Beirut has the most expensive retail rents in the Middle East

(The Daily Star, September 27, 2010)

Beirut has the most expensive retail rents in the Middle East, according to a study by property consultants Cushman and Wakefield.

The survey of 59 countries ranks Beirut as the 30th most expensive city in the world. The city is the most expensive of 10 Arab countries, as well as 12 countries in the Middle East and Africa region, according to the report published in Lebanon This Week, the economic publication of the Byblos Bank Group.

The city has moved up in ranking since 2009, when it was the 33rd most expensive city worldwide, the second most expensive city in the Middle East and Africa region, and the most expensive Arab city. In 2008, it ranked as the 43rd most expensive city globally and the third most expensive in the Middle East and Africa.

The study evaluates retail rent prices in 269 streets around the world. The rent of retail space in Beirut was less costly than in Brussels, Oslo and Prague and more expensive than in Stockholm, Helsinki, and Luxembourg.

The most expensive rental retail location in Beirut was the Beirut Central District at 1,470 euros ($1983.18) per square meter (sqm) in 2010, lower than the global average of 1,808 euros ($2,438.45) per sqm and higher than the Middle East and Africa average of 779 euros ($1,050.64) per sqm.

According to Cushman & Wakefield, Beirut’s retail market performed strongly in all of its established shopping areas in the 12 months to June 2010. The report said the Souks shopping center in the Beirut Central District has been the only new addition to the market in the period.

It added that rental levels are being supported by the lack of other new additions to the market and by improvements to existing facilities. The report said  prime locations remain the ABC Center in Achrafieh, Verdun Street and Kaslik Street, all of which are showing rental values of around 1,100 euros per sqm, or $1,400 per sqm, per year.

Lebanon accounted for four of the top 10 rental locations in the Middle East and Africa, with the Beirut Central District ranking first place in the region and among 16 Arab locations included in the survey. It was followed in third place by the ABC Center in Achrafieh at 1,225 euros per sqm ($1,500 per sqm), Verdun Street in fourth place at 1,061 euros per sqm ($1,300 per sqm), and Kaslik Street in seventh place at 1,017 euros per sqm ($1,240 per sqm).

In parallel, two locations in Lebanon ranked among the four locations in the region that posted rental growth. Kaslik Street posted the third fastest growth in the region with an 8.3 percent rise in rent in the 12 months ending June 2010 and the ABC Center in Achrafieh posted the fourth highest rental growth at 7.1 percent; while rents in the Beirut Central District, Hamra Street and Verdun Street were unchanged year-on-year.

The survey noted that the Middle East and Africa region has not been immune from the global slowdown, as retail rents in several countries declined during the covered period, while other markets were either stable or recorded modest growth.

Retail rents grew by an average of 0.3 percent in the Middle East and Africa year-on-year, as rents increased in four locations, declined in four other locations, and were unchanged in 15 locations. Rent at Cairo’s City Stars posted a 33.3 percent rise annually, the fastest growth rate in the region. New York’s Fifth Avenue is the world’s most expensive retail location at 16,257 euros per sqm a year.