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July - September 2008
soliderequarterly
business & financial news
Chairman’s message
Annual general meeting
The year 2007 was a turning point in the life of the Company. We had to tackle
abroad a number of projects, some larger than Solidere.
Held on July 07, 2008, Solidere’s annual general
meeting, presided over by chairman Nasser
Chammaa and attended by the board of directors:
shareholders’ register at the general meeting
date, with distribution to take effect as
of August 29, 2008.
• Approved the audited financial statements for the
year 2007; taking note of accumulated profits and
of the US$155,897,109 net income of the year,
resolved to transfer 10% of net income to
retained earnings, and distribute US$155,090,832
in the form of US$1 per share held, as per the
• Gave the chairman and members of the board of
directors the authorizations stipulated in Articles
158 and 159 of the Lebanese commercial code.
The resolution of the political situation renewed activity in Beirut city center.
The year 2007 registered a net profit of US$156 million, US$181 million before
income tax. This represents an 18% increase over 2006. A major indicator of our
performance was the 14% increase in land sales revenues over 2006, to which
can be added US$391 million in cash inflows from the sales backlog.
Rental revenues amounted to US$21 million. Due to the increase in sales
receivables and cash, and the significant debt reduction, net interest income
continued to increase to a positive US$24.3 million. A new source of income was
Solidere International (SI), with US$17.5 million (representing 37.2% of SI’s net
income), and US$50.5 million (resulting from consolidating the equity of SI),
included in the consolidated profit.
The South Souks are to be delivered at the latest by end 2008.
In the Waterfront District, reclamation is proceeding for the delivery of the sold
sites. Infrastructure and public domain design is awaiting ratification by government
decree of the master plan proposed by Solidere.
Having fluctuated throughout 2007 between a high of US$25 and a low of US$15
in active trading, the shares closed the year more than 40% above 2006, at around
US$23. At year end, market capitalization was US$3.9 billion. At end of May 2008,
improved business expectations resulting from the political solution led to a sharp
increase in share prices to US$35 per share.
Dividend distribution
The dividend distribution relating to fiscal
year 2007 took effect starting August 29,
2008, in accordance with the annual
general meeting resolution.
A dividend of US$1 (US$0.95 after deducting
the compulsory 5% tax on profit
distributions) was distributed per share held,
as per the Shareholders’ register at the
general meeting date.
The total dividend distribution will amount
to US$155,090,832, the balance being
treasury shares held by the Company.
Solidere International Limited has a very positive impact on Solidere’s financial
position. The company, registered in DIFC in June 2007, was capitalized at
US$700 million. Projects that were in the pipeline in 2007 have materialized in 2008,
and companies were established to pursue the projects in their respective
countries. They include Al Zorah Project in Ajman, UAE; two projects, Westown and
Eastown in Cairo, Egypt. Among the projects in the making is the Bodrum Project,
Turkey. Having been short-listed in partnership with Vinci (France) for the Monaco
Urban Expansion and Development at Sea, we submitted our offer in March 2008.
Several opportunities have been identified in Saudi Arabia and in several parts of
the Middle East and the Mediterranean Basin.
The year 2009 is expected to be a consolidation year for our international activities.
In Beirut, it is also the target date for intense activity in the Beirut Souks and for
the launching of land development in the Waterfront District, a major phase in
Solidere’s master plan.
Judging from our past and new performance, and in light of the promising local and
regional climate now prevailing, we expect the near future to be quite favorable to
our activities, both here and globally.
(Extracts from Annual Report 2007)
2
• Cleared the chairman and members of the board
of any liability for matters relating to the
Company management in 2007.
Share performance during the 3rd quarter 2008
Share A - Daily Closing Prices
Volume
767,390
$40
6,099,413
530,382
400,000
$35
300,000
$30
200,000
$25
100,000
$20
0
1 Jul 08
30 Jul 08
29 Aug 08
29 Sep 08
Share B - Daily Closing Prices
Volume
4,134,204
$40
400,000
$35
300,000
$30
200,000
$25
100,000
0
$20
1 Jul 08
30 Jul 08
Share price (US dollars)
Trading volume
29 Aug 08
29 Sep 08
Having reached early in
July an all time high of
US$39.8, Solidere shares
retreated slowly for the
balance of the quarter on
profit-taking with lack of
investor interest in the
financial markets as a
whole.
