SOLIDERE

ANNUAL
08
REPORT

The Lebanese Company for the Development and Reconstruction of Beirut Central District
 THE
MASTER
PLAN
PREWAR SHORELINE

NEW DEVELOPMENT - LOW DENSITY

NEW DEVELOPMENT - MEDIUM DENSITY

NEW DEVELOPMENT - HIGH DENSITY

DEVELOPMENT BELOW CORNICHE LEVEL

RESTORED BUILDING

PUBLIC OR RELIGIOUS BUILDING

PUBLIC AND PRIVATE OPEN SPACE

ARCHEOLOGICAL SITE

PEDESTRIAN STREET / LINK

UTILITIES

Includes proposed modifications to the New

Waterfront District sector plan.
 CONTENTS
ADDRESSES SOLIDERE ANNUAL REPORT 2008
Auditors Introduction
Deloitte & Touche
Consolidated Financial Highlights
Arabia House
131 Phoenicia Street
06
PO Box 961
Beirut, Lebanon Chairmans Message Vis--vis the world economic crisis,
t +961 1 364 700 08 Solidere differentiates itself from other
f +961 1 367 087 companies, particularly those within the
regional real estate development industry
Ernest & Young p.c.c.
Commerce & Finance Bldg. Beirut City Center The Master Plan
Kantari 14 Solidere
PO Box 11-1639
Beirut 1107 2090, Review of Operation
Lebanon
t +961 1 760 800 Existing City Center Master Planning
f +961 1 760 822
18 Infrastructure
Broadband Network
Corporate legal counsel
Hardscaping and Street Furniture
Sami Nahas Parking Facilities
Attorney-at-Law Operation and Maintenance
34 Clemenceau Street Landscaping
BBAC bldg Heritage Trail
PO Box 11-4570 Archeology
Beirut, Lebanon
t +961 1 364 990 Waterfront District Master Planning
+961 1 374 990 32 Solidere Master Plan Amendment
f +961 1 369 663 Beirut Marina
Land Reclamation and Preparation
Solidere Infrastructure and Public Space
Registered office
Restoration Restoration Process
Solidere Bldg 149
44 Recuperated and Sold Buildings
Saad Zaghloul Street
PO Box 11 9493
Solidere Buildings
Beirut 2012 7305 Religious Buildings
Lebanon
t +961 1 980 650 Beirut Souks The Site
+961 1 980 660 50 The Concept
f +961 1 980 661 Moneos Souks
+961 1 980 662 South Souks
Urban Experience
Shopping and Leisure
Souks Materials
North Souks
02 03 Real Estate Strategy Beirut Waterfront Development
74 Other Real Estate Projects

Sale and Rental Strategy Sales Results

82 Real Estate Leasing
Sales Procedure / Payment Schemes
Property Marketing
Property Management
Future Prospects

Developers Projects City Center Southern Gateway

86 Foch-Allenby
Saifi
Martyrs Square Axis
Near the Beirut Souks
Wadi Abou Jamil
Zokak El Blatt
Hotel District
Solidere Management Services

Corporate Funding, Treasury and Treasury Stock Treasury

98 Corporate Funding
Treasury Stock

Solidere Shares and GDRs Exchange Listings and Ticker Symbols

100 Analysis of Share Prices
Dividend Distribution
Research and Investor Relations

Management Systems and Studies Management Information Systems

102 Urban and Strategic Studies

Copyright 2009 Solidere All Financial Statements and Auditors Report

rights reserved. No part of this
publication can be reproduced
or transmitted in any form or
by any means, whether by
photocopying, recording, or
fascimile machine or otherwise
howsoever without prior
written permission
from Solidere
Consolidated Financial Statements Independent Auditors Report
104 Consolidated Balance Sheet
Consolidated Income Statement
Consolidated Statement of changes
in Equity
Consolidated Cash Flow Statement
Notes to the Consolidated Financial Statements
109

Board of Directors - General Management

144
Solidere Annual Report 2008

AT THE HEART OF LEBANONS

CAPITAL, BEIRUT CITY CENTER
IS AN URBAN AREA THOUSANDS
OF YEARS OLD, TRADITIONALLY
A FOCUS OF BUSINESS, FINANCE,
GOVERNMENT, CULTURE AND
LEISURE. ITS RECONSTRUCTION
CONSTITUTES ONE OF THE MOST
AMBITIOUS URBAN REVITALIZATION
PROJECTS OF OUR TIMES

04

AS IT SPEARHEADS AND OVERSEES THIS PROJECT, SOLIDERE IS BRINGING LIFE TO BEIRUTS

CENTRAL DISTRICT AND HOPES TO TURN IT INTO THE FINEST CITY CENTER IN THE MIDDLE EAST.
THE LEBANESE COMPANY FOR THE DEVELOPMENT AND RECONSTRUCTION OF THE BEIRUT
CENTRAL DISTRICT S.A.L. (SOLIDERE) IS A JOINT-STOCK COMPANY ESTABLISHED ON MAY 5, 1994.
IT IS BASED ON LAW 117 OF 1991, WHICH REGULATES LEBANESE REAL ESTATE COMPANIES AIMING
AT THE RECONSTRUCTION OF WAR-DAMAGED AREAS, IN ACCORDANCE WITH AN OFFICIALLY
APPROVED MASTER PLAN. ITS SHARE CAPITAL IS US$1.65 BILLION.

THE COMPANY ISSUES ANNUAL AND SEMI-ANNUAL REPORTS TO ITS SHAREHOLDERS.

SOLIDERES ACTIVITIES THROUGH THE END OF 2008 ARE ALSO SUMMARIZED IN ITS
FOURTEENTH ANNUAL REPORT. THIS ANNUAL REPORT INCLUDES CONSOLIDATED FINANCIAL
STATEMENTS, WHICH CONSOLIDATE THE ACCOUNTS OF SOLIDERES SUBSIDIARIES DEPENDING
ON ITS SHAREHOLDINGS. SOLIDERES SHAREHOLDINGS IN SUBSIDIARIES AS AT END 2008 WERE
AS FOLLOWS: BEIRUT WATERFRONT DEVELOPMENT S.A.L. 50%; BEIRUT REAL ESTATE
MANAGEMENT AND SERVICES S.A.L. (BREMS) 50%; SOLIDERE MANAGEMENT SERVICES S.A.L. 100%;
SOLIDERE MANAGEMENT SERVICES S.A.L. (OFFSHORE) 100%; SOLIDERE INTERNATIONAL HOLDINGS
S.A.L. 100%; SOLIDERE INTERNATIONAL LIMITED, DIFC, 1%. FURTHERMORE, SOLIDERE
INTERNATIONAL HOLDINGS S.A.L. OWNS 37.19% OF SOLIDERE INTERNATIONAL LIMITED.

SOLIDERE INTERNATIONAL LIMITED IN TURN OWNS 77.27% OF SI AL ZORAH EQUITY INVESTMENTS,

INC. (CAYMAN ISLANDS), WHICH ITSELF OWNS 44% OF AL ZORAH DEVELOPMENT (PRIVATE)
COMPANY LIMITED P.S.C. AJMAN FREE ZONE, UAE; AND DIRECTLY 5% OF THE SAME COMPANY,
RENDERING ITS COMBINED INVESTMENT AT 39% OF THAT COMPANY. SOLIDERE INTERNATIONAL
LIMITED ALSO OWNS 45% OF BREMS INTERNATIONAL S.A.L. (OFFSHORE). THE LATTER IN TURN
OWNS 50% OF AMMAN REAL ESTATE MANAGEMENT AND SERVICES LIMITED (AREMS), AMMAN.
THE CONSOLIDATED FINANCIAL STATEMENTS ARE PREPARED AND AUDITED IN ACCORDANCE WITH
INTERNATIONAL FINANCIAL REPORTING STANDARDS.
Solidere Annual Report 2008

CONSOLIDATED
FINANCIAL
HIGHLIGHTS

07 08
SUMMARY OF OPERATIONS IN US$ MILLION
06
Gross land sales 256.6 288.5
Gross rental income 21.7 20.8
General and administrative expenses 19.3 18.1
Net income 182.7 224.2
Sales backlog 605.5 914.1

STOCK DATA PER SHARE IN US$

Earnings 1.178 1.445

Shareholders equity 11.99 11.81
Stock price range
A shares 39.80 - 16.50 25.09 - 14.99
B shares 39.68 - 16.51 25.12 - 15.00
GDRs 38.85 - 15.00 24.75 - 15.00

FINANCIAL DATA IN US$ MILLION

Cash and securities 297.6 337.9

Accounts and notes receivable 296.4 318.7
Properties held for development and sale 1,274.5 1,404.7
Investment properties 216.8 150.3

Retained earnings 272.3 263.3

Legal reserves 94.0 75.5
Treasury stock (168.5) (168.5)
Total shareholders equity 1,859.7 1,832.0

