanon’s many factions have managed to keep their differences from exploding into violence.
Moreover, the financial meltdown that hit Dubai and elsewhere may have helped Lebanon. While real estate buyers in Dubai were mostly investors and speculators depending on bank loans, the demand in Beirut is mainly from consumers buying with cash, Makarem and others said.
Real estate isn’t the only sector booming: Tourists have rediscovered the coastal nation with its beaches, scenic mountains, and freewheeling lifestyle. Earlier this month, officials announced that Lebanon attracted a record 1.8 million foreign visitors in 2009, earning an estimated $7 billion, beating the previous record of 1.4 million tourists in 1974 - just before the 1975-1990 civil war broke out.
For many, especially those who have not visited Beirut in a while, the transformation from the real estate frenzy is striking.
Blocks of elegant buildings with apartments selling at prices ranging between $5,000 and $8,000 per square meter have arisen downtown.
Some are restorations of buildings dating back to the era of 19th Century Ottoman rule, others are brand new ones on plots where rubble had long been bulldozed away. High-rises also now stand on land reclaimed from the sea.
“It’s the new Beirut. It looks nice and modern, but the problem is you have to be rich to enjoy it,’’ said Iman Haidar, a 42-year-old mother of two walking recently through Beirut Souks downtown - a 1,076,400 square foot outdoor shopping mall.
The $300 million mall was built by Solidere, Lebanon’s largest construction and development firm, on the site of a historic souk, or market. But with its high-end retail outlets, it is nothing like the bustling souks that existed there before the civil war, where people from all over the country came to buy everything from vegetables and clothes to jewelry.