This mood was exacerbated
by world financial markets
turmoil impacting the stock
markets of the region,
which ended the quarter in
the red on worries that the
region may not escape the
global credit crunch. The
Lebanese financial market,
on the other hand, may not
be affected as much, as
they operate under strict
regulations that prohibit
speculative activities.
Share A fluctuated between
a low of US$26.88 and a
high of US$39.80, closing at
US$28.73, a 22% decrease
from the previous quarter.
Share B traded between a
low of US$26.84 and a high
of US$39.68, closing at
US$28.34, a 12% decrease
from the previous quarter.
Trading activity boomed
during the quarter, with
around 19 million shares
of both classes traded in
the local market, 50%
above the previous quarter.
The GDRs traded in the
London Stock Exchange
followed the locally traded
shares, closing the quarter
at around US$28.74, with
a 22% decrease compared
to the previous quarter
closing level.
3
solidere international news
A memorandum of understanding (MOU)
was signed to this effect on July 16, 2008
between Amanat Muhafazat Jeddah (the
Amana), and the Consortium of developers
and financial institutions comprising:
Urban Development Company Ltd (KSA),
Solidere International Limited (DIFC, UAE),
Siraj Capital LLC (KSA), Al Tijariyah-CRC
(Kuwait) and Venture Capital Bank BSC
(Kingdom of Bahrain).
All Consortium members signed the
agreement on behalf of Sharikat Tatweer
Wasat al Moudoun (STWM), a Saudi Arabian
company under formation, of which they
are founding members.
Jeddah Central District (JCD) is potentially
the largest city center urban renewal and
regeneration project in the Arab world,
covers around 6 million sq m of land in
the heart of the city, of which 450,000 sq m
are to be reclaimed from the sea, with
a planned waterfront of 16 km. The project
also calls for the creation of two man-made
islands around a 1 million sq m water basin
facing Jeddah in the Red Sea.
4
Cairo Projects
Progress has been achieved on several fronts
of Al Zorah Project. These include finalization
of the detailed master plan for Phase One of
the Project, which covers around 9 million sq m
out the 12 million sq m total land area.
Progress in Eastown and Westown includes
the design of pilot projects both in real estate
and landscaping.
They also include infrastructure design, marine
works, district cooling, and the starting of
construction of the five main roads.
The Westown landscape design framework, set
up by Craft-Pegg (UK), features Central Park, a
raised mound with terraces. Low-rise restaurants
built on development land are treated as an
extension to the park.
As far as land sale deals, around 30% of the
Project has been sold to date, amounting to
7 million sq m of built-up area out of a total
of 21 million sq m. The Company has already
secured signed sales agreements for most
of the deals.
Designed by Allies and Morrison (UK), the Spine
is a 40 m major pedestrian link featuring iconic
monomarque buildings interspersed with open air
markets. Sustainable architecture is illustrated in
a project by Wilkinson Eyre (UK) that uses
photovoltaic roof panels to generate electricity.
The first real estate project being developed by
the company itself is Al Zorah Riviera, designed
by Axel Schultes (Germany). The project will
reflect outstanding elements together with the
natural ambience of Al Zorah.
In Eastown, the landscape framework by Ilex
(France) features a major axis in the form of an
undulating green spine that links the residential
area to the business park.
Strategically located on the sandy Ajman beach,
next to Al Balad quarter, the project offers 1,400
to 1,500 freehold residential units in an attractive
mix of high-rise buildings ranging from 22 to 45
floors. The units will comprise studios, one, two
and three bedroom apartments.
Jeddah Central District
Solidere International is a leading member
of the Consortium that was granted the
exclusivity for the master planning and
development of Jeddah Central District.
Al Zorah
This ambitious project aims at placing
Jeddah again at the forefront of cities in
the Arabian Peninsula.
