Beirut shops pay 3rd highest rents in Middle East, 37th in world
Rents of space for shops in Beirut are seen as the third highest among 13 Middle East cities and 37th in the world, according to a recent survey conducted by an international firm. According to property consultants Cushman & Wakefield, Beirut is ranked 37th among 63 cities around the world in terms of high retail rents. It added that the Lebanese capital is the most expensive among 10 Arab cities included in the survey.
Beirut was the 30th most expensive city worldwide, the most expensive city in the Middle East & Africa region, and the most expensive Arab city in the 2010 survey. It ranked as the 33rd most expensive city globally and the second most expensive in the Middle East & Africa region in 2009. The study evaluates retail rent prices in 278 locations in 63 countries around the world.
On a global basis, the rent of retail space in Beirut was less costly than in Luxembourg, Bogota and Stockholm and more expensive than in Santiago, Hanoi and Budapest, as reported by Lebanon This Week, the economic publication of the Byblos Bank Group.
The most expensive rental retail location in Beirut was ABC Center in Ashrafieh at 1,379 euros per square meter per year in 2011, or around $2,000 per sqm, which is lower than the global average of 2,582 euros per sqm and higher than the Middle East & Africa average of 914 euros per sqm. According to Cushman & Wakefield, Lebanon was one of two countries in the Middle East & Africa region that posted increases in prime rents in the 12 months to June 2011, as rental values in the top shopping areas of Beirut proved resilient to external turmoil. It said that food retailers remain active and several luxury brands have opened new outlets in Beirut. It added, however, that overall demand has stagnated as retailers are cautious due to the political instability in the country. It noted that although tenants’ positions have strengthened when negotiating new leases, rental levels in prime locations are still being revised upward upon lease renewal.
Lebanon accounted for four of the top 10 most expensive rental locations in the Middle East & Africa region. ABC Center in Ashrafieh ranked as the fourth most expensive location in the region in terms of retail rent prices, followed by Kaslik in seventh place at 1,035 euros per sqm, Verdun Street in eighth place at 966 euros per sqm, the Beirut Central District in 10th place at 897 euros per sqm and Hamra Street in 16th place at 586 euros per sqm.
In parallel, two locations in Lebanon ranked among the seven locations in the Middle East & Africa region that posted rental growth. ABC Center in Ashrafieh posted the fastest growth in the region with a 33.3 percent rise in rent in the 12 months ending June 2011 and Kaslik posted the fifth highest rental growth at 7.1 percent year-on-year; while rents in the Beirut Central District dropped by 13.3 percent and regressed in Hamra Street by 5.6 percent, while they were unchanged in Verdun Street.
The survey also noted that rental values in the Middle East & Africa region did not witness the positive trend seen elsewhere, as prime retail rents either declined or remained stable in most countries during the covered period, with only Lebanon and Israel posting increases.
Retail rents grew by an average of 0.01 percent in the Middle East & Africa year-on-year, as rents increased in seven locations, declined in eight other locations, and were unchanged in 12 locations. New York’s Fifth Avenue is the world’s most expensive retail location at 16,704 euros per sqm a year.