Sponsored by
Where real estate is on the up and up
While many parts of the world are suffering a property slump, designers and developers in Lebanon have their heads in the Clouds.
In good times and bad times, through wars and bombardments, the Lebanese have found reassurance in one thing: The value of real estate has never dropped.
While property prices elsewhere in the world may be sinking and project developments stalling, the value of business locations and residential homes in Lebanon remains firm, and project development continues apace.
This is reflected in a $1.2 billion joint venture signed recently to develop a high profile, multifaceted high-rise project in downtown Beirut. Called Beirut Gate, it will overlook the Mediterranean and the famous Martyrs' Square, the symbolic heart of the city.
In another prestigious project called Clouds, 17 luxurious residential villas have been built in the heart of Faqra, a plush upmarket ski resort, situated high up in the mountains 30 miles from the capital.
"I believe the real estate sector in Lebanon will keep its robustness for at least the next five years," says Chahe Yerevanian, the chairman and general manager of Sayfco, a leading property development company responsible for the Beirut Gate and Clouds projects.
"I believe the real estate sector in Lebanon will keep its robustness for at least the next five years."
Chahe Yerevanian, Sayfco
Yerevanian's father created Sayfco in the 1960s. After his father's death in 2000, Yerevanian restructured the company while maintaining its traditional roots. Sayfco has now handled projects worth more than $1 billion.
Since completing Clouds, the company has launched a 200-unit gated-village development and this year is planning another mountain resort project that will feature 500 villas, a country club and a boutique hotel.
Masters of management
Having turned Beirut's seaport into a superefficient container terminal, IPM is spreading its expertise to new shores.
Within nine months of taking control of the Beirut Container Terminal at Lebanon's major seaport, International Port Management (IPM) had recruited and trained a workforce consisting entirely of Lebanese men and women and reduced the number of expatriates working in the terminal to about 15.
That was four years go. "Now we are the only port in the region that has 100% local employment," says Ammar Kanaan, chairman and general manager of IPM.
Today, the container port handles 1 million units, up from 300,000 three years ago, and employs more than 600 people who are specialists in port operations. By using subcontractors and service companies, the port has increased the volume of container traffic in Beirut, creating more than 3,000 jobs in the local economy.
"Most members of our staff are below 27 years of age," says Kanaan. "They are young and ambitious and are doing a very good job. They are proud of this terminal and what has been achieved. They have invested in it and seen it grow from nothing, and this has had a direct effect on productivity."
Two of the world's largest container shipping companies chose Beirut as a transshipment hub for the region, even though it add a day's journey to the direct route through the Mediterranean from Gibraltar to the Suez Canal.
"If you look at the geographic location of Lebanon, it may not seem to make sense to use Beirut as a transshipment hub because the deviation off the main route will cost ships a minimum of $100,000," says Kanaan. The reason shipping lines do so, he explains, is because the efficiency of the port management, the facilities and the quality of the workforce more than make up for the cost of the additional sailing time.
To maintain this high standard, IPM invests substantially in its research and development arm, which often works in cooperation with the American University of Beirut on issues ranging from technological proficiencies to maximizing worker output.
"In terms of productivity, we are one of the best container ports in the region," says Kanaan.
The company is now expanding internationally. "We have signed an agreement to undertake a long-term project in Turkey," he says. "We have started work in Lithuania, and we have done subcontracting work in Trinidad, Malta, Ukraine and Kuwait. Currently, we are undertaking a number of ambitious projects [in countries] around the globe, including Argentina."
"It is going to be the project of the decade," says Yerevanian. His vision is to extend the company's range and take it to a corporate governance level.
Another successful family-run contracting company is Matta, which operates in the field of building construction and public works. Ranked as one of the top four consultancies in Lebanon, Matta has just signed a $9 million contract to construct and maintain a cable factory. Matta is now active in Dubai and Turkmenistan and has worked on projects in Qatar.
Photo Credits: © Cephas Picture Library / Alamy
Created in 1944, the company it is now run by Jacques Matta, whose son Fadi is the administrative and financial manager. "For us, the market with the greatest potential is Syria," says Fadi Matta. "It is only 60 miles away and there is so much work to be done there. Jordan also has potential."
Matta's optimistic outlook is shared by Khatib & Alami, an architectural and engineering consultancy ranked among the top 100 international design firms.
However, Dr. Najib Khatib, the director general and partner, who is the son of one of the founding members of the firm, believes Lebanon will become increasingly important for the partnership, along with Saudi Arabia, Kuwait and Qatar.
"The firm has been growing substantially in the last five years and is looking at acquisitions in an active manner," says Dr. Khatib.
Among Lebanon's visual delights are the remnants of its architectural heritage. Greenstone, a division of Johnny R. Saade Holdings, is in the process of returning to its former glory a 100-year-old, six-story building located in the Achrafieh district of the capital.
Johnny Saade, chairman, says the integrated project, scheduled for completion in 2011, has been named L'Armonial to reflect the notions of art and harmony that it will embody.
Photo Credits: © Cephas Picture Library / Alamy
A taste of success
Lebanon's wine industry may be small, but it is achieving global recognition.
The wine industry is flourishing in Lebanon. Although Lebanon doesn't produce a lot of wine, international connoisseurs hold the region's best in high regard, and its rarity adds to its appeal.
Annual production amounts to about 5 million bottles, equivalent to the yield of perhaps one French vineyard. Consistency, however, is a particular quality of Lebanese wine.Most of the vineyards and wineries are situated in the Bekaa Valley, a fertile valley running 75 miles through mountains at an average height of 3,000 feet (914m) above sea level, where, with reassuring regularity, the grapes receive an abundance of sunshine in the summer and rain in the winter.