The MOU was the result of the Consortium
meeting specific obligations and
commitments, including developing a new
illustrative master plan for JCD, designing
a sustainable solution for remediation of
the polluted/stagnant lagoons, developing
a restoration plan and strategy for
rehabilitating the Historic District, and
funding a series of studies to support
the Project.
STWM will be signing a professional
services agreement with Solidere
International to upgrade, design and deliver
an illustrative master plan within one year
and a massing/detailed master plan within
two years.
The Amana had earlier commissioned
studies to develop a comprehensive
strategic urban development plan for
Jeddah through the year 2025 and supports
the institutional framework to undertake
the long-term implementation and
development of this plan.
The plan divided the city into ten districts
and designated Jeddah Central District
as a special development zone with a
preferential FAR.
A key partner to the Consortium in the JCD
Project is Jeddah Development and Urban
Regeneration Company (JDURC), an
Amana-owned listed company, which was
established to work with the private sector
to adopt and execute strategic development
projects relating to the urban regeneration
of Jeddah.
They will be surrounded by 5-star resort hotels,
marinas and green public space. Al Zorah Riviera
residents will enjoy direct access to the white
sand beach and stunning views of the sea,
the marina and the old city fort.
Both projects feature a Balad, attempting to
recreate a historic core similar to that of Beirut.
Monaco
Urban Expansion and Development at Sea
Following an analysis of the five proposed
schemes submitted in March 2008, two schemes
were singled out by the Principality on technical
and urbanistic grounds. However, none of the five
finalists were excluded.
The financial capabilities of the bidders are now
under study, and this will have an important
impact on the Principality’s choice.
Solidere is optimistic about the final decision,
expected between end 2008 and February 2009.
JCD is among the first mega projects and
public-private partnerships in which
JDURC is involved.
STWM is the ‘Lead Diamond Sponsor’ of
the Makkah Area Mega Projects Exhibition
opening in Jeddah on October 11, 2008 and
running for three months.
The exhibition will be inaugurated by His
Royal Highness King Abdullah Bin Abdel
Aziz, Custodian of the Two Holy Mosques.
5
the new city center
A major avenue takes shape
One of the main east-west axis of the new city
center is taking shape. Picking up from Avenue des
Français along the old shoreline, Adnan El Hakim
street stretches west to Fakhreddine sreet.
An important component of the Hotel District, the
new avenue is flanked by five green squares
currently under design. These are Mina El Hosn
Square, Zeitouneh Square and two sections of the
Old Shoreline Walk; facing the latter is a small
open space with a fountain and benches.
Beirut Souks
A number of South Souks tenants began fit-out
works at the end of August 2008, with others to
follow suit between September and November.
Once lease agreements are signed, tenants
prepare their interior designs and submit them
to Solidere to obtain quality control clearance.
Three international hotels have chosen this
prestigious address. Monroe Hotel is operational,
Grand Hyatt Hotel is under construction and
Rotana Hotel is under design.
A new company for Beirut Souks management
was incorporated in August, and a media
campaign will be launched October through
December.
Projects
240
15
27
35
56
BUA sq m
853,434
340,262
207,048
370,060
964,723
373
2,735,527
Status
Completed
Finishing stage
Under construction
Under permitting
Under study
3 PI EVd LY
24 Avenue du Parc
Rotana Hotel
Garden View
Capital Plaza
Zaha Hadid’s concept design for the North Souks
department store is progressing towards its
presentation in November 2008.
Bay Tower
Beirut Tower
Platinum Tower
Below is the status of the 373 real estate
projects, offering 2,735 million sq m of
built-up area, that have so far been the
subject of development.
Provisions for information points with interactive
screens and desks have been taken by Solidere,
with their location defined throughout the Souks.
The remaining developments are residential.
1330 Park Avenue and Capital Garden buildings
have been completed. Beirut Tower and Platinum
Tower are near completion. Capital Plaza, Garden
View and Bay Tower are under construction. Dib
Tower and Town Tower have started piling and
excavation works and await building permit from
Beirut Municipality. Venus Real Estate and Trust
Construction are currently under study.
