Beirut blast blows dark cloud over local real-estate bellwether
Until last week, flagship Lebanese property company Solidere had been a bright spot for investors looking to protect their money as the country's finances slid into meltdown. The massive explosion that wrecked swathes of Beirut real estate suddenly changed much of that.
Solidere was set up in 1994 to redevelop the heart of the Lebanese capital, ravaged by civil war. Much of the construction it carried out has suffered massive damage, devastated by the Aug. 4 blast in the city's port that killed more than 170 people.
"The scale of the damage in Beirut is humongous and catastrophic," said Nabil Al Rantisi, the managing director of wealth management at Daman Investments in Dubai. "Solidere is a real estate company that lives off development and rental. With no business activities in these areas, they're not going to receive payments. That is going to continue for a while."
Solidere, which had a market value of about $2.3 billion as of Wednesday, is the most liquid stock traded in Lebanon and viewed as a proxy for politics in the country. Since the worsening of the economic and financial crisis, with escalating inflation and limits on deposit withdrawals, many investors turned to its U.S. dollar-denominated shares as a haven. That sent the stock surging more than 150% since early October.
A spokesman for Solidere wasn't immediately able to comment.
The company was founded by former Prime Minister Rafik Hariri, who made a construction fortune by rebuilding palaces for the Saudi royal family. The family of the billionaire businessman, killed in a bombing in Beirut's seafront hotel district in 2005, was the majority shareholder of Solidere at the time of his death. His son, Saad Hariri, resigned as prime minister in October after anti-government protests escalated.
Solidere was tasked with rebuilding 1.8 million square...