Today, two of the largest and most successful wineries are Château Ksara and Château Kefraya, both in the Bekaa Valley. Château Ksara is the oldest, dating back to 1857. Under its forward-thinking chairman, Zafer Chaoui, the winery has developed an outstanding international reputation.
"The weather conditions here give our wines an aroma and complexity that do not exist in many places," says Chaoui, adding that the vineyard has made substantial investments in equipment and human resources.
Château Ksara grows its grapes without the use of pesticides or herbicides and harvests them by hand. The wines are aged in underground limestone galleries, where the temperature is consistently 52 to 55 degrees Fahrenheit (11 to 13 degrees Celsius), providing ideal conditions for bringing them to the peak of perfection.
Château Kefraya began producing wine after Michel de Bustros, the founder, chairman and chief executive, initiated construction of the winery in 1951.
It continued to grow vines and produce wine despite being under siege and bombardment throughout the civil war that occurred between 1975 and 1990. De Bustros had to accompany the wine containers by boat from the south of the country to Beirut, a 24-hour journey, because the roads were impassable.
Photo Credits: © Expuesto - Nicolas Randall / Alamy
One of Kefraya's most celebrated blends is Comte de M, 1996, which leading wine critic Robert Parker awarded 91 points out of 100, describing it as an amazing accomplishment.
Today, the Kefraya vineyards stretch across 740 acres, and its wines are sold in more than 35 countries. "Every year new markets are conquered," says de Bustros. "Last year, our wines reached Mexico and Venezuela."
Emile Majdalani, Château Kefraya's commercial director, says: "Allowing the noblest produce of our territory to travel and be known to the world is the most satisfying aspect of our work."
Both Château Ksara and Château Kefraya produce more than 2 million bottles of wine each annually and are seeking to boost sales abroad.
Earning high marks
With 41 universities, innovative programs and high standards, Lebanon has one of the best educational systems in the region.
The Suliman S. Olayan School of Business's move into its new premises this year has brought the high profile of university-level business education in Lebanon into sharp focus.
The American University of Beirut (AUB) separated business studies from arts and sciences to create the Olayan School of Business as its sixth independent faculty in 2003. It was able to do so and to build the new facility as the result of a substantial gift from the family of Suliman S. Olayan, the founder and chairman of the Olayan Group. It is a fitting tribute that the school bears his name.
Olayan, a Saudi billionaire, turned his small trucking company into a diversified, multinational distribution, manufacturing and investment business.
George Najjar, a professor and the dean of the business school, has created three innovative business programs — MM&E (management, marketing and entrepreneurship), FAME (finance, accounting and managerial economics) and BIDS (business information and decision systems). Departments work in clusters to enable the sharing of expertise.
"Within these tracks there is a high level of cooperation," says Najjar. "Currently, we have 52 faculty members, up from just ten a few years ago, representing a 500% growth."
The business school has also completely revamped its undergraduate curriculum and M.B.A. degree program to bring them up to the highest standards.
The AUB, the most prestigious educational institution in the Arab world, was founded as a private, nondenominational university in 1866. Its current president, Dr. Peter Dorman, a distinguished American professor of Egyptology, is the great-great-grandson of its founder, Daniel Bliss.
The AUB first introduced business education in 1900, and over the next 100 years its graduates included many business and political leaders, such as Lebanon's Prime Minister Fouad Siniora and several of his predecessors.
Bahia Hariri, the minister of education and a sister of the late prime minister, Rafik Hariri, emphasizes the importance attached to schooling in Lebanon and the links between education and the economy.
When she was appointed, she held an unprecedented meeting with 15 former education ministers to devise her goals and strategies, which included drafting a new curriculum and launching teacher-training workshops.
With 125,000 students enrolled in its 41 universities and more than 2,100 Lebanese students studying in the U.S., the country can lay claim to having one of the best educational systems in the Middle East. It introduced free primary education in 1960, but about two-thirds of all students attend private schools.
Photo Credits: © Benoit Tessier / Reuters
A cut above
Despite the economic downturn, when it comes to business enterprise, optimism, flair and fortitude are the fashion in Lebanon.
As Angelina Jolie glided along the red carpet at the Oscars and Whitney Houston made an appearance at the Grammy Awards this year, both owed more than a little of the impact they made to Lebanese dress designers.
Photo Credits: © Jamal Saidi / Reuters
Jolie was wearing a black strapless gown by Elie Saab and Houston a soft aquatic colored dress by Zuhair Murad. Both of these Lebanon-born designers have taken international haute couture by storm.
Their success is an example of the Lebanese people's irrepressible entrepreneurial spirit and confident optimism, which extends through a range of business sectors, undimmed by either domestic setbacks or the global downturn.
When asked how he envisions the future, Johnny R. Saade, chairman of Johnny R. Saade Holdings, a disparate group of companies active in wine-making, tourism and real estate, says: "We are expanding in all fields, here and abroad."
Patchi, a Lebanese chocolate maker, sells its handmade luxury confectionery brand in 35 countries. Its chairman and founder, Nizar Choucair, is equally bullish about the future. "We are opening very soon in Azerbaijan and negotiating with South Africa," he says.
Raymond Abou Adal, the chairman of Holdal, a company with 60 years of experience in distributing hundreds of highquality international brands, says Lebanon's strength lies in the mentality of its people: "They have a willingness to live. Each day for them is a marvelous day. We are not a depressed people. We are really optimistic."