Lebanon Real Estate Newsletter Vol. 3, Issue 2 - February, 2007

BEIRUT: Lebanon's Hayek Group has co-founded a $45-million fund in Kuwait to finance the purchase of apartments in Lebanon by residents of Kuwait. The money was put up by Kuwait's Investors Group (IG), which also has agreements with Hayek Group to open an Islamic bank and build several projects in Lebanon, said the group's chairman, Abdullah Hayek.

Hayek has targeted about 5,000 apartments throughout the country, and has plans to acquire land in Metn this month to build residential units to market through the fund. Apartments financed through the fund should cost between $100,000 and $200,000.

The fund will seek out potential buyers among Kuwait residents - starting with the estimated 60,000 Lebanese expatriates living there - with "middle-class" incomes, said Joseph Safar, operations manager for Hayek Group. Kuwait is home to about 50,000 people who fit the fund's target market, while all marketing will be handled in Kuwait by ASAS International Real-Estate Developments, managed by Lebanese expatriate Michel Dib.

To build the apartments in the Metn, Hayek should close a deal in February to purchase 400,000 square meters of land, Hayek said.

Should demand snap up the initial $45 million, there are plans to launch an IPO in Kuwait for another $30 million, although IG subsidiary Ajal Holding is reportedly willing to invest up to $1.5 billion to finance home purchases.

Hayek Group and IG hope to run their joint venture from a planned 15-storey, $130-million tower in Solidere, though Hayek is still negotiating with Solidere to purchase the roughly 7,500-square-meter parcel of land in Beirut B.C.D, Hayek said.

The ongoing real-estate projects - Hayek's and others' - should be a wake-up call for politicians to end their squabbling and get out of the way to let the country's economic potential boom, Hayek said.

"We would like to send a message to the Lebanese politicians that Lebanon is still the pearl of the Middle East," Hayek said. "We would like to ask them to put their disputes aside and consider the value of a peaceful atmosphere for investors. Lebanese expatriates are turning deserts into paradise while the Lebanese are turning their paradise into a desert."