FINANCIAL RATIOS IN %

Gross profit margin 71.7 60.82

Return (interest income) on liquid assests 4.6 5.5
Debt to equity 0.13 0.38
Solidere Annual Report 2008
CHAIRMANS
MESSAGE
08
On the regional and international level,
despite the exacerbation of the world
financial and economic crisis in the
second half of 2008, with its serious
repercussions on regional markets,
Beirut city center has maintained its
position as an investors destination.
The year 2008 witnessed dramatic
developments on the local, regional
and global scenes, which had important
repercussions on Solidere. In Lebanon, a
turning point occurred by midyear. The
resolution of the political situation and end
of the sit-in led to renewed hope.
In central Beirut, streets
regained their vibrancy
and businesses recovered
their normal level of
economic and tourist
activity.
Construction accelerated, as many projects
that had been thwarted during the preceding
period were resumed. As a result, a number
of completed developments are expected to
be inaugurated during this year.
On the regional and international level,
despite the exacerbation of the world
financial and economic crisis in the second
half of 2008, with its serious repercussions
on regional markets, Beirut city center
has maintained its position as an investors
destination.
This is reflected in Solideres consolidated
financial statements. During 2008, Solidere
realized a net income of US$214.3 million
(US$182.7 million after income tax amounting
to US$31.6 million). This results mainly from
increasing land sales, as well as property
rental income. Land and real estate sales
amounted to US$257 million. Furthermore,
a sales backlog of US$605 million at year
end is expected to be translated in realized
sales in the next three years. Land sales
of around US$294 million have been signed
in the last six months, and ongoing
negotiations for additional sales are
expected to be finalized in the coming
few months.
The sustained demand comes as no
surprise, even in the regional and
international economic context. As city
maker, we pride ourselves that we always
take the necessary actions to create,
preserve and enhance value in Beirut city
center. Our development activities, based on
careful master planning, have enhanced a
site with inherent assets, and where land is
in limited supply, through high-quality
infrastructure, landscaping, upkeep and
services. As far as architecture and real
estate, we are providing in the city center
products that are suitable for end-users
and investors.
As land bank, we seek to enhance land
values throughout the Project, rather than to
maximize profit on a specific development.
We are not involved in real estate
development on a retail scale and are very
selective in land sales, targeting developers
with serious plans, not speculators. Our risk
is minimized by favoring block sales to
master developers with strong
financial means that are well-
positioned in the market. Our
model is thus in contrast to
some models based on retail
development, where, with
little capital offered upfront,
developers, rather than
investing their own money, rely
on cheap and easy finance
from banks and off-plan sales
to investors to fund their
projects. This is why we believe
that our model continues to work today,
while those models do not, as banks are
running scared of further exposure to real
estate projects, and sales continue to dip as
buyers become increasingly uncertain.
The Companys balance sheet figures
illustrate its financial strength, represented by
a solid land bank, a high value real estate
property portfolio, the quality of its receivables
and financial investments, and the soundness
of its policy of maintaining high liquidity levels
with no debt. These factors combine to give it
resilience in the context of unfavorable
political or economic circumstances.
The inventory of land and projects in
progress amounts to US$1,274 million, net
investment properties to US$217 million,
and investment in Solidere International to
US$296 million. Solidere does not revalue its
assets, which are still registered at their
book value, in compliance with international
accounting standards and best practice.
Resulting mostly from development land
sales, accounts and notes receivable of
US$1,027 billion at year end, include
US$296 million from realized sales, with the
biggest part of maturities at various dates
during the next five years. The balance of
US$731 million represent the reserve of
signed land sales not yet recognized in the
Companys income statement, but expected
to be so during the coming three years after
completing all necessary criteria for their
recognition.
The cash position of the Company at the end
of 2008 amounted to around US$292 million.
Solidere has always maintained a high level
of liquidity to ensure financing most of its
development projects and other operations.
Medium- and long-term indebtedness was
reduced to around US$2 million, and
outstanding short-term bank facilities,
needed for effective cash management,
amounted to US$177 million.
09
In Beirut, our city making activities start
with master planning, with guidelines and
detailed plans defining the rules and
regulations of construction and urban
development in Beirut city center.
no debt, we will not be under any pressure
that ensure growing revenue streams.
urban and standard-of-living conditions
first approved by Beirut Municipal Council
Vis--vis the world
economic crisis, Solidere
differentiates itself
from other companies,
particularly those within
the regional real estate
development industry.
The Company does not suffer from any toxic
debt, unlike many regional developers. Having
in the area within the next two years.
from any bank for deleveraging or refinancing.
We have also always sought to keep a
comparatively high level of liquidity, and in fact
hope to maintain a fixed percentage of assets
liquid for the life of the company. Thanks to
high liquidity with no debt, we expect to fully
weather the financial crisis.
The creation and preservation of value
extends to maximizing Company profits
through innovative real estate projects,
quality development and property
management services, and new business
To Solidere, a primary source of reliable
income is rentals from its growing revenue
generating property portfolio. The Company
earned around US$22 million in rental
revenue in 2008, a figure expected to
grow threefold at the full completion of
Beirut Souks.
In Beirut, our city making activities start
with master planning, with guidelines and
detailed plans defining the rules and
regulations of construction and urban
development in Beirut city center. This is a
continuous and ongoing operation whose
success depends to a large extent on
flexibility and adaptability to changing
circumstances and to various economic,
throughout development, which spans a
long time period. Beirut city centers initial
master plan, ratified in Decree 4830 of 1994,
received a number of amendments that were
and the Higher Council for Urbanism and
then ratified in Council of Ministers decrees.
These amendments relate to
various requirements and
constraints resulting from
archeological discoveries in several
areas, overlapping boundaries of
existing and preserved buildings,
architectural requirements of a
number of projects; and some were
based on modern technical and
planning studies.
Having completed land
reclamation and preparation of
the New Waterfront District,
Solidere is initating the design of
infrastructure, hardscaping and
landscaping of open areas, in order to make
possible the start of real estate development
As far as our real estate activity, we have
pursued implementation of Beirut Souks
with a view to complete the South Souks
and officially launch the project during the
last quarter of 2009. Many of the 250 retail
shops are progressively completing their
preparations for their gradual opening
starting the summer. Visitors will be invited
to stroll along streets, some covered and
some open, shop to their hearts content,
stop and rest in landscaped squares, or
enjoy restaurants with special character.
Solidere Annual Report 2008
10
In association with real estate,
we are launching a new activity:
Hospitality Management. Solidere is
strengthening the restaurant activity
of the South Souks to make them a
restaurant destination.
One of the most
important commercial
centers in Lebanon and
the region, Beirut Souks
are to constitute the
heart of economic
and tourist activity
in Beirut city center, contributing to put it
on the world map as a major regional center
for shopping, work and entertainment. To
this effect, Solidere is coordinating with a
number of world renowned experts and
specialized establishments in the fields
of restaurants and cafs regarding outlets
in the Beirut Souks or elsewhere in the
city center.
The North Souks, currently under
development by Solidere, include a
department store, an entertainment center
and cinema complex. Design by Zaha Hadid
of the department store is proceeding in
coordination with Solidere teams and the
store operator. The excavations and
retaining wall started in April 2009 for the
entertainment center and cinema complex,
expected to be completed within two years
after obtaining the building permit.
Solidere is engaged in Beirut Waterfront
Development, in which it has a 50%
shareholding. In 2009, we have completed
the basement floors of the main building,
accommodating the yacht club, together
with furnished and serviced apartments,
and started construction of the ground and
above ground levels, after obtaining the
building permit. The project also includes
quayside restaurants and cafs along Beirut
Marina under the sea corniche level, with
their roofs at the level of and forming a
continuation to the corniche promenade.
The project is expected to be gradually
inaugurated starting the second half of
2010. Construction works on the under
corniche parking to serve this area are
already underway.
We are reviving our real estate
projects that had been put on hold
in 2006, starting with 178 Saifi
Village, a residential development
designed by Nabil Gholam. Other
projects are at different stages,
with new designs envisaged in light
of our new real estate strategy.
These are; Grand Thtre boutique
hotel in Bachoura; and, in Mina El
Hosn, a mixed retail, restaurant
and hotel project on lot 1338,
an extension of Beirut Souks
on Patriarch Hoyek Street; a
furnished apartment building
on lot 1408; and a high-end office tower to be
built to the highest international standards on
lot 1493.
In association with real estate, we are
launching a new activity: hospitality
management. Solidere is strengthening the
restaurant activity of the South Souks to
provide dining and entertainment for
shoppers and visitors. Our idea is to develop
the concept, looking at hospitality
management in all its aspects and extend it to
the entire city center. This is especially
important as Beirut may be able to benefit
from the regional clientele in spite of the
crisis, by remaining an attractive place for
tourists. Boutique hotels, restaurants and
cafs with special character are to re-create
the vibrancy of the early 2000's. The opening
of the Beirut Souks presents a good
opportunity to be more proactive in keeping
downtown buzzing. The program of activities
planned for their launching should be
followed by a sustainable level of events
throughout the year, both in and around the
Souks. The Grand Thtre is among the
projects that will strongly support this activity,
and become a renewed focal point of activity
that will bring more people into the city
center.
Outside Beirut, Solidere has leveraged its
brand name, unique expertise and tested
business model, by investing in, advising and
managing, urban projects in the Middle East
and the Mediterranean basin through Solidere
International, in which Solidere owns around
38% of the shares. In the last year, we have
earned significant income from our
participation in and services to the Solidere
International group.
The group itself also enjoys a high level of
liquidity, nearing a US$350 million level at
end 2008 with no debt. Thanks to Solideres
wisdom, it has been able to weather the
prevailing world economic crisis and adapt
its flexible development strategy to the
changed market circumstances.
Al Zorah project in Ajman (UAE) has close to
US$700 million in liquidity with no leverage,
allowing the company to carry on its
development activity without the need for any
debt. Development has effectively started
with the launching of infrastructure works,
expected to accelerate with the tendering of
the marine works in the second half of this
year. Project phasing has been amended
to take into account the new realities of the
real estate market in the wake of the current
economic situation.
Finally, Solideres retained profits as at end
2008 amount to US$272 million, consisting
of profits from its activities in Beirut and its
share of profits from affiliated companies
in the Solidere International group. In this
regard, our board of directors is
recommending to the annual general
meeting of shareholders to distribute from
distributable profits a dividend equivalent
to one US Dollar per share, as was done
in the two previous years.
Our share and GDR have maintained a
sustained market value in Beirut and London
stockmarkets respectively, in spite of
adverse regional and international market
conditions. The contagious effect that hit all
markets had a minor impact on the share
price, with downward pressures bringing it
down to the US$15 level. However, the
strong fundamentals of the Company and its
resilience, supported by a resilient Lebanese
11 economy, helped the share price gradually
improve to recently reach a level of US$24,
alhough the Net Asset Value calculation
consistently gives a higher valuation.
It is expected that all the above factors will
have a positive impact on the value of its
land in the city center and on the Solidere
share price, whose present market level is
below the true value of the Companys
assets and its ability to generate growing
profits due to its strong fundamentals.
To conclude, I am sure you must all be very
proud that throughout this and previous
financial turmoil, the reputation of Solidere
as a city maker and developer of integrity
and financial strength, has remained intact
and even grown in the eyes of our investors
and clients. More than ever I remain positive
that this will differentiate us.
Nasser Chammaa
Chairman and General Manager
June 5, 2009
Solidere Annual Report 2008

