BCD is the prime office hub of Beirut – impeccable urban planning, high concentration of dedicated office BUA, stock of good quality, and excellent amenities are all advantages that very few other areas can claim, and certainly none on such a large scale. These many advantages make BCD one of the most expensive office stocks in town, which post some of the highest occupancy rates in Beirut. BCD, however, also has some major drawbacks that hamper its further development, such as the presence of a number of high-security institutions (the Parliament, a number of ministries, the UN House, the Embassy Complex, etc.), and a higher sensitivity to any security or political upheavals.
A total of about 430,000 SQM of office space already exists in the Solidere-managed area of BCD. An additional 35,000 SQM are currently under construction. Stock is made up of three different types of office profiles:
- A large chunk of the stock is constituted of renovated old buildings, which are poorly laid-out, partitioned into small rooms, have minimal common services and maintenance, and no underground parking facilities.
- Some renovated old stock is of very high-end quality. Although they do not offer parking spaces and have only basic common area facilities and amenities, they do offer an open floor plan that conforms to modern office standards. Their high ceilings and large bay windows make them very pleasant working environments and highly prized by businesses in search of a unique brand image.
- New stock in BCD is the most modern, high-end office stock in the country, which conforms to the highest international standards – large open spaces, state-of-the-art amenities and services, underground parking, excellent maintenance…
Demand for offices in BCD comes from local service companies – media agencies, telecom firms, financial companies, real estate agencies, engineering and architecture firms, contracting agencies, etc. – that require a high profile brand image because they receive customers to their offices. Some large local companies also like to establish their headquarters in the most luxurious business centers of Beirut. Multinational companies were also a traditional source of demand for BCD offices because of the image of the area and the quality of the stock it offers. Lately, however, and due to the strict security measures and the hyper-sensitivity of BCD to any political developments in the country, many multinationals prefer to be located outside BCD. Demand is strongest for northern BCD, around Bab Idriss, the Foch-Allenby area, and around Uruguay Street. Other parts of BCD are less attractive because they never recovered from the protracted sit-ins between 2006 and 2008 and the more recent sit-ins near the UN House. Conversely, Park Avenue or Minet el Hosn, are attractive because of their easy access and modern stock.
By the end of 2012, offices in BCD posted an occupancy rate of around 80% across the different types and grades of offices. This rate has not changed during 2013, although new transactions have been scarce in recent months. Grade A, modern office space, however, posts nearly full occupancy rate.This is a record high occupancy rate for BCD. However, it is dragged downward by a number of factors: • Many buildings are offered in their entirety on the sale or rental market, which has obviously made it difficult to find buyers or tenants. • A number of old renovated buildings are in a deplorable state of maintenance and do not attract tenants.
Sales Prices & ERV
BCD remains one of the most expensive office stocks in town. This is justified by a perfect urban setting, impeccable public maintenance (roads, sidewalks, street lights, gardens, public benches, etc.), and a high concentration of prime office centers. Rental values vary between a low of USD 200 per SQM per year for the least attractive, least well-maintained stock of old renovated buildings, without parking, to a high of USD 400 per SQM per year in the most luxurious and most modern business centers, with wide open spaces, top-of-the-line maintenance and amenities, and underground parking spaces. These rental values reflect sales prices of USD 6,000-7,000 per SQM for core and shell stock. Old stock without parking facilities post sales prices that vary between USD 4,500 and USD 6,000 per SQM for the first floor, depending on the quality of the building and its state of maintenance.
Office Stock in BCD
- Number of office buildings 142
- Total existing office BUA (SQM) 430,000
- Occupancy rate 80%
- Office buildings under construction 5
- Office BUA under construction (SQM) 35,000