Monroe Hotel
City center real estate projects
EVd U EVd LY
Developments along the avenue have a distinctive
style, announcing the large-scale, modern
character of the planned New Waterfront District.
Land use is predominantly residential and hotel
projects, with retail at street level.
7.22FL
Adnan El Hakim street north elevation
6
Adnan El Hakim street south elevation
7
designing the future
1. Plus Tower One and Plus
Tower Two, part of Beirut Gate,
designed by Arquitectonica
2. The Landmark, designed by
Atelier Jean Nouvel
3. House of Arts and Culture site
3
(highlighted in color)
1
2
A number of very large real
estate projects were
relaunched in the city center
after the clearing of the
political situation.
House of Arts and Culture
An international architecture
competition was launched on
July 4 for the design of the
House of Arts and Culture in
Beirut city center.
Beirut Gate
Phoenician Village
The Landmark
The project, along the Martyrs’
Square axis, consists of eight
plots ranging from 1,126 sq m
to 4,681 sq m and totaling
174,800 sq m of floor area.
Component projects designed
by world class architects are
undertaken by a group of
developers led by Abu Dhabi
Investment House. Residential
use represents 78% of total
floor area, offices 6%, retail
and cultural activities 16%.
The project is being developed
by the Kuwaiti Al Sayer Group
and Al Dhow Investment
Company on two sites, facing
Martyrs’ Square on one side
and the Port first basin on the
other, and totaling 20,311 sq m
of land area.
Designed by Atelier Jean
Nouvel, this project located on
Riad El Solh Square is being
developed by The Landmark
s.a.l. It will offer 74,500 sq m
of floor area with the following
land use: commercial 22%,
hotel 37%, luxury apartments
18%, furnished apartments
17%, entertainment and
leisure 6%, with parking
facilities.
Plus Tower One and Plus
Tower Two, on lots 1542 and
1525 Bachoura, are being
developed by Property Plus to
offer 27,800 sq m of floor area.
Their design by Arquitectonica
(US) having obtained Solidere
approval, is to be submitted to
Beirut Municipality.
8
Phoenician Village will offer
205,735 sq m of floor area
consisting of two residential
towers, two hotels, commercial
center and restaurants, with
parking facilities.
This was announced by the
Lebanese Minister of Culture
in Milan, at the International
Union of Architects (UIA)
general assembly. The open
competition conforms with
UNESCO-UIA regulations.
The project is on 3,785 sq m
of land in the Ghalghoul
sector, on block 128-4, part
of lot 739 Bachoura. The site
became State property as
part of a property swap
agreement with Solidere.
Having obtained Solidere
approval, the project is to be
submitted to the Municipality
for approval.
Blooming city center
Beirut city center is lively
with its green open spaces.
Solidere had provided the
Culture ministry with a
development brief for the
project, suggesting that an
architecture competition
should be organized for
the project design.
Gaia-Heritage was
commissioned to develop
the concept of the House,
its cultural and educational
objectives, as well as its
architectural program and
communication strategy.
A dynamic and interactive
center is to be developed,
with a vast range of spaces
totaling 15,901 sq m of floor
area devoted to education,
culture, interactive and
transdisciplinary exchange.
Lebanese creativity in visual
arts, performance, music,
literature and science will
gain international exposure,
reinforcing Beirut's leading
role in the fields of art and
culture.
www.darbayrut.org
the spirit of beirut
Newcomers
Embassies
Norwegian Embassy
Business
Arab Finance House
G5 Company
Ramadan
September marked the holy
month of Ramadan, a time of
fasting, prayer and charity.
On the occasion, the beautifully
illuminated Al Omari, Abou
Bakr, Amir Assaf, Amir Munzer
and Mohammad Al Amin
mosques held special evening
prayers. Classes were also
offered in Koran interpretation
and the life of the Prophet.
Solidere held a Company iftar
at Biel’s Royal Pavillion on
September 26. Other iftars were
organized in the numerous city
center restaurants and cafés,
which opened into the morning
hours to accommodate the
all-night crowds.