In reconstructing Beirut
city center, Solidere has
built on the intrinsic
qualities of this
exceptional geographic
and historic site and
greatly enhanced it
through sound urban
planning and design,
new infrastructure and
fine landscaped public
space, making it a
choice location for living
12 13 and working, as well as
a cultural, tourist,
leisure and shopping
destination.
Solidere Annual Report 2008
BEIRUT
CITY
CENTER
The fruit of an ambitious
urban regeneration venture
and waterfront development,
a fine city center has emerged
in Beirut, accommodating
a broad, sustainable mix of
facilities with a target floor
space of 4.69 million sq m
14
Beirut city center enjoys a prime location in
the heart of Lebanons capital. Sloping down
towards the waterfront, the site commands
fine views of the sea with a surrounding
landscape of mountains and hills. It is easily
accessible from all parts of Beirut, including
port and airport. Major roads converge on it
from its east, south and west, and line its
1.5 km seafront to the north.
Continuously inhabited for more
than 5,000 years, the site bears the marks
of eleven civilizations, ranging from the
Canaanite to the Ottoman. Beiruts maritime
and trading legacy dates back to the
Phoenicians. Its Roman law school was
the most prominent in the Empire. Its urban
character and architectural style were
formed during the Ottoman period and
the French mandate, when it became
the seat of public institutions.
Independent Lebanon grew into
a booming service economy, thanks to its
inherent assets, educated population and
liberal political and economic system. Beirut
was a lively, modern, cosmopolitan city,
its city center a focus for regional trade,
business, finance and tourism. Growth was
thwarted at the onset of hostilities in 1975.
With the return to peace and
stability, Lebanons economy re-emerged in
the 1990s, sustained by a national recovery
and development program. Massive public
investment was coupled with macro-
economic policies designed to stimulate
private local and foreign investment. While
Beirut city center benefited from this
favorable environment, its entire
regeneration is being achieved without
recourse to public funds. In 2005, the country
suffered a great loss with the assassination
of former prime minister Rafic Hariri.
Mr. Hariri was the godfather of national
recovery. To him were owed the vision and
inspiration for the rebirth of Beirut. In 2006,
the country suffered from war and invasion,
followed by political problems. The easing
of some local issues later led to a revival of
Beirut city center, as Solidere successfully
pursued its efforts to make it a sought-after
environment of the highest quality.
THE MASTER PLAN
Drawing on the sites natural assets and
rich heritage, the Master Plan is a carefully
formulated, detailed, coordinated and
phased action plan for the traditional city
center and its modern extension on the
waterfront.
The plan subdivides Beirut city
center into ten sectors, each with its own
character. Some are previous city
neighborhoods brought back to life; others
are defined by topography or by new
boundaries created in the urban fabric.
The plan involves the recovery of the public
domain, with the installation of a complete
infrastructure. It also provides an urban
design framework for restoration and new
construction.
The plan reflects the site
topography and natural features, protects
views of the sea and mountains and creates
public spaces, including gardens, squares,
belvederes, promenades and trails.
Recognizing the citys heritage, it also
unearths layers of its history. It preserves
surviving buildings and townscape features
and re-establishes the urban fabric and
neighborhood structures. It ensures the
harmonious integration of old and new,
combining tradition with innovation, control
with creativity in architectural expression.
With the prime objective of creating a vibrant
city center, it accommodates a broad mix
of land uses, business, public, residential,
hotel, leisure and cultural.
The project covers some 191 ha
(472 acres) of land: 118 ha (292 acres) as the
traditional city center and a 73-ha (180-acre)
extension reclaimed from the sea. Close to
98 ha (242 acres) will consist of public space,
of which 59 ha (146 acres) in roads and 39 ha
(96 acres) in landscaped open spaces.
Allocated for development are
93 ha (230 acres), including 22 ha (54 acres)
of retained, public or religious property.
Built-up area (BUA) guidelines are indicated
in the table below.
FLOOR SPACE SQ M % Ongoing real estate development
Residential 2,335,000 49.8
Offices 1,300,000 27.7
Mixed-use 400,000 8.5
Hotels 295,000 6.3
Government / Cultural 178,000 3.8
Retail 150,000 3.2
Religious 32,000 0.7
Maximum Total 4,690,000 100.0
Phase One, completed projects: traditional city center
infrastructure, original landfill treatment; detailed sector
planning; landscaping and private underground parking design
the original landfill; detailed sector planning
and execution; historic core; banking district, Starco and
Lazariya commercial centers; northern Wadi Abou Jamil,
Zokak El Blatt and Saifi neighborhoods redevelopment;
Beirut Souks design and underground construction.
Phase Two, completed projects: the New Waterfront District
land reclamation, and master planning; infrastructure and
landscaping design and implementation; developing the
eastern marina. Other developments include the South and
underground construction.
North Souks, Beirut Waterfront Development, Marina Towers,
Beirut Tower, Platinum Tower and projects on the Martyrs
Square Axis.
the waterside city park.
advances in land treatment and reclamation.
15
Phase One 1994 2004 This phase saw
the completion of: infrastructure in the
traditional city center and the treated part of
of existing and new development areas;
landscaping and private underground
parking design and execution; historic core
restoration; renovation of the banking
district, Starco and Lazariya commercial
centers; northern Wadi Abou Jamil,
Zokak El Blatt and Saifi neighborhoods
redevelopment; Beirut Souks design and
New construction included
Solideres UN House, Saifi Village, embassy
compound, Rue de France multiuse
complex; Bank Audi, Medgulf and Bankers
Association headquarters, Monroe hotel,
Al-Bourj and Atrium office buildings, the
Consulting Clinics, Block 24 and Park View
Realty residential buildings.
Still ongoing real estate projects
involved predominantly residential clusters
in Saifi and Wadi Abou Jamil, residential
and hotel towers facing Beirut Marina and
Completed on the waterfront
were: marine works, defense structure, sea
promenades and Beirut Marina; with major
Phase Two 2005 2030 Phase Two will
complete the urban fabric in the traditional
city center by developing Beirut Souks,
finalizing Saifi and Wadi Abou Jamil urban
villages and establishing prime new areas in
the Serail corridor, Hotel District, Ghalghoul
sector and Martyrs Square Axis. Its focus on
high-density zones will intensify the thrust
towards making Beirut city center a favored
location to global businesses, financial and
other specialized services and institutions, as
well as a prime residential area, tourist
destination and cultural hub.
In the New Waterfront District,
this phase has seen the completion of land
reclamation. It also involves finalizing master
planning; infrastructure and landscaping
design and implementation; developing the
eastern marina; coordinating with the port
authority over the development of the first
basin; and launching real estate projects
with a distinct architectural style.
includes the South and North Souks; Beirut
Waterfront Development and projects on the
Martyrs Square Axis; The Landmark and
other gateway towers on the southern edge
of the city center; northeast gateway towers
marking the point where the coastal highway
terminates in the city center. Completed
projects include the South Souks, Marina
Towers, Beirut Tower, Platinum Tower
and other.
SOLIDERE
Solidere was initially capitalized with
US$1.82 billion: US$1.17 billion as
contributions in kind of property right
holders, and US$650 million as cash
subscriptions following an oversubscribed
initial offering. After the retirement in 1997
of 17,000,129 shares representing
recuperated properties, its capital now
stands at US$1.65 billion.
Solideres duration was extended
by decree 13909 of 2005 from 25 to 35 years,
starting from May 10, 1994, the date of its
registration at the Commercial Register.
The Company has established
a solid base for central Beirut prosperity
through high value-added land development
action, competitive real estate projects and
property management services. Real estate
projects are implemented directly, in joint
venture with partners, and through or in
liaison with other developers. Solidere offers
developers services ranging from real estate
and architectural concepts to complete
development packages.
As supervisory body and lead
developer, the Company controls the pace,
components and quality of development.
Solidere outsources construction to focus
