Arab land purchases up 127 percent in Lebanon
Kuwaitis most active buyers in 2003
By Tarek El Zein -Daily Star staff
Tuesday, July 27, 2004
BEIRUT: Arab investors purchased 841,506 square meters of land in Lebanon in 2003 - a 127 percent increase compared to 2002 and the largest amount sold in a single year in the country's history.
According to Ramco real estate advisors, almost 800,000 square meters of the land purchased in 2003 was acquired by Arabs in 56 major deals. "While Kuwaitis were known to be the most active buyers, it was the UAE investors who have recently been making the news with large deals in Beirut and Mount Lebanon. Nine out of the 20 largest land deals made in the last 32 months were made by UAE investors, compared with four concluded by Kuwaitis, four by Saudis and one each by Qatari and Syrian investors," said Ramco in its latest report.
However, the growth in land purchase witnessed last year has significantly slowed down in the first quarter of 2004 with only 112,000 square meters registered sold in that period.
"Our interpretation is that after having bought large chunks of land for developments, most Arab developments groups or investors are now taking time to digest the first flurry of buying," said Ramco.
The slowdown was also confirmed by statistics published by the real estate directorate of the Finance Ministry, according to which only six properties were bought by Arabs during the first quarter of 2004, compared with 9,635 properties purchased by Lebanese.
"The sharp fall of 2004 may be the result of technical factors, such as delay in official registration, but it is nevertheless consistent with Ramco's data showing a marked sluggishness in Arab buying of individual properties," Ramco said.
Between August 2001 and March 2004, Arab investors bought more than 2.03 million square meters of land in 109 large deals. The average size of land deal was around 18,664 square meters per purchase, but the dimensions vary from one year to another. For example, one single deal of 368,723 square meters concluded in 2001 by a Kuwaiti group raised the average deal size to more than 60,000 square meters per purchase for that year.
Ramco said Saudi investors have substantially increased their land buying activity in Lebanon. After buying only 24,000 square meters in the first half of 2001, their investments rose to over 88,000 square meters in the first three months of 2004 - representing 72 percent of all foreign buying activity. "Saudi purchases are however mostly done for residential purposes by wealthy people and dignitaries, while UAE investments are mainly directed to large residential and retail developments," said Ramco, which also noted that "Kuwaitis are perhaps the most adventurous with a voracious appetite for large (blocks of land)."
According to the research conducted by Ramco, Arab buyers are purchasing mainly on Mount Lebanon. Yet, they like to stay in proximity to Beirut and especially to its city center and this is why 84 percent of disclosed land deals targeted the three most popular regions of the mountain: Aley, Metn and Baabda.