BEIRUT: The real estate giant Solidere made a comeback to profitability after selling close to $500 million in properties over the past two years, allowing it to settle all its debts, the company's vice president Ghazi Youssef said Friday.
“We did relatively well despite the crisis that engulfed Lebanon. We sold around $450 million to $500 million worth of land in the Downtown district in the past two years. We had debts of around $600 million in the past and now I can say we are no longer in the red,” Youssef told The Daily Star over the telephone.
Youssef expressed his belief that many Lebanese have chosen to invest their money in real estate. “There is around $5 billion in cash in the market and it seems some [people] have preferred to buy land in Solidere because they think it’s a sound investment,” he added.
Solidere has been struggling with the acute political and financial crisis that struck Lebanon in recent years. The company implemented a restructuring plan to cut costs last year.
However, rigid capitals control imposed by the banks since late last year, coupled with the sharp devaluation of the Lebanese pound, drove many investors and bank customers to search for a safer investment, especially since most of them could not transfer money abroad or carry out financial transactions with other countries.
One way to unlock the dollar liquidity in Lebanese banks was to buy properties, cars or expensive watches through the issuance of bankers checks.
One source told The Daily Star that the company had been accepting bankers' checks from clients.
“Banks won’t allow their customers to withdraw dollar banknotes from their accounts or transfer them abroad. But they do accept issuing bankers checks inside Lebanon to buy properties or goods, for example. As long as the dollar stays in Lebanon, the banks won’t mind issuing these checks,” the source said.
There are no official figures yet on the volume of land and apartments sales in Lebanon since Oct. 17, 2019, but experts believe the amount of these investments are quite substantial.
Solidere shares on the Beirut Stock Exchange have also jumped significantly since a wave of popular protests erupted on Oct. 17, 2019, reaching a top ceiling of $12 but eventually falling to $9.58 for A shares and $9.51 for B shares Thursday. Solidere shares before the protests, were trading at an average of $5.
Youssef said those who bought land from Solidere were a mix of Lebanese and foreigners.
“We are only selling land because all apartments were sold in the past. But we are still unable to collect rent from shops and restaurants due to the economic crisis in Lebanon,” he added.