on its core competencies: managing real
estate project development, marketing
development land, marketing and servicing
rental properties. The Company provides
management and operation services to
public utilities, infrastructure, marinas, car
parks and landscaped open areas.
In 2007, after amending its
bylaws, Solidere expanded the scope of its
activities beyond Beirut city center. The
Company established for that purpose
Solidere International Limited, which was
incorporated in DIFC, Dubai. Several urban
and waterfront projects were identified in the
Middle East and around the Mediterranean
Basin, and subsidiary companies were
established for their development. Services
provided in 2008 to Solidere International, its
projects and subsidiaries include: master
planning, urban design, infrastructure,
landscaping and real estate design; project
development; legal and corporate
structuring; financial engineering;
implementation; marketing and sales.
Solidere Annual Report 2008
EXISTING
CITY
CENTER
In reconstructing Beirut city
center, Solidere has built on
the intrinsic qualities of this
exceptional geographic and
historic site and greatly
enhanced it through sound
urban planning and design,
new infrastructure and fine
landscaped public space,
making it a choice location
for living and working, as well
as a cultural, tourist, leisure
and shopping destination
16
Solidere prepares development sites for
investors wishing to develop real estate
properties in central Beirut. Its activities in
this respect involve town planning, parceling
and urban management, site preparation,
archeological investigation, implementation
of infrastructure, landscaping, hardscaping
and street furniture. The reconstitution of
the public domain and the laying of
infrastructure and utility networks,
completed in the existing city center,
will extend to the New Waterfront District.
As per its agreement with the Council for
Development and Reconstruction (CDR),
ratified in Decree 5665 of 1994, Solidere
implements these works on behalf of
the State in return for an allocation
of 29 ha of development land in the
New Waterfront District.
MASTER PLANNING
The initial Master Plan was amended several
times in the light of more detailed urban
studies and sector plans. The latest Master
Plan updates regarding the existing city
center were issued in Council of Ministers
decrees in 2006.
The Master Plan regulates and
controls project developments through
policies and general regulations aiming
at achieving the main objectives of the
development and reconstruction of the city
center. Several amendments to the Master
Plan were approved in the past years, to
respond to more detailed urban and traffic
studies, new archeological discoveries,
necessities related to the distribution of
areas between public domain and private
sector, and other reasons related to specific
developments and to land swaps between
the State and Solidere.
Another amendment to the
Master Plan awaits Council of Ministers'
approval after being approved by the
Municipal Council and the Higher Council for
Urbanism in 2007. This amendment clarifies
and confirms the interpretation of several
issues mentioned in the earlier amendments
and approved in decree 5714 of 2001, in the
light of the new National Building Code of
2005, the progress of works and other
archeological issues.
Still outstanding are
amendments to decree 5714 of 2001
17
proposed by Solidere to resolve
contradictions between the Master Plan
general regulations and the Building Code
of 2005, issues relating to archeology and
relationship to the Directorate General of
Antiquities (DGA), and some property swaps
with the State that have not been finalized to
this date.
INFRASTRUCTURE
Solidere has completed and delivered to the
State most of the main works relating to
infrastructure and roads in the existing city
center. The Company is pursuing studies and
implementation for secondary infrastructure,
public space and gardens along with the
progress of real estate development in
various city center areas.
Beirut city center has a 3.6-km
ring road, 8.4 km of primary roads, 16.6 km
of secondary, tertiary and pedestrian streets.
Expansions to the prewar grid accommodate
traffic and facilitate land parceling for real
estate development. Three major axes form
the ring road system: George Haddad Street
to the east; the widened Fakhreddine Street
to the west; Fouad Chehab Avenue to the
south, with a bridge doubled in capacity and
new interchange and underpasses providing
fast access to airport, port, east, west and Public lighting was installed throughout,
central Beirut. Avenues cut across the city
center from north to south. Park Avenue
with necessary meters, low-voltage cabling,
lighting fixtures and feeder pillars. Tunnels
links the traditional city center to the Hotel were equipped with lighting, and provided
and Waterfront districts. New local streets
were created in Wadi Abou Jamil. The
with stand-by generators, control and safety
systems. Civil works were implemented for
Martyrs Square Axis links Damascus road telecommunications networks, with duct
to three major east-west boulevards:
Weygand, Zeitouneh and Port streets, the
banks for low current networks, cable TV
and telephone services.
latter widened and extended towards Trieste
Street. With its western segment operational
and connecting directly to the citywide
corniche system, the city center corniche is
to skirt the New Waterfront District alongside
BROADBAND NETWORK
a broad, terraced, pedestrian esplanade.
Solidere obtained in 1998 a build-and-
Among the Master Plan
operate license for broadband distribution of
amendments of 2006 are two major road
improvements. One is the road linking the
a converged IP network including high speed
internet, internet protocol TV (IPTV), video on
north of Martyrs Square to Trieste Street.
demand, video conferencing, data center
Michel Macary (France), in coordination with
Dar Al-Handasah and Solidere, completed
facilities and virtual private networking (VPN)
for corporate clients. The Company signed in
the concept design for the crossing from
2006 an agreement with Orange, a member
Byblos Street, which includes bridging part
of the ancient Tell area in order to preserve
of the France Tlcom group, for the
building and operation of a fully IP network,
archeology. The other is an improvement of
using advanced telecom technology based on
the George Haddad - Fouad Chehab junction,
a fiber-optic backbone with dual connection
creating grade separation at the intersection.
The two projects, including the tunnel
to each building in Beirut city center.
Solidere Broadband Network deployment
design, await CDR committing funds for the
was completed by end March 2007, allowing
project and entrusting Solidere with its
the provision of services to start in
implementation.
September 2007.
Created by Solidere, Bechara
Solidere, under its unified
Al Mouhandess is a pedestrian street east
communication network, is now able to
of Maarad, along restaurants and cafs
provide data (internet) and video (TV),
which use half of its six-meter width for
outside seating. Solidere also completed its
operated and monitored from the network
operation center (NOC) that is hosting its
continuation to Amir Assaf mosque and
data center, call center (IPCC) and other
along the St George Greek-Orthodox and
equipment and servers for the different
St Elie Greek-Catholic cathedrals. The whole
services. Beirut city center is thus being
promenade overlooks Hadiqat As-Samah.
transformed into a 24-hour IT zone capable
The city center water supply
of attracting multinational companies and
network consists of 30 km for drinking water
other residents who will benefit from the
and 38 km for irrigation. The water disposal
provision of multimedia and broadband
system comprises a sewage pumping
communication services.
station, 28-km sewage piping and 26-km
In addition to the internet and
storm water drainage.
VPN services provided at the completion of
Solidere implemented civil works,
the network, Solidere Broadband Network
including culverts, relating to power supply,
launched in March 2008 its IPTV service for
and installed the 66 and 220 KV power
Beirut city center residents. This pioneer
cables, a 220 KV link between the Beirut pine
project in the area offers greater value to
forest station and the city center, and a
customers by providing seamless delivery
240 MW substation transforming high-
of high-quality video, the most promising
tension power transmitted by Electricit du
avenues for value-added services. Data
Liban into medium voltage; local
center deployment was completed and the
transformers in turn convert it to low voltage
delivery of web hosting, application hosting,
electricity for domestic use. Most areas of
exchange, storage and back-up services is
the existing city center were equipped with
soon to start.
duct banks for its medium voltage cables,
with work proceeding in Bachoura and to
follow in north Saifi.
Solidere Annual Report 2008

