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Son of the cedars
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Real-estate agents say BCD properties are still selling
By Michael Bluhm
Daily Star staff
Friday, April 06, 2007

BEIRUT: Despite the continuing presence of opposition protester in the Beirut Central District (BCD), many brokers say real-estate prices have barely slipped because, they argue, today represents the ideal situation to buy or rent. Real Estate magazine editor Lina Safa claims that not a single developer has said prices are falling or projects were cancelled since last summer's war with Israel.

"There's always been war in Lebanon, but the real-estate market was never affected," she asserted in an interview with The Daily Star on Thursday. "Values don't go down, they always go up. It is the perfect time to buy now."

Property values are not suffering, she insisted, although the ongoing opposition demonstrations, which began on December 1, have unquestionably damaged BCD retail outlets and restaurants. More than half of such enterprises in the BCD have closed their doors since December, and it remains to be seen how many merchants will return if a settlement transpires.

Demand persists mostly for already scarce high-end commercial space, so these prices have held firm at around $300 per square meter per year, said Raja Makarem, managing director of the real-estate agency Remco. Annual prices for less-chic offices have slipped from about $150 to $120-$130. Prices vary considerably within the relatively small Downtown area because of market distortions such as stubborn owners, as well as factors such as view, distance to the sea and which floor a space occupies.

"We are finding a shortage of modern ... offices," said Makarem, adding that only four or five buildings can offer the top-notch amenities sought by companies looking to rent in the BCD.

Brokers also report strong demand for residential spaces, although those close to the protest site attract less interest. Calls come in daily from people seeking apartments - predominantly for rent - so prices are holding firm, said Joelle Jmous, a real-estate agent at Coldwell Banker.

"Prices didn't change a lot because some of the people think that it's the right time to make a deal," she said. "There are people who like the risk."

Testifying to the enduring value of BCD land, projects commenced before the summer have not been abandoned - more than 70 percent of the spaces in the massive Beirut Souks project have been leased, said Maha Atallah, VIP real-estate officer at Century 21.

The sector tends to take a long-term view, and agents who spoke to The Daily Star were unanimous that prices in the BCD will rise in the future.

Costs for construction materials, particularly iron, are climbing, meaning that real-estate prices must eventually grow to reflect the greater building expenses. Seen from a long-term perspective, the opposition supporters camping Downtown will only briefly slow the inexorable rise in property values, Makarem said: "All this, what you see now, is temporary. We shouldn't give it too much importance.

"As bad as it is, this is really a good opportunity to buy or lease," Makarem added. "I think Beirut is undervalued - it's a great place to invest money. As our old proverb always says, 'buy at the sound of cannons.'"

The ongoing political difficulties have caused multinational corporations shopping for BCD spaces before the war to adopt a wait-and-see posture, while less risk-averse investors continue to hunt for bargains. Century 21's Atallah is advising her clients to buy both commercial and residential properties.

"If you have intentions of buying, buy it now [and] laugh about it after this situation is over," Atallah said. "This is the time to buy. Later, when the situation is good, demand will be so high, prices will be so high, and they will not find what they can find now. There is no fear for Downtown. Downtown will never lose its cachet."
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