The end of 2016 marked major political achievements in Lebanon. This made key investors in the country turn their attention to the real estate market, which is a core sector in the Lebanese economy contributing at least 20 percent of the GDP (2013). With two political milestones, the election of a new president and the creation of a new cabinet having been achieved, investors in commercial real estate are finally looking forward to the growth of the sector.
The real estate market in Lebanon underwent a drastic decline between 2011 and 2015. According to investment Gurus like Mohamed Hamdoun (CEO of Archistyle & Design); the performance of this market is greatly influenced by the political market. New trends in the political arena will, therefore, usher in renewed hope for investors.
In the past few years, even retain and sub-sectors of the real estate market were hit by a slow growth rate. Sectors such as the office market realized a massive loss. In Beirut for instance, there has been an office vacancy of about 26% in the city. Mohamed Hamdoun says that this type of voice was caused by slow economic growth since many businesses people shy away from making their business permanent because of fear of political upheavals.
In Beirut, there is an oversupply of office buildings. Mohamed Hamdoun says the construction sector continued to develop even when other businesses were being taken hostage by political stagnation. But different commercial real estate properties sell well in different locations in the city. Offices, for instance, are in high demand in Cornicheel Nahr, the Nejmeh Square and Beirut Central District (CBD). This is because these places are seen to have high security and are not marked by poor political and economic conditions in other sectors of the city.
What Does It Take To Succeed In The Commercial Real Estate Market In Lebanon?
For people who are newly entering the commercial real estate business in Lebanon, Mohamed Hamdoun recommends strategizing the appropriate locations to invest in. There is a high concentration of businesses in Beirut and newer businesses are started each day. This makes it easy for even beginners in the construction industry to make profits with their first projects. But Mohamed Hamdoun insists that location is a key factor in determining the growth of businesses in this sector. Places like Charles Malek, Hamra and Verdun attract high numbers of businesses.
In order to sell well, the business guru also recommends that you add unique amenities to real estate properties like offices. Offering amenities such as a chilled water system, underground parking, and a high-quality HVAC system can be an attraction to potential buyers. As a developer, differentiating your product by offering extra-value services can help attract demand and put you above competition especially in the highly flooded office business.
It is also good to ensure that your buildings adhere to the development rules and regulations of the country. Buyers in the commercial real estate market are smart people and with the unpredictability of the political and economic industry, no one wants to get in trouble with authorities.