Joueidi Development, a new development arm has joined the Joueidi Group, promising to carry exceptional contribution to the real estate market in Lebanon, by creating "products that the market doesn't have", as Mr. Riad Joueidi, Managing Director of the BIEL Group, declares to EKARUNA.
Joueidi Development comes to crown a long history of experience and know-how in the field of project development and to reflect a growing understanding and acknowledgement, in the Lebanese real estate market, for the necessity to perform within advanced and dedicated legal frameworks.
EKARUNA met Riad Joueidi to explore Joueidi Development's vision for the Lebanese real estate market and the projects it is about to launch as well.
Three "mini-master-plans" in the loop...
"Hazmieh Village" in Hazmieh (project still under study), "Round 55" in Mdawwar and "Rmeil Residential Building" in Mar Mkhayel are the three landmark developments about to see the light by Joueidi Developments.
Riad Joueidi explains with considerable pride and enthusiasm the idea behind these projects: "What we're doing is basically not just placing a building on a piece of land. We're actually creating communities by introducing a well-studied mix of commercial, retail, residential and entertainment spaces."
"Add to that our advanced know-how and experience, the quality of products and service we care to provide and the deep understanding for the evolution of the market's real demand, all these allow our products to be different and stand out to meet the customers' taste" he adds.
As for future projects, "decision would be made opportunity by opportunity" Joueidi says.
Partnership with land owners
This trend is growing apparently in the Lebanese real estate sector. "It combines land ownership, which is becoming too costly, with the developers' know-how, to create a much higher return for both parties. And this trend is becoming more possible today with the relative stabilization of land prices. This used to make any deal with a land owner earlier very much more difficult because it was hard to define the financial value of his contribution in the project" explained Joueidi.
Demand trends: Smaller sizes, better space management and functionality and further distance from the capital's heart.
According to Joueidi, demand is shifting further towards relatively smaller units, for the simple reason that the "big size" market is saturated. Joueidi believes "it's becoming difficult to sell properties larger than 250 or 280 square meters in Beirut. That's not where the market is going. The majority of buyers who can afford such properties have already bought theirs and the speculators market is not that considerable in this niche. Besides, developers are becoming more aware of the means to create more efficient space management and better functionality of facilities. And finally, financially speaking, smaller units eventually provide higher yield than larger units within the same amount of square meters available on a flat, despite the additional cost of partitions and multiplicity of some basic elements like bathrooms, kitchens and so on. But still, for a developer, selling 10 properties in a project is easier than selling 20, theoretically speaking".
Developments are also following the demand towards further suburbs of Greater Beirut, and even into areas outside Beirut, as Joueidi says. "For an equivalent budget, you'll have to get smaller areas the more you get close to the heart of Beirut, and that's why the market is shifting towards other areas. We were among the very first for example to build in the Mar Mkhayel area, offering units of around 160 square meters with much more affordable prices and still within a very nice environment in the capital" he adds.
Joueidi yet acknowledges that this shift is also leading to an increase of prices outside Beirut as well, while leaving a narrow margin of difference for very high-end luxury apartments in Beirut, as the latter are suffering from a shrink in demand.
This price correction phenomenon doesn't however reflect any upcoming drop in the market's average prices according to Joueidi.
Financial facilities: opportunities and threats
As Joueidi explains, demand for real estate is continuously available in Lebanon and similarly to the situation of Lebanese banks currently, good developers are having a surplus of investors. "Basically the Lebanese real estate market is very much motivated by the banking sector, providing further easier financial facilities to buyers. Earlier in time or in other terms before Lebanese banks get faced with the surplus of liquidity, they were very much conservative towards financing the real estate market. This means that if Lebanese banks, for some reason, stop financing real estate operations, this would highly affect the sector indeed" he adds.
© Ekaruna 2010
