Published on 23 September 2005 at 06:17 pm
Filed under: Middle East:- Lebanon Property Guides » Lebanon: A Guide for Property Investors
Beirut and Tripoli are the main centres of investor focus in the emerging property market of Lebanon and they both offer fantastic commercial and residential opportunities for property buyers interested in attractive rental yields and maximum underlying property price growth potential.
The majority of international real estate investors have yet to examine the opportunities that exist in Lebanon though, they remain unaware of the fundamental stability within the country now and of the government’s active commitment to economic growth through the promotion of foreign investment initiatives which already directly benefit foreign property investors.
Until 1975 Lebanon was known as the Mediterranean Riviera and it attracted hundreds of thousands of visitors annually to its sophisticated and sparkling shores. Furthermore Lebanon attracted record levels of regional growth and investment through commerce and Beirut was the country’s financial and commercial hub. Property in Beirut has always been at a premium and despite the civil war prices for attractive residential units in the city remain on a par with those in many major Western European and American cities.
The violent and bloody civil war that broke out in 1975 and tore the country to pieces until 1991 severed Lebanon’s economic lifeline and threw the country into economic disarray. Since 1991 however, subsequent governments have worked incessantly to rebuild the country physically, economically and politically. Lebanon is now a stable Middle Eastern land with a strengthening economy attracting steady inward foreign investment.
While there remain political tensions and security issues in certain parts of Lebanon the majority of the country is committed to rebuilding economically, 2004 saw GDP grow by an impressive 4%. Nowhere else in the Middle East is a government so committed to re-inflating its country’s economy than in Lebanon, and it is this commitment that is fuelling the growing investment property market.
Property prices in the country’s capital city are already high - historically Beirut was one of the most attractive Middle Eastern cities in which to own a second home or an investment property - and currently as worldwide commercial enterprises establish and re-establish regional headquarters in Beirut so the demand for quality residential and commercial units continues to climb and prices are rising in line with demand.
Companies like Virgin and Ericsson have already made a substantial commitment to Lebanon, attracted by an educated and dynamic local workforce and low corporate tax rates designed to bring in more overseas companies - these international companies are demanding Class A commercial property to lease or buy and their international and local employee bases are demanding Class A residential property to rent and purchase.
To reiterate, the main driver of property price growth and rental yield increases in Beirut and now Tripoli is the Lebanese government’s absolute commitment to economic growth through the promotion of the country and the development of significant initiatives to attract sustained and sustainable foreign direct investment into Lebanon. Further proof if it were needed of the government’s commitment comes in the form of their issuance of Eurobonds to stabilise the economy and their entering into a phase of voluntary austerity to reduce expenditure and increase revenue collection.
Investors attracted to the Middle Eastern region have total confidence in Lebanon and are establishing long term and permanent bases in the country - this is forcing commercial and residential property prices to go up, it is increasing the demand for property and it is encouraging overseas corporate real estate investors to begin housing and retail developments in Lebanon.
The local Lebanese workforce are young, well educated and highly employable and they are being fiscally rewarded for their personal efforts to rebuild the economy of Lebanon with rising wages and increased purchasing and borrowing power. These people offer the fundamental basis on which a smaller property investor can buy into the residential market in Lebanon right now with confidence. Currently these are the people who will pay the rental prices being asked and in the future these are the people who will be economically wealthy enough to purchase the properties when they are resold by the investors.
In terms of the opportunities available in Lebanon right now they are mainly centred in the commercial hubs of Beirut and Tripoli. As stated however, countrywide Lebanon is growing and strengthening and more opportunities are being created annually. The Lebanese government and people’s commitment to rebuilding their once hugely successful country is unwavering and has created an environment of positive and exciting potential. This potential is being realised by foreign investors entering many market sectors including banking, telecommunications and now property.
Middle East:- Lebanon Property Reports
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