Lebanon’s Solidere to Spend as Much as $200 Million on Projects

Solidere (SOLA), Lebanon’s largest property developer, expects to spend as much as $200 million on real estate projects in the country this year even as civil war in neighboring Syria threatens to slow building works.

“There is a high probability we might slow down projects if things worsened politically,” said Mounir Douaidy, general manager of Solidere SAL, the country’s biggest publicly traded company. Spending this year will be at least $150 million, he said.

Solidere, set up to rebuild parts of central Beirut destroyed in the 15-year civil war that ended in 1990, will complete a cinema and an entertainment complex in the capital this year and may spend as much as $80 million building a retail project as part of the Souks of Beirut, he said. The company holds 39 percent of Solidere International, which plans to build projects in Saudi Arabia and the United Arab Emirates.

The conflict in Syria is hurting demand for properties in Lebanon, prompting Solidere to postpone new projects including an office block, Douaidy said. The developer plans to fund ongoing work from its own revenue without raising money, he said. The company has $730 million in cash and receivables and annual recurring revenue of about $50 million, he added.

Two to three residential projects are planned next year on plots sold by the company, Douaidy said.

Solidere International has revived a stalled development in Ajman, one of the seven sheikhdoms making up the United Arab Emirates, and is expanding into Saudi Arabia, Douaidy said.

The Al-Zorah project in Ajman has been reduced to about 40 percent of its original size and will be solely a resort instead of the original plan to include homes and offices, he said. Al- Zorah was planned on 12 square kilometers (4.63 square miles) and was expected to cost $60 billion, Douaidy said.

The company started building a residential tower in Jeddah and will develop a housing compound in Saudi Arabia.

“Saudi Arabia is a very good market and there is demand,” Douaidy said. “The laws are being adapted and there are prospects for real estate development there.”

Solidere has fallen 10.7 percent on the Beirut stock exchange in the last 12 months. The country’s benchmark BLOM Stock Index is little changed over that period.

To contact the reporter on this story: Zainab Fattah in Dubai at zfattah@bloomberg.net

To contact the editor responsible for this story: Andrew Blackman at ablackman@bloomberg.net

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