10
Hotel
Ramada Downtown
Retail
Fendi
Alexander McQueen
Passion Boutique
Zèle Shoes
Nancy
Eclectic
Souk al Barghout
Souk al Barghout is back.
This year marks the 23rd
session of the souk, which was
launched in 1995 and suffered
a three-year interruption.
Brimming with antiques and
trinkets, the souk was a
treasure trove for collectors
and dabblers alike. Martyrs’
Square, July 30 - August 10.
11
performing arts
Other events
Triumphant homecoming
“Martyrs’ Square is yours!”
were the parting words of
global pop star Mika, who
kicked off the Baalbeck
Festival in his hometown
Beirut, with an explosive sold
out concert.
On July 27, 15,000 feverish
fans indulged in Mika’s
celebrated 3.5-octave voice,
addictive pop symphonies and
high-energy stage acrobatics.
Singing and dancing continued
through the night in Martyrs’
Square, transformed by giant
fantastical scenery and
illuminated by dazzling
pyrotechnics.
Describing the experience
Mika said: “The crowd was
electric and quite possibly the
loudest singing crowd I have
ever heard. The gig in Beirut
tonight was truly one of the
best moments of my life.”
12
Music Hall
Liban Jazz, Erik Truffaz and
Malcolm Braff, Aug 26
Samedi soir à Beyrouth,
Bernard Lavilliers, Sept 28.
Mouawad Museum
Abdel Wahab et le Piano,
concert, Elie Rizkallah, Sept 18.
BIEL
DJ Tiesto, July 31.
DJ Bob Sinclair, Aug 2.
Street performances
Foch-Allenby
À bout de souffle, French
troupe Cie le SAMU, Sept 3
Cityzens, by German troupe
BK Compagnie, Sept 12.
Samir Kassir Foundation
Les murs ne font pas la
prison, presentation given
by Joëlle Japessi, Sept 18.
Lot 1075 Saifi
International Day of Peace
2008, concert and activity
for youth, Sept 22.
13
cultural activities
Instituto Cervantes
Portraits Work-In-Progress,
a video presentation and
conference, Sociedad Doctor
Alonso Catalunya, Tomás
Books,
lectures
etc.
Agaray and
Sofía Asencio,
July 29
Mirages d’Orient, presentation
by Dr Antoine Khatter on
Tomas Alcoverro’s book,
Septmber 18
Exhibitions
Galerie Alwane
Cité et Citadins, Zeina Assi,
July 1-16
Afkart 2008
Lebanese artisanat, July 2-6.
BIEL
Issa Halloum, July 22 – Aug 8.
Art Deco, July 3-6
Galerie Aida Cherfan
My land is not for sale, Mona
Trad Dabaji, July 11-31
Joaillerie Liban Exhibition 08,
international jewelry, watches
and luxury goods exhibition for
the middle east, Aug 8-12.
Collective Artists’ Exposition,
work by H. Madi, M. Rawas,
A. Chamas, F. Codsi and
T. Cascella, Aug 1 – Sept 30.
Souk An Najjarin
Regard sur le Liban du XIXe
siècle, Grégoire Sérof,
July 25 – Aug 12.
Planet Discovery
Classes in painting, puppetmaking, mondays to saturdays.
Souk El Tayeb
Weekly market, Saturdays.
Los olvidados, Viridiana, La
vida criminal de Archibald de
la Cruz, Él, film series by Luis
Buñuel, Sept 23-26
Intensive Spanish classes,
July 7 – Aug 1, Aug 4-29,
Sept 1-30.
Ceramic Lounge
Jeita, histoires de grottes,
book signing and conference,
Youmna and Joumana Medlej,
Sept 20.
Monroe Hotel
Les enfants travailleurs au
Liban: problématique et
recommandations, a
conference organized by René
Mouawad Foundation, July 9.
Virgin Megastore
Booksigning
The Age of the Warrior by
Robert Fisk, booksigning, July 1
CD and DVD signing
Violin Affair by Jihad Akl,
July 12
La Cyclothymie pour le
Meilleur et pour le Pire,
L’anxiété: Vaincre ses peurs,
soucis et obsessions au
quotidien and Cyclothymie:
Troubles bipolaires des
enfants et adolescents au
quotidien, book signing by
Dr. Eli Hantouch, July 24
Electrojerk by Beirutbiloma,
July 25
Bassem Feghali, Aug 20
Bassam of Star Academy,
Aug 22
Mohammed Hamaqi, Aug 25.