enclosures and advertising billboards. As a

HARDSCAPING AND STREET
pilot project, Beyhum Street was equipped
FURNITURE
with new benches, bollards and waste bins,
with street furniture to be gradually enovated
Hardscaping and street furniture were everywhere else according to the new
upgraded at Solideres expense beyond designs. The signage manual prepared by
the agreement with the State. Street and Solidere received Municipality of Beirut
sidewalk paving, as well as streetlights, were approval. Street name plates were erected in
designed to complement the character of the conservation area and Saifi. Pedestrian
each sector. Sidewalks were upgraded from way-finding signage, 65 panels in total, was
concrete to granite tiles and kerbs. installed in all areas. Advertising billboards
Solidere undertook the integrated for the public domain were delivered to the
18 design of street furniture, signage and public Municipality, which leases them out for
area lighting, and commissioned public art operation. Solidere installed large
for the city center. Plaques with new postal advertising billboards on private property.
codes were installed on completed buildings.
Development controls were generated in a
public domain master plan established with
the help of Jean-Michel Wilmotte (France)
and Ziad Akl. Street furniture based on the
new designs includes street name signage in
stainless steel, benches, telephone booths,
street kiosks, bus shelters, caf seating

top corner of Abdallah Beyhum and Tijara streets

opposite top Abdallah Beyhum Street
opposite bottom corner of Abdel Malak
and Abdallah Beyhum streets
Solidere Annual Report 2008
PARKING FACLITIES
Among underground public parking facilities
provided by Solidere, the Beirut Souks car
park will have a final capacity of 2,900 spaces,
excluding additional parking planned under
Khan Antoun Bey Square in the North Souks
with a capacity of 400 spaces.
Serving the Foch-Allenby area,
are the four-level Weygand Street car park,
providing 108 spaces topped by a garden,
and the 320-space Solidere car park below
Harbor Square on block 93.
Two car parks under public
property in Martyrs Square and near the
Grand Serail, initially tendered out as BOT
projects by the Council for Development and
Reconstruction (CDR), based on designs by
CDRs consultant Dar Al-Handasah (DAR),
have not yet been implemented. The winning
team of the Martyrs Square axis
international urban design competition
integrated a concept design for the
underground parking structure within the
landscape scheme for the square. Requested
ajustments of DARs original design to meet
the Greak team scheme requirements,
include incorporating the Petit Srail
remains into the design and preserving them
from the parking entrance. Solidere
submitted the Greek teams plans to CDR for
re-launching the project on a BOT basis.
20
opposite corner of Abdel Malak
and Moutrane streets
The Council of Ministers had instructed CDR Since 2006, the Municipality has been
in 2005 to undertake the design and subcontracting the operation and
construction of the Riad El Solh underground maintenance of handed over works, under
car park, also under public property, in Solideres supervision. The storm water
coordination with Solidere. The Landmark network is maintained by the Municipality,
project developer is offering to execute the with Solidere doing quality control on
car park in a BOT basis in coordination with the work done by the contractors and
the Beirut Municipality. subcontractors. Solidere intervenes in
Pending completion of sufficient resolving sewage pumping station problems
space underground, several vacant lots in the case of emergencies, and will continue
assigned for temporary surface parking to do so until such time the Beirut
provide up to 4,800 car spaces servicing up Administration (Mohafazat) assigns an
to 11,000 customers per day, including operation and maintenance team of its own.
regular subscribers representing tenants Solidere continually upgrades its
and residents of the city center. They include site logistics services: cleaning, pest control,
three car parks in the eastern section of the safety, security and traffic management.
New Waterfront District with a free shuttle In a city center image improvement program,
service to the existing city center. undertaken in collaboration with
With surface parking gradually participating property owners and users,
moving to new locations to make room for Solidere is implementing the following
development in the existing city center, services, to supplement those provided
additional space will be provided in the New by the Municipality: surveillance security;
Waterfront District. door-to-door waste collection; street and
sidewalk washing and street furniture
cleaning; pest control; maintenance of
open spaces, trees and planters; and
OPERATION AND MAINTENANCE street decorations during holidays.
Solidere is installing a traffic
control system that, in addition to phasing
Solidere operates and maintains the
traffic lights, monitors drivers violating speed
completed infrastructure and reconstituted
limits. Control panels and cameras have
public domain until their delivery to the
been installed at two intersections so far,
State. These services cover tunnels and
with others to follow.
underpasses, roads and sidewalks; street
The Company is also installing a
furniture, traffic lights and street lighting;
CCTV surveillance system to cover all
utility ducts and manholes, sewage pumping
sectors in the city center. The first and
station and network, storm water networks;
second phases of the system, covering Foch-
irrigation station and network, trees and
Allenby, Saifi, Zokak El Blatt, Bachoura, Wadi
landscaped open spaces.
Abou Jamil, Beirut Souks and Beirut Marina
As per Law 117 of 1991 and the
areas, have been completed. A new ANPR
agreement with the State, ratified in decree
system (automatic number plate recognition
5665 of 1994, infrastructure and the public
system) is under study for all access points
domain are to be delivered upon completion to
in and out of Beirut city center.
CDR, representing the State. All the works
have been delivered to the public authorities.
They include infrastructure networks, roads,
tunnels, sidewalks, street furniture, signage
and lighting. Electricity networks were
delivered everywhere except for north Saifi,
Bachoura and Trablous Street. However,
Solidere remains in charge of the irrigation
network, street trees and open spaces.
Solidere documents damages
occurring in Beirut city center, including those
due to car accidents or vandalism acts. The
Company sends reports to the Municipality to
that effect, with lists of needed repairs,
mentioning whether the damages result from
accidents or from wear and tear and offering
to execute repairs at cost.
Solidere Annual Report 2008
LANDSCAPING
With green public space covering 39 ha of
land, the city center, representing 10% of
municipal Beirut, will contain half of the
capitals green areas. Solidere has been
vindicated in its quest for quality and unique
integration of public domain design
accompanied by public art.
Fine public spaces have exerted
a significant impact on development land
22 sales. Encouraged by the Mediterranean
climate and lifestyle, caf society and social
promenading within public spaces has
also made the city center a most active
destination for Beirutis as well as for visitors
from the rest of the country, from the entire
Arab region and the wider world.
The public domain is designed to
comprise 60 parks, gardens, squares,
pedestrian areas, quaysides and seafront
promenades, the most important of which is
the waterside city park; as well as
pedestrianized areas and streets lined with
trees or incorporating planters or wide
medians landscaped with trees, shrubs and
colorful plants.
Among completed spaces: Gibran Khalil
Gibran, garden facing UN House, Riad
El Solh Square and Debbas Square, all
designed by Mohamad Halawi; Roman Baths
garden and public space, and the landscaped
space along the CDR stairs, both designed by
InterScne, France, with Maurice Bonfils;
Fouad Chehab gardens overlooking the city,
by Didier Drummond, France; Wadi Abou
Jamil Square by Thibaud Urbanisme et
Paysage, France, (TUP) and Rafik Khoury
and Partners.
Adjoining public and religious
buildings are landscaped spaces in Nejmeh
Square; three gardens designed by
Mohamad Halawi, between the Evangelical
church and National Music Conservatoire,
facing the Municipality, and cascading under
the Grand Serail with at street level Omar
Onsi garden by Semaan Kfoury; near St Elie
church in Wadi Abou Jamil by TUP. Saifi
Square by Ilya Stevenson Consultants, and
Omar Daouk Square by Mohamad Halawi,
provide other landscaped areas, to which are
added private-access spaces in Saifi, Zokak
El Blatt and Mina El Hosn. Samir Kassir
Square on Weygand Street, featuring a Louis
Debr sculpture, was designed by Vladimir
Djurovic Landscape Architecture. The latter
upgraded Amir Amin Square in Bachoura,
with Salwa Rawda sculptures, by adding a
water feature.
Works in progress addressing
neglect and/or damages suffered during
the 2006-2007 sit-in, include: redesigning
of Debbas Square by Landscape Ltd;
restoration of Gibran Khalil Gibran garden,
and upgrading the Roman Baths public
space to enhance it as a performance venue.
top Wadi Abou Jamil Square, Wadi Abou Jamil Street
Thibaud Urbanisme et Paysage and Rafik Khoury and Partners
left Samir Kassir garden, Weygand Street, Vladimir Djurovic Landscape Architecture
opposite master plan showing landscaped areas in Beirut city center

25
In Wadi Abou Jamil, block 65 adjoining Royal
Hotel and Resorts is under design by the
developer and will shortly go to tender. Bab
Idriss Square was designed by Olivier Vidal,
France, space planner of Beirut Souks. As
site of the ancient arcaded street that led to
the Roman Hippodrome, the square will
incorporate about 15 basalt stone sculptures
by Xavier Corbero, Spain, evoking figures on
their way to the race course.
Works in other areas include
commissioning of an artist for a concept for
the sculpture in the Rafic Hariri garden
designed by Vladimir Djurovic Landscape
Architecture. Interrupted earlier by
inaccessibility to the site due to the political
situation at the time, construction was
resumed by Target, and completed in April
2009. The upgrading of Nejmeh Square and
of the CDR open space on the Serail hill, for
which concept designs were respectively
submitted by Vladimir Djurovic and Frdric
Francis, are on hold.
top Castle Square and Belvedere Park, Dabbagha Mosque Street,
Machado and Silvetti Associates
opposite Rafic Hariri Memorial Plaza, Martyrs Square, HAR Etudes
The design offered by Vladimir Djurovic for
the Gebran Tuni memorial garden along
Weygand Street, was revised to make room
for a public transport drop-off and provide
access to Le Gray hotel. Awaiting CDR
approval, implementation should start in
May 2009 and be completed by year end.
Design of the Rafic Hariri memorial plaza
along Martyrs' Square by HAR Etudes,
France, with Oger Liban, obtained Solidere
approval and was submitted to the Beirut
Municipality. The permit is expected to be
issued by mid 2009.
Solidere dedicated a 2.3-ha site,
on which it relinquished its development
rights, to create Hadiqat As-Samah (Garden
of Forgiveness). On an archeological site
overlooked by several places of worship, the
design by Gustafson-Porter, US-UK, evokes
Beirut's numerous historical layers and
Lebanon's varied landscape.
Solidere has completed all
streets and passages around the garden,
between Al Amin mosque and St George
Maronite cathedral, between St George
Greek-Orthodox and St Elie Greek-Catholic
cathedrals, leading to Amir Assaf mosque,
the western terrace wall on Bechara
Al Mouhandess and the belvedere south of
St George Maronite cathedral.
Gustafson-Porter also completed
the concept design of the garden on
municipal land adjoining St Elie Greek-
Catholic cathedral. The project is to be
presented for Municipality approval before
proceeding further with the design.
The winning Greek team presentation for the
Martyrs Square Axis competition included a
concept design for the square landscaping.
The design will evolve in coordination with
Solidere and Beirut Gate, developer of six
lots on the southern section of the axis. The
consultant completed the preliminary design
of the square, together with the concept
design of the underlying car park, and is
about to proceed with the squares detailed
design. To improve the initial design,
Solidere approached Xavier Corbero to
propose, in coordination with the Greek
team, an artistic treatment of the car park
ventilation shafts, comprising a tall sculpture
south of the square and a number of small
sculptures along the Martyrs Square Axis.
Gustafson-Porter designed the
Old Shoreline Walk, a sequence of connected
spaces representing the submerged old
shoreline. All Saints Square, Shoreline
gardens (blocks 11 and 25), Zeitouneh
Square and Santiyeh gardens, in Sectors B,
C and E (Hotel District, Serail corridor and
Souks District), are the main components of
the first phase of this project. A later phase,
starting with Jean-Paul II Square, will
prolong this walk into the Ottoman Wall walk
in Sector D (New Waterfront District).
The bid for Zeitouneh Square was launched
in 2008 and execution by Target started in
April 2009. Tender packages for
All Saints Square, Shoreline gardens,
Santiyeh promenade and garden were
received by mid April 2009. The preliminary
design for the Santiyeh promenade was
approved by Solidere and by the concerned
religious authority. Tender packages were
submitted to Solidere at end April 2009.
Following contract award, construction
works should take from 18 months to
2 years.
Gustafson-Porter also worked on
the concept design for the hotel district
corridor landscaping, the culmination of a
series of south-to-north open spaces serving
as view corridors, including the elevated
Mina El Hosn Square. The part of the square
falling between the block 17 eastern and
western plots, designed by Djurovic, is under
construction.
Machado and Silvetti Associates
(US) finalized in 2005 the design of Castle
Square on block 94. The design integrates
a promontory wall at the citadel level, with
pedestrian passages offering fine views of
the square and of the port first basin.
Solidere completed in 2006 the consolidation
and restoration of the citadel. Tender
documents were submitted to Solidere by
end April 2009.
Following Directorate General of
Archeology (DGA) approval of the concept
design, detailed design is progressing for the
adjacent Belvedere Park on block 95 which
overlooks the ancient Tell and includes a
garden with historic remains.
The preliminary design for
Harbor Square, located on block 93 over
part of the ancient harbor, was completed
by Gustafson-Porter in July 2007. The
detailed design was completed by mid 2008,
includes part of the reconstructed ancient
harbor wall, water features, extensive
pergola shading and caf seating. Tender
documents were submitted to Solidere by
end April 2009.
In the existing city center,
landscaping work planned for the future
includes: design completion and
implementation of the Belvedere designed by
Machado and Silvetti Associates on block 94;
the next stage of the Martyrs Square design,
with landscaping by the Greek team of the
northern part of the Martyrs Square Axis.
 Solidere Annual Report 2008

