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Ramco’s Quarterly

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Prices still on the rise in Ashrafieh despite market slowdown

After conducting a study of residential properties in Beirut, we were surprised to learn that despite prices overall not moving much over the past three years, there are some areas that have bucked this trend. Five neighborhoods in Ashrafieh have increased by 10 to 21% during 2014.

  • Mar Mikhael, one of the most up and coming neighborhoods of Beirut, went up by 21% and apartment prices are now between USD 3,500-4,500 per SQM for apartments in new buildings on the first floor.
  • Saydeh is attracting new developers. Prices went up by 16% to reach USD 3,000-3,600 per SQM on the first floor.
  • Sagesse still has several empty plots of land that are now being built. Prices went up by 14% to reach USD 3,500-3,800 per SQM on the first floor.
  • Adlieh-Museum (Mathaf) has become very popular again lately. Prices have only increased by 10% and the neighborhood remains one of the cheapest areas of Ashrafieh at USD 2,300-3,400 per SQM on the first floor.
  • Saifi has some very charming residential streets and has some very beautiful new projects. The area has also increased by 10% but has some of the highest prices in Ashrafieh that start at between USD 4,200-6,500 per SQM on the first floor.

 

So this may be a good time to buy in these areas, before they get more expensive. To see a list of properties for sale in Ashrafieh, click here.

Beirut Central District Special

Saifi village

One of the earliest residential neighborhoods to be completed at the reconstruction of Beirut Central District (BCD) at the end of the 1990s, Saifi Village was a quasi pilot project to test the potential of downtown Beirut. Located at the south-eastern end of BCD, in the old carpenters’ quarter of Said Akl Street, Saifi Village is a highly atypical residential  neighborhood of Beirut. Well restored and immaculately planned, Saifi Village is unique in Beirut. It was immensely popular and vacancies were extremely rare. However, despite its many advantages, Saifi  Village is not totally unaffected by the general slowdown in the real estate market of Beirut. Selling prices are stable (sometimes on a slight decrease), rental values are dropping, more and more retail units stand vacant, and two projects have been altered or put on hold.

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Verdun

Verdun is a versatile, multi-faceted address that enjoys a very solid reputation. It is a jigsaw puzzle of residential, commercial, and business hubs. Over the past few months, several residential projects were introduced on the market and ABC Verdun Mall is planned for 2017. However, in the medium term, the neighborhood remains dominated by its commercial and office structure. Verdun Street is bounded by 58 plots on either side of its 1,370-meter-length. About ten of these (around 17 percent of the total number of plots) have strong development potential. Some are vacant (currently used as parking lots) while others have old structures that could be torn down to make room for new buildings. Verdun has two distinct areas that offer very different characteristics: Northern Verdun between Concorde Square and Goodies and southern Verdun from Goodies to Mazraa Boulevard.

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The F&B industry drives the retail market

The commercial landscape of Beirut evolves apace with restaurant operators’ appetite. The F&B industry undoubtedly dictates the development of commercial hubs across the capital. F&B operators move in tandem from one location to another. Growing demand for a particular area has immediate repercussions on asking rental values. When they migrate, they also do it as a group, and prices drop sharply. Within a few months, a neighborhood could go from being a slumbering residential area to a buzzing attraction hub to night prowlers. It is a mad race then between established and startup F&B concept operators to find the best locations – at the best deals. The mood of the F&B chiefs makes or breaks a particular location. Retail areas move at the rhythm of their whims – as testify the following four examples: Maarad Street, Gemmayze, Mar Mikhael, and Badaro.

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Beirut Central District Special

Ahmad Chaouki Street

In its haydey, Ahmad Chaouki Street, which turns into the Avenue des Français at its eastern end, was reminiscent of the Promenade des Anglais on the French Riviera in Nice. It has since been renamed (Ahmed Chaouqi Street). This wide avenue, one of the widest in Beirut Central District, used to lounge the Mediterranean back in the 1960s and was a favorite haunt of the idle strollers, going around the St. George’s Bay. Since the landfill of the former Normandy – renamed Beirut Waterfront District, the street no longer has a seafront façade. However, some of the tall towers dotting its length do have views of the Mediterranean. The area surrounding Ahmad Chaouki Street is a mixed landscape that includes two hotels, Monroe and the Grand Hyatt (temporarily on hold), several residential towers, offices (Starco and New Starco), and retail spaces along street level.

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The Miracle of BDD!

From derelict no man’s land to the up and coming high-tech hub of Beirut and – its creators hope – of the region, Bachoura has made a formidable transformation! A public-private partnership between a development company (ZRE), an incubator (Berytech), and the Ministry of Telecommunications is behind this achievement. Each member of the trio has pitched in with its special expertise – ZRE developing the concept and overseeing its construction, Berytech attracting IT startups, and the Ministry providing broadband internet and telephone infrastructure at preferential rates. Since its launching in September 2012 with a nine-floor building, Beirut Digital District (BDD) currently has renovated three buildings and two more should be upcoming in 2014 and 2015, which offer approximately 7,500 SQM of office space and about 1,500 SQM of retail space. An additional 6,000 SQM are yet to come by 2017.

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The Transformation of Ras el Nabeh

The area of Ras el Nabeh is a near perfect right triangle delimitated by three major highways: Abdallah Yafi (formerly called Fouad I), Bechara el Khoury, and Damascus. Ras el Nabeh is a central residential neighborhood that is located almost midway between western and eastern Beirut. The northernmost tip of the triangle is less than 350 meters from the southern border of BCD, making it a very short walk from the trendiest, most prestigious, and best planned urban environment in the capital. Thanks to the surrounding traffic axes, Ras el Nabeh is easy to access, while its inner streets are quiet, insulated from the surrounding traffic – and its noise. This island-like quality has confirmed Ras el Nabeh as one of the city’s most sought-after residential neighborhoods. Since 2005, the area has been undergoing a surge of activity – construction sites are counted by the dozens. Sales ratios seem to indicate that the area’s popularity is likely to endure in the face of the current general stagnation.

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Top 5, Top 5

Vacant Retail Hubs

Which retail destinations have the most vacancies?

The economic slowdown and the unstable security and political environment obviously affect the retail real estate market. There has never been as many empty retail units across Beirut as there are today. “For Rent” signs dot the windows of the city’s main shopping streets. Certain stores have been vacant for years. Rental values are too high compared to the potential returns that a tenant could hope to achieve. Still, many store owners refuse to drop their asking prices so that they are more in line with market reality. They do not realize that it is better – and more financially logical – to be satisfied with a smaller income than no income at all!

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The Comeback of Badaro!

Badaro witnessed its glory decades during the 1960s and 1970s. Badaro Street was a renowned address with some mythic names, such as Badaro Inn – the last vestige of that past era shut its doors only a few years ago. During the long years of the Civil War and for a couple of decades afterwards, the commercial landscape of Badaro was in decline. The commercial structure that remains today is a hodgepodge mix of rundown grocery stores and outmoded neighborhood service stores (the local hairdresser, pharmacy, clothing store, or bank). Lately, a change has been set in motion. Badaro Street has been entirely refurbished and repaved and there is more and more demand for retail on Badaro Street.

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