This week, a Middle Eastern developer and the ex-wife of an American property billionaire were all set to launch a landmark project in the war-ravaged Levant.
But, as the Lebanon falls apart and foreign nationals, such as Cushman & Wakefield affiliate Michael Dunn, leave the country, the scheme is likely to be another casualty of war.
La Residence had the hallmarks of a good investment: a $150m luxury development by the marina and waterfront in a prestigious district, in the centre of the city, starting at £229,000 for a one-bedroom 125m2 flat.
The 35-storey (377ft) skyscraper was being developed by Dubai-based Damac Properties. Ivana Trump, the former wife of Donald Trump, was to style the interiors. Scheduled for completion in 2010, La Residence by Ivana Trump would have offered luxury resort facilities in an exotic location.
The only problem was that the location was central Beirut.
Along with the rest of the city, the site has been suffering daily bombardment by Israeli jets, which has killed hundreds of Lebanese, and led to the mass evacuation of most foreign nationals.
On 13 July, in response to Hezbollah rocket attacks on northern Israel and the capture of two Israeli soldiers, Israel bombed Beirut’s airport. Now the army has moved back into southern Lebanon, a territory from which it only withdrew in 1985.
Even before the current conflict, La Residence’s risks were all too evident. The site lies next to two burnt-out skyscrapers riddled with bullet holes from Lebanon’s 15-year civil war. The view from the balcony of one of the flats would take in the street where former Lebanese prime minister Rafik Hariri and 20 others were killed in a car bomb last year.
Damac, however, remains undaunted.
It has rescheduled its planned glitzy London launch for the scheme to “later in 2006”, and is still advertising it as “a celebrity lifestyle project in downtown Beirut” on its website.
It points out that, to date, 40% of the apartments and penthouses have been sold and 30% are reserved. It adds that not one purchaser has asked for their money back, although should any purchasers ask for a refund “in light of the current situation” they would be likely to get it.
The developer is banking on a quick solution. “Construction work is not scheduled to start on site until early 2007, with completion in 2010, by which time the current short-term political issues should be resolved,” says a spokesman for Damac, breezily.
“Once the current political situation has calmed down, the Beirut property market will be ready for high-quality apartments. This economic growth and investment will continue in the long term, regardless of short-term political issues,” he adds.
Trump, who was responsible for the interior design for most of her former husband’s real estate ventures, is equally optimistic.
“The La Residence project is a great investment opportunity,” she says in a statement. “Beirut is a fantastic city in a country with a superb climate, coupled with 5,000 years of history and a very rich culture.”
Neither seems too concerned that investors would be hard pushed to get there even after fighting stops, as Israeli jets have destroyed the airport and the country’s major roads.
The spin coming from Damac and Trump is a long way from the images of the hundreds of civilians killed and of the 600,000 refugees that have dominated the news over the past two weeks.
Michael Dunn, managing director of Michael Dunn & Co, Cushman & Wakefield’s associate office in Beirut, was on holiday in Italy when he first heard the news of the air strikes on the Lebanon.
“We wanted to go back. It is our intention to go back. But at the moment there is no airport and the roads are very dangerous. When the time is right, we’ll go back,” he says.
Meanwhile, Dunn is working from a desk in Cushman & Wakefield’s London office and his staff are “working hard and keeping their heads down” in Beirut and neighbouring Syria.
For those left in the Lebanon, there is very little work. “Construction has stopped, development has stopped — but there’s still management and cleaning to be getting on with,” Dunn adds.
Dunn is reluctant to say how much money his business will have lost as a result of the strikes. “There are deals which we have done or which were about to happen which will be put back for a year or two years. It’s hard to say as we don’t know how long this is going to go on for,” he says.
This was supposed to be the year that Lebanon got back on its feet and attracted overseas investment.
“This year had been the best ever,” says Dunn, pointing out that new shopping centres and homes had been mushrooming across the city. “The residential market in Beirut had gone crazy. There was huge demand and huge inflation. I would guess there were 20-25 resi towers in progress aimed at ex-pat Lebanese and Gulf Arabs.”
In May, The Guardian endorsed the country as “the perfect destination for a family fly-drive holiday”. Grosvenor listed the city in April as a property investment hot spot.
By the start of summer, five luxury residential towers of more than 35 storeys had been built in Beirut, with prices for prime units with waterfront views starting at $4,500 per m2 and penthouses selling for more than $2m. A $70m Hyatt hotel was to open next year. Now, construction sites across the country lie dormant
However, Dunn is optimistic about the future of Beirut. “In the long term, the place is going to do well. It’s a place that booms really quickly.”