Once the Trail is extended, signs will direct

HERITAGE TRAIL
visitors toward the ancient Tell site and a
O F .
W A F sub-trail to Castle Square, still under
I C
S I N
N O Work re-started on the Heritage Trail construction, and to Belvedere Park, where
A V E
N U E pedestrian circuit, with revised designs significant archeological remains have been
AHMAD SHAWKI ST

M I R
M A J of the circuit, trail medallion, signage, preserved. Close by is the location of the
I D
A R S
L A N information panels and tourist map of future City History Museum and the
A V E
N U E archeological sites and historic buildings. historically significant Martyrs Square area,

T
An approximately two-kilometer-length considered as the grand access to the city

S
winding passage through the city center, center, and its historical and cultural heart.
S T
D A O U K
E the Trail offers many stops of interest. The Trail will continue along
W.KOR TAS ST

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Signage in three languages will explain Weygand Street to the restored Al Omari
U

36 each area and surrounding buildings of mosque, where excavation work has revealed

E
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significance. that the existing structure was built on the

Y
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H
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retain the ancient street grid and Ottoman century earthquake. From there, it goes to
ST

access gates, and incorporate several Nejmeh Square which houses parliament,
ST

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restored Mamluk Zawiyat Ibn Iraq and Greek-Catholic cathedrals, the Nouriya
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34 38 I
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Solidere Annual Report 2008
ARCHEOLOGY
Extensive archeological excavation and
research of sites throughout the city center
03
has yielded evidence on civilizations
spanning 5,000 years. Solidere has
01
supported the rescuing and preservation of
02
04 this heritage, financed the teams working
under the supervision of the Directorate
08
07 05
General of Antiquities (DGA).
06
Research proceeded in 2008 on
six archeological sites in public spaces,
development lots or built lots under
restoration. The documentation, digitizing
and evaluation of the results provide data for
a new synthesis of Beiruts urban history.
New discoveries have confirmed
the location of Roman Beiruts major
porticoed streets. Excavations in the Wadi
Abou Jamil area yielded vestiges of the
ancient Hippodrome where chariot races
took place, and the large club buildings used
by participants in the races. The club
buildings were situated north of the track,
while the seats were situated to the south,
built on stepped platforms cut out of the
Serail hill rock. The archeologists have
uncovered six large rooms with their
individual heating system and a pool in the
club building. In the fill of the club building
28
01 MEDIEVAL MOAT 02 PHOENICO-PERSIAN QUARTER 03 OLD SEASHORE OTTOMAN WALL
04 ANCIENT TELL, CANAANITE GATE AND PHOENICIAN GLACIS 05 PETIT SERAIL 06 HADIQAT
AS-SAMAH 07 ROMAN BATHS 08 ROMAN HYPPODROME
the archeologists found several lead chariot
models, clear evidence for the function of
the complex as a horse-track. Subject to
agreement with the DGA, these artifacts
are to be incorporated within Wadi Abou
Jamil Square.
Solidere continues the integration
of archeological sites within the city fabric.
Elements of the ancient harbor walls are to
be incorporated in Khan Antoun Bey Square
and in Harbor Square on block 93. The
landscaping of Castle Square in block 94 has
started with the conservation of ruins
containing major elements of the local
geological and urban memories. A second
phase of this project, Belvedere Park, is now
in design. The main focus remains Hadiqat
As-Samah and the Heritage Trail. A City
History museum near the ancient Tell, to be
the starting and ending point of the Trail, will
bring to life Beiruts 5,000-year heritage and
celebrate major Beirut finds.
Articles by archeologists of the
fourteen teams that worked in Beirut city
center continue to be published in scientific
journals, and a number of young Lebanese
and foreign archeologists have completed
their dissertations attempting to synthesize
part of Beiruts history.
top Roman Baths archeological site
opposite top archeological sites in Beirut city center
opposite bottom ancient Tell archeological site
Solidere Annual Report 2008
NEW
WATERFRONT
DISTRICT
The New Waterfront District is taking
shape as Solidere proceeds with its master
planning and land development, with a view
to delivering the sites to investors by 2011.
The district has already elicited strong
investor interest, and land sales totaling to
date 198,735 sq m BUA herald its real estate
development planned to reach an aggregate
1.7 million sq m BUA.
32
Destined to be a prime, active, multiuse
district with extensive green areas and
distinctive architecture, the New Waterfront
District commands fine views of the sea, with
hills and mountains across the bay to the
northeast. As an urban destination, the
district comprises the termination and
climax of Beiruts citywide seaside drive, the
corniche. When completed, it will contain a
city waterside park, two marinas, quayside
promenades and 29 ha of development land.
Altogether some 73 ha of
reclaimed land are enclosed within a
terraced sea defense system designed to
withstand centennial storms. Its unique
caisson structure is limited in height to
5.5 m above sea level to protect sea views
from deep within the citys historic core. The
sea defenses provide harbor enclosures for
the two marinas.
Beirut Marina is edged by a
public town quay, designed to house
waterside restaurants and shops, alongside
a yacht club and apartments. A pedestrian
bridge will link it to the Hotel District.
Providing an uninterrupted 3.5-km extension
of the Beirut shoreline, the marina, harbor
quaysides and corniche promenades will
provide more than four times the area of
seafront public space currently available
in the Beirut peninsula.
MASTER PLANNING
The New Waterfront District consists of
Sectors A and D. Sector A comprises the
waterside park, corniche, land, quays and
breakwater around Beirut Marina. Sector D
comprises the development blocks and
public domain extending north of the Souks
District to reach the corniche promenade,
and east of the waterside park, to reach the
Beirut port first basin and the planned
eastern marina. In response to investors
early declarations of interest, Solidere has
engaged since 2001 in a serious planning
exercise for Sectors A and D, continually
improving this planning and seeking approval
from the public authorities for its proposals
regarding the district, together with related
general and special regulations of the BCD
Master Plan.
The current Waterfront District
master plan, ratified in Council of Ministers
decree 15803 of 2005, was based on the 2001
planning study by a consortium of US firms:
Skidmore Owings & Merrill (SOM) for urban
design, Sasaki for landscaping and Parsons
Brinckerhoff for transport planning.
The plan aims at turning the new
waterfront into the destination and climax of
Beiruts citywide corniche. Upon completion
of the Beirut Marina town quays, corniche
promenade, eastern marina quayside and
Beirut port first basin promenade, the city
center will provide an uninterrupted
extension of the Beirut shoreline. The
terraced corniche promenade, over 1.3-km
(0.8-mile) long, with a width varying between
45 and 110 m, will be a socially active
pedestrian arena, with views to the sea,
Jounieh bay and Mount Sannine.
The road network was designed to
accommodate an urban Formula One Grand
Prix circuit. This received FIAs preliminary
technical approval in 2002. The track is to
run clockwise along 4.8 km with the starting
grid on the coastal corniche. Where
necessary, particularly at bends and
chicanes and over-runs, construction works
are to dismantle sidewalks, widen
carriageways and install safety barriers and
debris fences prior to the race event. On the
40-m wide upper corniche promenade and
elsewhere around the circuit, temporary
stands are to be installed to accommodate
spectators.
In Sector A, leisure, sporting and
tourist activities predominate. Decree 15803
of 2005 lists an outdoor amphitheater in
the waterside park; infrastructure and
installations for Formula One racing;
buildings for the yacht club and related
services, hotels, tourism, exhibition centers,
sports courts, restaurants and cafs. The
Beirut Marina yacht club building was
subject to a maximum height of 11 m above
corniche level. This stipulation was amended
in Council of Ministers decree 16546 of
March 9, 2006, which increased the yacht
club maximum height to 13 m. No
permanent construction is allowed on the
marina quays and breakwater, apart from
infrastructure or buildings relating to port
management, such as customs, immigration,
petrol station or car parks. Restaurants and
shops built as temporary structures along
33 the town quay are not to exceed the height
of the corniche promenade above.
Planned as an exemplar of modern
development, Sector D is a multiuse district
with a wide range of commerce and retail
services, office, tourist and hotel space,
convention centers, exhibition and cultural
facilities, together with extensive residential
development. It also includes a major part
of the Formula One track. The provisions
relating to development on Beirut Marina are
also applicable on the eastern marina.
Development lots should have the
following specified minimum areas: 750 sq m
subject to encompassing an 18 x 18 m
square, in sub-sectors Da, Dc and Dd;
1,500 sq m subject to encompassing a
25 x 25 m square, in sub-sectors Db and De.
Two streetwall controls are applied and view
corridors are created to preserve sea and
mountain views. SW5 requires a 3 m setback
at the 36 m height. SW6 is similar to SW5
with the additional requirement of a 5.5-m
high arcade on the street frontage. Building
heights and envelope controls ensure a
careful distribution of floor space. The
majority of development is at medium
density (40 or 52 m height), with a limited
number of high-rise sites (90, 120 and
160 m height) planned in distinctive locations
and landmark buildings framing spectacular
views to the sea and mountains. The road
widening and addition of new roads in the
sector plan result in larger areas dedicated
to public domain. The total built-up area
remains unchanged, with no increase in
development areas allocated to Solidere.
Solidere Annual Report 2008
SOLIDERE MASTER PLAN
AMENDMENT
In 2005, Solidere commissioned urban
design consultant Ian Hogan to undertake a
planning exercise for the New Waterfront
District leading to a Master Plan
amendment. An intense interest was
perceived on the part of investors, who were
pressing Solidere to buy lots in the district.
The Solidere proposal resulting from this
planning exercise addresses its concern
about Beirut being turned exclusively into a
resort and residential center. Solidere is
keen to encourage the development of a
comprehensive mixed-use New Waterfront
District. This also falls within the Companys
strategy to market and reposition Beirut, as
an international business center, based on
the citys lifestyle assets, skilled human
resources, Mediterranean climate, and the
multiple benefits of a modern, well-planned
mixed-use city center with extensive
provision of amenities and services. Beiruts
competitive edge lies in the qualities of its
people and services.
Discussion is proceeding with the
government on providing special business
incentives within a defined area of the New
Waterfront District. Consistent with
Solideres mixed-use philosophy, the
incentives are planned to apply not only to
offices, but also to all supporting uses,
including conference facilities, hotels,
34 serviced apartments, retail and other
services located within the special purpose
district. Employment generation and other
effects are expected to have a signicant
impact on the economy. At full build-out, the
special business district is planned to create
some 40,000 new jobs.
The Master Plan amendment for
the New Waterfront District (sectors A and
D) proposed by Solidere was approved by the
Higher Council for Urbanism in January 2007
and sent to the Municipality and the Council
for Reconstruction and Development.
However, it is still awaiting Government
ratification, to be issued in a Council of
Ministers decree.
During preparation of the Master
Plan amendment, Solidere sought the advice
of local real estate consultants Ramco on
the new development strategy incorporated
within the Master Plan, specifically on the
creation within sector D of a special purpose
business district. A form of Free Zone with
an incentive package, similar to DIFC Dubai,
was discussed with the Ministry of Finance.
Ramco supported Solideres proposition that
Beirut city center is the best location for high
end office use and that Solidere is best
positioned to create such a new market in
Beirut. Beirut and the city center enjoy
benefits of a Mediterranean climate and the
combined assets of high quality, multi-
lingual human resources, good schools,
universities, hospitals and residential
offerings within an overall high-quality,
mixed-use environment.
The transfer of 110,000 sq m BUA
from the existing city center to the New
Waterfront District leaving the total BCD
built-up area unchanged, falls in line with
existing BCD general regulations, that allow
the transfer of up to 10% of each sector's
BUA to another sector. The transfer was
translated into an increase in volumes,
heights and density, necessitating
infrastructure design to fit with the new
design, with some changes in the capacity
of the road network.
The amended Master Plan
creates two poles, focused on two groups
of towers that constitute very dramatic
landmarks, within a perimeter of buildings
conforming to the previous Master Plans
streetwall vocabulary as well as new skywall
controls that condition the profiles of towers
within the clusters.
The pedestrian connectivity within
the Master Plan amendment forms a
branching spine, which starts from Beirut
Souks through a footbridge and continues
north towards the sea. A special business
district, planned to comprise a group of
towers with heights ranging from 140 to
220 m, is created on either side of this
central boulevard and around its new central
square. Within the spine, the street is to be
widened to accommodate a new public
transport right-of-way. A new avenue,
parallel to the central boulevard and to
its east, features arcades providing an
architectural link with the existing Maarad-
Allenby axis.
A second, easterly cluster of
higher towers, centered on views towards
Mount Sannine and from Martyrs Square to
the sea, is expected to be mainly residential,
with hotel, serviced apartments, supporting
retail and office use. The design of the
cluster is carefully controlled to enhance
the northerly view of the Mediterranean
terminating the Martyrs Square Axis and
the easterly view of Mount Sannine across
St Georges Bay, with towers leaving space
between them to offer glimpses of the sea
and mountain.
The proposed BUA transfer to the
New Waterfront District is equivalent to the
areas lost on the Martyrs Square Axis, in
sector H, as well as in Wadi Abou Jamil, Saifi
Village and Zokak El Blatt. The principle of
BUA transfer between the various sectors is
recognized in the BCD Master Plan and
detailed regulations.
the New Waterfront District master plan, Ian Hogan and Solidere urban
development division team
Solidere Annual Report 2008

