Get Ready for an Encore Success Story
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A vast venture in the field of construction business, Project Lebanon 2009, the 14th International Trade Exhibition for Construction Technology, Building Materials, Equipment and Environmental Technology for Lebanon and the Middle East, brought together 21 nations to its more than 16,000 m2 of exhibition halls at BIEL, Solidere. Between June 16 and 19, the total registered attendance of Project Lebanon 2009 was more than 17,000. The underlying secret of this success was the promotional incentives of the organizers, IFP, in showing Lebanon’s importance as an emerging market and confirming its significance as a doorway to the broader market of the Middle East. Project Lebanon 2009 suggested the direction of future development in many phases of the construction industry. Nevertheless, a success story is repeated every year mainly because Project Lebanon provides unique coverage of the present by showcasing the latest in the building industry, and offers fascinating glimpses into the future by securing agents and new markets to various exhibitors.
A Country of Opportunities
Project Lebanon 2010, the 15th International Trade Exhibition for Construction Technology, Building Materials, Equipment and Environmental Technology for Lebanon and the Middle East, is held at a time when, due to the global credit crunch, projects are being cancelled or delayed in former hot spots of the region. Lebanon’s construction sector stands out as an exception, with strong demand for residential and commercial properties pushing the industry to new heights. There are also opportunities for attracting foreign investors to infrastructure projects. The Council for Development and Reconstruction (CDR) is responsible for tendering and procuring funding for government physical infrastructure projects (electricity, telecommunications, roads, and public transport), social infrastructure (education, public health, social and economic development, land use, and environment), basic services (water supply, wastewater, solid waste management), and productive sectors (agriculture, irrigation, ports, airports, tourism, and government buildings). According to the latest CDR progress report, there were 1,085 projects in progress valued at $2,450 billion by the end of 2008. Public infrastructure opportunities mainly lie in roads and highways, ports, electricity, education, solid waste, wastewater, and water supply. As of the end of 2009, CDR had a total of $1.8 billion in loans and protocols ratified by parliament but not yet disbursed. As of September 2009, CDR had a total of $850 million in loans awaiting parliamentary approval (including financing for the private sector). In addition, the CDR had nearly $600 million in grants mainly related to pledges prior to Paris III and earmarked for public investments for post-July 2006 war reconstruction CDR has already spent part of this assistance. In addition, donors pledged $2.7 billion in project financing at the Paris III Conference. The CDR has a limited absorptive capacity and targets annual spending at around $750 million.
$7 billion real estate investments in 2009
Lebanon’s Economy and Trade Minister Mohammad Safadi recently said that real estate investments in 2009 reached $7 billion. This success is not so surprising. Real estate activity in Lebanon somehow weathered off repercussions of the global financial crisis that hit peer Arab markets. As a matter of fact, the property market in Lebanon, and in particular the housing market, seems to be benefiting from its Arab neighbors’ troubles. With the crisis engulfing Dubai and other GCC countries, Arab investors and wealthy Lebanese expatriates have been moving money into Lebanon’s property market. This strong demand has in turn fueled a continuous upward trajectory in property prices in the country. Figures released by the Directorate of Real Estate show that indicators of the property sector in Lebanon, namely the number of property sales transactions and the value of such transactions, witnessed an increase in 2009 and the first four months of 2010, bucking the trend of dwindling real estate activity across the MENA region and the globe at large. A report released by Bank Audi indicates that the first quarter of 2010 saw a significant surge in construction activity in Lebanon, with a strong hike in the issuance of building permits. The report states that Lebanon has once again successfully countered the global economic crisis, this time at the level of real estate and construction activities, mainly driven by expatriate and Gulf demands. Local demand has also been increasing in recent years as a result of a steady growth in population and evolving lifestyles.Actually, Lebanon has established itself as the region’s ultimate hot spot for urban development ventures, with an impressive number of multi-million dollar projects. Some of the mega-construction projects launched in 2009 include: the $800 million BeitMisk, the $500 million Venus Towers, the $300 million Beirut Souks in Beirut’s Central District, and the $200 million Sama Beirut (the highest skyscraper in Lebanon). In addition to luxurious estates, affordable residences, towers, and resorts are flourishing in the Lebanese capital and other major cities, including: Skygate, Sioufi Towers, Les Étages, Hochar Tower, Al Majal, Les Dunes de Faqra, Sky Towers, Bahri Gardens II, and Yarze 5668.
2,000 new hotel rooms will open in Lebanon over the next three years
Global hotel and hospitality consulting firm HVS estimates that more than 2,000 hotel rooms of confirmed, branded supply are scheduled to open in the next three years, with about 938 new rooms coming in the market in 2013. It adds that developers and investors are considering a wide array of brands for the Lebanese market, as international hotel firms with a presence in Beirut are keen on expanding their position in the country, while new chains are likely to deliver their entire portfolio of budget, mid-market, upscale, and luxury brands in the country. In addition, hotel companies plan to add residences to be sold on a freehold basis. Such branded residences are usually maintained by the firms running the hotel, while residents benefit from luxury living and access to the hotel’s facilities. HVS notes that many lifestyle and fashion hotel brands are seeing the benefits of opening in Beirut to take advantage of a trendy local market and the city’s position as a fashion and cultural capital. On the other hand, HVS notes that Beirut is increasingly becoming a market with high barriers to entry, as prime land is becoming scarce and development costs are increasing. It expected investments in the hotel sector to pick up considerably in Beirut, but cautioned that the sector needed long-term political stability.
Capital inflows into Lebanon up by 65% in the first quarter of 2010
By end of 2009, Investment Bank EFG Hermes released a report on MENA economies, in which it placed Lebanon on its positive watch list in terms of overall macroeconomic outlook in 2010. EFG Hermes divided MENA countries into three categories: top picks, a positive watch list, and constrained economies, and each country was placed in one of the categories based on its combined outlook regarding growth, macroeconomic indicators, stock market investability, and socioeconomic indicators. Other than Lebanon, Oman, Morocco, and the UAE were on the positive watch list, while Saudi Arabia, Qatar, and Egypt were the top picks, and Kuwait, Algeria, Bahrain, and Jordan were regarded by EFG Hermes as constrained economies.
The study noted that Lebanon was among the strongest performing economies across several indicators, of which foreign investor’s access, on which Lebanon received a score of “high”. This indicates that Lebanon is likely to attract a high level of foreign direct investment in 2010. The EFG Hermes report proved right. Lebanon posted a record 65% rise in capital inflows in the first quarter of 2010 compared with the year before thanks to growing investor confidence, a Bank Audi report said. Investment was “buoyed by the increased confidence in the Lebanese economy” shown by expatriates, foreigners and tourists, affirming the International Monetary Fund’s expectations for this year, the report added.
Project Lebanon 2010 to connect people and industries in a thriving market
Project Lebanon 2010 is held in such an optimistic market. Most exhibitors at Project Lebanon 2010 aim at entering the Lebanese market.
According to many commercial advisers of embassies to Lebanon and traders, the consumption potential of the Lebanese market regarding construction materials is growing and multi-billion ongoing and planned projects attract exhibitors.
The purpose of the UFI certified Project Lebanon is to promote the construction trade and building industry throughout Lebanon and the Middle East, and stimulate international relations between industrialists, wholesalers, dealers, and professionals.
Project Lebanon 2010 will introduce the latest in construction technology, building materials, equipment, and environmental technology and will give trade investors the opportunity to see the world’s best products and equipment under one roof. It will draw the most active prospects and customers to exhibitors.
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| Read full story in REAL's September issue |
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