Black Swan, booksigning by
Nassim Taleb, July 24
Inside the Red Mansion by
Oliver August, booksigning,
Aug 28
Storytelling, saturdays
and sundays 5-7 pm,
July 1 – Aug 31.
14
15
1
2
3
4
1. Messrs. Pil-Kyun Chang, Kim
Kyoo Sik and Jay Baek with Solidere
Chairman Nasser Chammaa
2. Mr. Gaston Gapo with vicepresident Maher Beydoun
3. Messrs. Markos Kyprianou and
Kornelios Korneliou with general
manager Mounir Douaidy
4. Madam Maya Parant
Visitors
Official visitors
Madam Maya Parant, French
ambassador’s spouse; Cypriot
Foreign affairs minister Markos
Kyprianou and a delegation, with
ambassador Kornelios Korneliou
and chargé d’affaires Kyriacos
Kouros; Congolese minister of
land settlement Gaston Gapo;
Eisa Zakaria and officials from
the Sudanese ministry of physical
planning and urban public utilities;
Mathilde Chaboche with a Mairie
de Paris delegation and Rachid
Jalkh from Beirut municipality;
Mrs. Shereen Sherzad, head of
high commission for Erbil Citadel
Revitalization, with Ahmed Jaf,
office and public relations
manager, and Sami Al-Khoja,
monitor from UNESCO Iraq office.
senior vice-president CFO and
general manager deputy CFO
for MENA and South Asia, Allianz
Bahrain, with Bassam Khoueiss,
head of marketing sales, Beirut;
Mohammed Asif, chief financial
officer, Al Zorah Development
Company, Ajman; 27 members
from SODIC, Egypt; Nader Yassine,
investor; Pil-Kyun Chang, CEO and
president, Mayfair Resort Group,
Seoul, with Kim Kyoo Sik, director,
Shinnong, Seoul, and Jay Baek,
senior consultant Kotra, Seoul;
Georgiana Gibbs and Dominic Hall,
Bell Pottinger, London; Louise
Cantrill, Abed Bibi, and Marie
Clark, Wolff Olins, London; Charles
Stisted, CEO, Guards Polo Club,
UK, with Nayla Lahoud.
Business
Issam Essa Al-Asousi, deputy
managing director, International
Investment Group, Kuwait, with
financial analyst Mahmoud Hassib;
Dar Al Handasah director Riad
Mneimé with investors from
Kuwait and Qatar; Dietmar Raich
and Andreas Buelow, respectively
Professionals and academics
Bilal Orfali, coordinator at AUB
with international students;
architects Rami El Dahan and
Soheir Farid, El Dahan and Farid
Ltd, Egypt; 25 lebanese and
international members of 98
weeks organization; journalists
from the US and Canada.
16
Gabriele Basilico Beirut
Beirut is to host a major exhibition.
Gabriele Basilico photography
of Beirut in 1991 and 2003 will
be displayed in Planet Discovery
exhibition center from October
8 to 31.
The exhibiton is organized by
Solidere in collaboration with the
Italian Ambassador and the Italian
Cultural Institute in Beirut.
Word vs picture
Icontact is the title of the awardwinning project presented by Lucie
Abi Nehmé as a Masters’ thesis in
graphic design at Universite du St
Esprit, Kaslik (USEK).
A member of the Solidere Corporate
Reporting and Publications team,
Lucie traced the evolution of the
emoticon from 1978-2008. Her
thesis establishes the inevitable
superiority of the word to this
pictorial expression of emotion.
The Lebanese Company for the Development and Reconstruction of Beirut Central District s.a.l.,
POBox 119493 Beirut 2012 7305 Lebanon, Tel 961 1 980650 / 980660, Fax 961 1 980661 / 980662, [email protected], www.solidere.com
in and about the city center