BEIRUT MARINA

Beirut Marina provided moorings for 147

boats in the last year, having entered its
seventh season in April 2008. Its capacity
stands at 186 boats, ranging from 5 to 65 m,
with 75% of the mooring area accommodating
boats of more than 25 m length. By end 2008,
Solidere had signed medium- or long-term
leases (three, five or ten years) for 41 boats,
and one-year leases for 106 boats.
Civil works for the marina were
part of important marine works delivered in
2002, as per the 1994 agreement with the
State, and also comprising a breakwater and
a two-line defense structure protecting the
marina and the waterfront. The US$298 million
project cost was partly financed with a 10-year
US$107.3 million loan concluded in 1996 with
BNP Paribas and Banque Indo-Suez, with
US$7.3 million COFACE guarantee. The loan
was entirely repaid.
Beirut Marina was put at the
disposal of Solidere in 2002, as per a 1997
agreement with the State granting the
Company the right to operate the marina
and below-corniche car park for a 50-year
period. Solidere undertook at its own
expense, and with the relevant public
authorities supervision, the construction of
necessary installations and equipment,
including access and circulation roads,
surface parking on the breakwater, below
corniche car park, and on-site development:
pontoons, utilities for the boats,
harbormaster, customs and immigration
facilities. It also issued marina by-laws
addressing such matters as general services
administration, operation, boat traffic,
pedestrian and vehicular circulation,
environmental protection and public safety.
Completed works include
pontoons, mooring and service bollards,
utilities and network ducting, designed by
Groupe Camille Rayon (France) together with
an additional quay providing improved shelter
in times of northerly winds. Temporary
quayside offices have been provided for
harbormaster and public authority activities,
pending completion of the Beirut Waterfront
Development based on Steven Holls design
(see Real Estate Strategy). In time for the
new season, the marina was connected to
EDL power by mid-February 2008.
Solidere started in March 2009
the works for the 400-space below-corniche
car park, awarded to Geneco.

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Solidere Annual Report 2008
41
LAND RECLAMATION AND
PREPARATION
Solidere completed in 2008 land reclamation
and preparation works for the New
Waterfront District, in accordance with the
tender documents agreed to with CDR. The
works cover 18 ha of land, plus extensions
below sea level. US$56 million project,
awarded to Radian International (US) in 1999,
was financed by means of three bank loans:
a locally syndicated loan for its local content,
export credit financing, topped by local
financing, for its US content in equipment,
engineering and construction services.
All three loans were fully repaid.
Solideres arbitration case
against Radian International and its mother
Company URS was settled by way of an
amicable settlement agreement dated June
16, 2008, after a partial award dated June 5,
2008 accepted Solideres claim to include
URS as co-defendant in the arbitration
proceedings. Under the settlement
agreement, Radian and URS paid to
top New Waterfront District, land reclamation
opposite views towards Mount Sannine
Solidere a cash amount in compensation of
the damages suffered by Solidere. This
concluded a dispute which went in 2003
before an international arbitration tribunal
under the rules of the International Chamber
of Commerce. A tribunal award issued in
July 2004 required Radian to remedy the
defects in the works at no cost to Solidere,
cover all arbitration legal costs, and provide
Solidere with a plan showing how Radian
proposed to continue the works to comply
with the contract. The failure of negotiations
was coupled with the contractor suspending
works in February 2005, ignoring all
instructions to return to work, and refusing
to reimburse Solidere's legal costs. The
Company terminated the Radian contract in
February 2006. Both Solidere and the
contractor filed counter arbitrations against
each other.
Solidere took measures on the
ground to expedite completion of the project.
A fast track approach was adopted, with
Hornagold & Hills International - H2i (UK) as
construction manager. The project was split
into four operations packages, to be executed
by separate contractors. These include
Socit Contemporaine de Dveloppement,
Assaf & Coex, Alfarah Co, and Lechbenberg
(Germany), which studied the possible options
for dealing with the leftover stockpile of
plastics. Delayed by the 2006 summer war,
added to the legal issues, the works
progressed in 2007. All earthworks originally
part of Radians contract (excavation, sorting,
processing, backfilling) were completed by
end January 2008. Backfilling works to close
the open water channel along the caissons
were completed end June 2008. Works are
also under way to backfill the sub-base layers
of streets and roads, as per the Master Plan,
with the majority of roads backfilled up to
minus 40 cm from the final finished level.
MORES (Lebanon) was assigned
as environmental consultant for remediation
and treatment, in charge of monitoring the
generation of landfill gas from 70 bore holes
in the park area and proposing remedial
measures. Longitudinal venting trenches
were executed to help relieve gases
generated in backfilled materials placed
by Radian in the park area prior to their
contract termination. Radians inadequate
dealing with the gas issue had been at the
heart of the dispute with them.
Pending the delivery of all
Waterfront District sites for infrastructure,
development and public space, an area in
the eastern part of the district was leveled,
equipped with temporary roads and parking
areas, and leased to Beirut International
Exhibition and Leisure Center (Biel) until
2013. Activities hosted in temporary
structures currently include exhibition halls,
conference areas, a banquet pavilion and a
seaside restaurant.
Solidere Annual Report 2008

