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Beirut Gate rebuilds belief

Nicholas Fraser, executive director of real estate, Abu Dhabi Investment House, is upbeat about investor confidence in Lebanon as Beirut Gate is launched.

Nicholas Fraser, executive director of real estate, Abu Dhabi Investment House, is upbeat about investor confidence in Lebanon as Beirut Gate is launched.

Fraser says that there is a feeling of stability in the Lebanese real estate market as things return to normality after the month-long bombing campaign.

You were caught in Beirut on the day the bombing campaign was launched, how long were you there?

I was only there for three days. We were actually there for a company seminar, believe it or not. The week after that seminar was when we were supposed to have the launch event for Beirut Gate. So we lost about two months, in terms of time.

Has there been significant fallout from the conflict on the real estate sector?

People have been asking me if prices have gone up or down. But it’s neither, because there haven’t been any sales or transactions. So there has not been any evidence to say prices have gone down.

The feeling is that stability has returned, I was there the other day. I went out at night, the streets are packed and there were people in cafés. You’d be hard pressed to think that six weeks ago there were F16s flying around the place. It really is incredible.

Have there been any significant distress sales of development land in the market?

I’m not saying this for the sake of it, but there hasn’t been any distress sales of property in Lebanon. We have had people ringing us up asking: ‘Do you want to sell?’ Well, no we don’t want to sell. Of course they are looking for distress sales, but I am not aware of any distress sales. I think people realised this wasn’t going to be drawn out over a long period of time

What about the physical impact?

In terms of what you see when you are there on business, it looks like the country is back to normal. That said, I didn’t visit those areas that were really affected. If I had, perhaps I would have a different perspective. Clearly there is a lot of infrastructure damage, but that hasn’t hindered our decision to carry on with the progress of the project.

Has your projected return on investment for this project been adversely affected by the bombing campaign?

Our business plan is not to build out – it is to get building permits and sell the plots with the benefit of consents. So our ROI [return on investment] target is not affected. We have
lost six weeks, but we had an overall 18-month investment target and we are still on target for that.

When do you think we will see a noticeable upturn in Beirut’s real estate and construction sector?

My gut feeling is that when Eid, Christmas and New Year are out of the way and we get to the spring – assuming nothing untoward happens between now and then – we’ll start to see the momentum gathering again, because there will be enough breathing space between what has happened this year, and that is when things will start moving.

One of the sites is close to being sold anyway, and in the next six to eight weeks we’ll announce sale of at least one of our plots, which will give a confidence boost not only for our project, but for the whole city and country as a whole.

Has investor attitude changed as a result of the conflict?

If you are talking about downtown Beirut, the market for those apartments is, generally speaking, the Gulf. I don’t think the Gulf people are going to be put off by going back to Beirut. They like Lebanon, they like Beirut, and there is a comfort factor being halfway between Europe and the Middle East. They are not buying for their first home, they probably have two or three anyway, and this will just be another one.

When are we likely to see construction start on Beirut Gate?

The final plans are being submitted to Solidere by the end of the month and thereafter the [Beirut] Municipality. It is even more important now to give a sign that Lebanon is open for business; therefore we are hopeful that the approval process will be swift and not a long drawn out bureaucratic nightmare.

They [Solidere] will probably do everything they can to get this moving. They have said they will, and I think they mean it, because they know they need to give a vote of confidence for the country.

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