The First Modern Lofts Project in Beirut, Lebanon – by Capstone

Interview with Ziad R. Maalouf, CEO of Capstone Investment Group

Let’s discuss the local investment climate in Lebanon. What would be your assessment of the current situation?

The local investment climate in Lebanon is difficult. What is happening is that we live in an island in the middle of political instability in the region. Although it is true that in Lebanon we have benefited from a certain type of stability, meaning that we don’t have war going on as in Syria or in Iraq for example. However it has affected investor confidence and so the climate has been affected negatively. People have refrained from spending and from investing in new projects or buying new apartments.

In our last interview you mentioned that your main focus is on the multi-use, high-end real estate developments specifically in Beirut. At the time you were running three projects. Could you give us an overview of the major developments since then?

Since then we have started a new project despite the political instability and the state of the real estate sector. We were encouraged by an area in Beirut called Mar Mikhael, where we have acquired an old brewery, the former Laziza Brewery. We are turning it into lofts with the renowned architect Bernard Khoury. This is a new project that we are launching in addition to the other projects that we are currently developing, consisting of a high-end tower in Trabaud and another in Sursock which is a distinguished neighbourhood in Beirut and a nice building in Abdel Wahab. So now we have a total of four projects.

This is the first project of its kind in Lebanon and maybe even in the Middle East where we are doing a conversion of a brewery into lofts.

How are these projects progressing?

Our projects are progressing well. We will deliver two completed projects in less than 6 months. Sursock is also progressing well; we have been delayed for a few months by the discovery of certain archaeological ruins on site. The discoveries were found not to be of great value so the archaeological findings are being removed by the Directorate of Archaeology and the project is proceeding as planned.

What is so specific about your projects and the company itself? How do you distinguish yourselves from the other countless real estate developers here in Lebanon?

Our strengths are known. First of all we are good at finding good locations. We focus on some of the best locations in Beirut and in Achrafieh. It is also the design of our buildings and the promise we keep from the beginning until the end when it comes to quality because as you know most people in Lebanon buy off-plans so they buy presales before the project is launched. Here there must be a lot of credibility in the developer; what you promise in the beginning must be what you deliver in the end. What distinguishes us is that we keep our promise.

Could you tell us some examples of past projects that are milestones or other examples of your success?

The buildings that we will be delivering in less than 6 months is the proof of our promise. If you talk to all of the clients who have bought from us and are about to receive their apartments very soon, they will all tell you the same thing. These are the buildings we have promised and they are being delivered as promised. That is what we can boast about.
We are about to deliver Trabaud 1804 and L’Heritage de Abdel Wahab.

What is the portfolio of your clients? Who are you targeting?

Following the events of 2008 and the financial crash globally, demand for real estate in Lebanon has only been from Lebanese here or Lebanese expatriates. People from the Gulf and especially from Saudi Arabia and Kuwait have lost interest in this market for various reasons, for political reasons and for financial reasons. Our portfolio is targeted at the Lebanese and the Lebanese expatriates who constitute 100% of our sales. The Lebanese expatriates have better purchasing power because they earn their money elsewhere and we rely on that kind of client.

With regards to the location, you mentioned you are primarily in Achrafieh, are you also looking into other areas?

We are specialised in Achrafieh, we know it very well, we know the streets and what makes it what it is today. We would consider going elsewhere in Beirut but our focus will always remain primarily in Achrafieh.

Could you tell us more about the old brewery project in Mar Mikhael?

The project is a conversion of an old beer brewery into modern lofts. This is the first project of its kind in Lebanon and maybe even in the Middle East where we are doing a conversion of a brewery into lofts. We couldn’t have done this project without the help and assistance of Bernard Khoury the architect who is very well known in Lebanon and in the world, specifically for this kind of project. What we want to do is to preserve the spirit of Mar Mikhael while adding a touch of modernity. We also want to present a product that is composed of lofts where you have very high ceilings, face space, exposed ducts and walls etc. to give the true loft feeling that we are bringing to Lebanon as opposed to the lofts that have been promoted in Lebanon by other developers and which are not truly lofts.

At which phase is the project at the moment? When do you envision the completion?

The project is in the design phase. It is still in the early stages but the project will take between three and four years. We will be launching the project in the next three months.

Is there a project for which you are in the sales phase now?

All of our projects are actually being sold as we speak. We are delivering two projects very soon. We still have a couple of apartments to sell in these projects. Sales are ongoing.

What is your vision for Capstone Investment Group for the next two years?

If you give us stability and a normal environment where we can operate, we would like to bring specialised projects and something different to the market. Now that we understand the markets more, we understand what people want more in terms of design, architecture specifications and layout. We want to continue to bring different projects with a twist to the market.

What about the number of projects you would like to have? Do you want to create more projects or just to consolidate?

It is not about ego or about numbers or the tallest building in Lebanon or the Middle East. It is about the right projects that make sense financially, ecologically and architecturally.

Do you have a message for investors regarding joint ventures with you?

We have a very good relationship with all of our investors. They are all happy and satisfied with our work. We hope to continue this relationship with them and with new investors also.

Lebanon is a small country and real estate is scarce. It is the dream of every Lebanese person to own a house or apartment in their country. Today is the best time to buy because it is a market where demand is low but there are good opportunities. It is now the time to buy because when the market recovers and booms those opportunities might not be there. Now is the right time to buy for our expatriates.