Office rents rise 13 percent in 2011

Retail space in Beirut malls sees high
occupancy rates reaching 95 percent

Beirut was one of the few cities in the Middle East to see a rise in office rent in 2011 of 13 percent, according to ‘The Lebanese Real Estate Sector’ – Update’ report issued by Credit Libanais research unit.

The report said that dynamics governing the office market in the country vary from those that control the residential market. This was seen in 2011 when office rental prices mushroomed while residential realty prices stagnated.

Beirut registered the third highest growth rate in the Europe, Middle East and Africa (EMEA) region. The city ranked 22nd among the most expensive office markets worldwide, with an annual occupancy cost of €492 ($605) per meter square in a year in 2012.

According to Cushman & Wakefield, a commercial real estate services firm, the “scarcity of high quality space” in Beirut triggered an increase in office rental prices during 2011, a trend which is anticipated to continue throughout year 2012.

Office rental costs have been on the rise in the Beirut area owing to a lack in the supply of premium office space, a factor which mitigates any decrease in demand that may result from political deadlock.

Annual office rental cost in the Beirut area increased form $420 per square meter in 2008 to $600 per square meter this year, at a CAGR of 9.5 percent.

According to RAMCO real estate advisors and consultants, Beirut malls enjoy a high average occupancy rate at between 85 and 95 percent, with average annual rent for retail shops between $1,000 and $1,500 per square meter per year.

Reported by Hani Bathiche