Deyaar Development is aiming to build low-cost homes near Beirut with Lebanon's largest developer.
Deyaar will submit a proposal to Solidere, its partner in Lebanon, CEO Markus Giebel said. Solidere, controlled by Lebanon's Hariri family and the prime minister-designate, worked with Deyaar on a luxury homes project this year.
"Beirut is tremendously expensive," said Giebel, 40. "If you build low-cost housing that's close to the city, you could end up with solid returns over the long term and a new development model."
In July, Deyaar completed its first development in Lebanon, a dhs365 million ($100 million) project known as Saifi Village II. All 72 apartments and penthouses have been sold, Giebel said.
Buyers of low-cost houses and apartments default at a rate of less than two per cent, Giebel said, making the projects attractive to developers.
"These people are a very interesting target from a social and economic, as well as an ethical point of view," he said.
If Deyaar and Solidere agree to cooperate on the project, they will ask the Lebanese government to provide the land and will agree with banks to provide low-income buyers with mortgages. Saad Hariri became Lebanon's prime minister-designate after his pro-Western coalition won elections in June.
"Our margin expectations must be lower," Giebel said. "We don't want to get rich on the back of the poor, but it must be a margin that a developer like Deyaar is comfortable with."
Giebel didn't say how big the development will be or how much it will cost.
Solidere is rebuilding parts of central Beirut that were destroyed during the 1975 to1990 civil war. The company has projects across the Middle East, Mediterranean countries and North Africa.
© 7Days 2009