INFRASTRUCTURE AND PUBLIC SPACE

The design of the New Waterfront District

infrastructure, hardscaping and landscaping,
has been delayed pending the issuing of a
Council of Ministers decree approving
Solideres Master Plan proposal for Sectors
A and D.
On the other hand, land sales
agreements signed with developers in the
New Waterfront District tentatively schedule
infrastructure delivery for early 2011, with a
clause providing for possible delay to a later
date. Accordingly, Solidere decided to
concentrate efforts to meet this target and to
that effect is expected to sign an agreement
with Laceco for undertaking technical and
engineering studies for infrastructure, with
works expected to start upon Council of
Ministers approval of the Companys
proposed Master Plan amendments for
Sectors A and D.
Infrastructure design is expected
to finish in July 2010 and execution allowing
a delivery of the sites will require another
18 months. Thus, by end 2011, the road
network should have been built, with plot
parceling, and laid out with asphalt, though
not necessarily equipped with street
furnishings, and gardens will not have been
laid out yet.
Concerning landscaping, a
limited international competition, engaging
some of the worlds leading landscape
architects, will be launched to design the
70,000 sq m waterside park and the corniche
promenades, that are to constitute the city
centers major contribution to Beiruts public
domain. While forming separate projects, the
park and corniche are to be envisioned
together, as will be indicated in the briefs
under preparation. Other green areas will be
designed by separate consultants.
top and opposite New Waterfront District,
corniche promenade
Solidere Annual Report 2008
RESTORATION
The restoration of Beirut city center has
confirmed the sustainability of traditional
districts and heritage buildings and their
great potential for creating value, once they
are adapted to the needs of contemporary
life and business.
Beirut historic core has a rich heritage
of religious, public, institutional and
commercial buildings. Widely recognized as
a conservation showpiece, this vieille ville,
with its modern amenities behind beautifully
renovated faades, has witnessed a high
demand for a broad range of office, retail,
cultural and recreational uses. The
peripheral neighborhoods of Saifi, Wadi Abou
Jamil and Zokak El Blatt, have re-emerged
as urban villages.
RESTORATION PROCESS
In the Master Plan, 265 buildings and
27 public or religious buildings were retained
for preservation. These were carefully
restored in accordance with a set of rules
established by Solidere, in cooperation with
urban planning authorities, and involving
sector plans and restoration guidelines.
Restoration briefs established
for the retained buildings were based on
architectural and photogrammetric surveys,
damage assessment and historical research
on original designs and materials. The briefs
provide guidelines for articulating the design
and restoration strategy to be adopted in
each individual case, and are stricter for
those buildings deemed of heritage or
architectural value. Projects go through
preliminary design approval, restoration
permit issuance, mobilization of site works,
faade and material sample approval, site
inspection and finally occupancy permit
procedure. Solidere has a dedicated team to
monitor implementation.
Stone repair was important in the
Foch-Allenby and Nejmeh-Maarad areas,
notable for their faithful reconstitution of
elaborate faades and their high quality stone
masonry. City center restoration combines
authenticity with a progressive outlook.
Buildings are rejuvenated through the use of
skylight atria, roof gardens or glazed roofs.
Interiors are fitted with modern equipment
for functionality, comfort and efficiency. In
residential neighborhoods, this is allied with
sensitivity to the Mediterranean typology. In
office buildings, open plan design allows
optimal and flexible use of floor area.
Restored buildings are maintained on a
regular basis. To that effect, owners provide
the Beirut Municipality with a signed
commitment to undertake general cleaning
and faade maintenance every five years.
Solidere took the lead in the
restoration process, undertaking showcase
work in its properties and closely monitoring
other parties' projects.
Solidere Annual Report 2008

At the end of the recuperation process,

146 built lots had been recuperated. Of this
total, 130 buildings have been fully restored.
Of the 16 remaining buildings, six are under
renovation. In Marfaa, lot 1144 is El Patio
hotel, designed by Joe Chehwan with
2,958 sq m floor area; lot 243, the
Municipality Annex designed by Nabil Azar,
has 5,478 sq m of office space; lot 1353,
Islamic Wakfs building, was designed by
Michel Barmaki to offer 2,098 sq m of office
space; lot 16 designed by Pierre Neema
offers 415 sq m of retail space in the Souks
district. In Mina El Hosn, lot 771, a private
residence designed by Pierre El Khoury
Architect, covers 2,093 sq m of floor area.
In Saifi, lot 735 was designed by Fadi Najem
to offer 4,630 sq m of residential floor space.
Two buildings are under
permitting at the Municipality of Beirut:
lot 448 Marfaa offering 3,682 sq m of office
space is designed by Wissam Jabr;
Al Karmah Real Estate on lot 808 Mina
El Hosn, offering 1,464 sq m of residential
space is designed by R & K Consultants (the
latter may be demolished and rebuilt with
additions). In the Souks District, the former
L'Orient-Le Jour building on lot 12 Marfaa
is under design by Samir Khairallah &
Partners to offer 4,364 sq m of retail and
office space. Restoration stopped in four
buildings due to legal issues, and one
building was demolished. Finally, two
recuperated buildings in Mina El Hosn were
purchased by Solidere and sold to investors
for new development. These are lot 111,
Hyatt Grand Hotel, and a Levantine house
on lot 1135, now regrouped with lot 1133.
(See Developers' Projects.)
Of the non-recuperated built lots
whose ownership had devolved to Solidere,
the Company sold 'as is' 37 original lots,
regrouped into 31 lots, and leased 'as is'
one building to be restored by its user.
Restoration is proceeding on the part of the
buyers / users, with 29 built lots ready, one
under renovation and one under permitting
at Beirut Municipality.

top Moutrane Street

RECUPERATED AND SOLD BUILDINGS opposite top boutique at the corner of
Abdel Malak and Moutrane streets
opposite bottom boutique on Allenby Street
Solidere successfully completed the
recuperation process, giving former owners
and tenants the opportunity to regain their
rights in the buildings retained for
preservation. Besides fulfilling the
requirements that apply to all restoration
projects, recuperation contracts outlined the
financial rights and responsibilities of involved
parties, be they returnee owners or tenants.
Solidere Annual Report 2008

SOLIDERE BUILDINGS RELIGIOUS BUILDINGS

Of the 37 built lots retained in Solideres Nineteen places of worship attest to the
portfolio, including five co-owned buildings, spiritual value of central Beirut. Solidere
33 buildings were the object of restoration has assisted in the gradual restoration of
by the Company, and four were restored by 18 of them, with 15 now in use and drawing
third parties, respectively co-owners and increasing numbers of people. The new
leaseholder, with lot 164 Saifi and lot 1042 Mohamad Al Amin mosque took on a
Mina El Hosn completed, lots 1261 and 996 profound meaning when the late PM Rafic
Mina El Hosn on hold due to legal issues. Hariri was laid to rest near it. Restoration
In addition, Solidere undertook the of the Synagogue in Wadi Abou Jamil is
restoration of two lots on behalf of the Islamic expected to take place shortly under the
Wakfs, with lot 141 Marfaa completed and lot guidance of the appointed architect,
1353 Marfaa under renovation. (Refer to Pierre Rihane.
Recuperated Buildings.)
By year end, 27 buildings had
been restored by Solidere: 13 residential
buildings in Saifi, Wadi Abou Jamil and
Zokak El Blatt; and 14 for office use with
retail at street level in the Maarad and
Foch-Allenby areas, which include six
buildings serving as Company premises.
As at end 2008, the company had 173
lease agreements for space in its restored
buildings: 40 in commercial and 133 in
residential properties, resulting in the
occupation of around 16,961 sq m of
commercial and 24,529 sq m of
residential space.
Restoration is proceeding in
six Solidere built lots, with three at the
construction stage, one under permitting
at Beirut Municipality, and two on hold for
legal problems.
48 Lot 670 Zokak El Blatt, designed
by Fouad Menem as a residential building
with at street level a space that could be used
for hospitality activities, is under construction,
having obtained building permit for its four
floors. Parking spaces for the building
residents are provided in adjacent lot 1144, a
six-story infill building with 128 car spaces on
six basement levels. Lot 1261 Mina El Hosn,
designed by R & K Consultants to offer
1,858 sq m of residential space, is on hold
due to cadastral plan boundary issues.
Lot 800 Mina El Hosn involves two old
Levantine houses with an infill building. The
restored part was completed and the infill
is under construction. Its completion is
scheduled for mid 2011. Lot 891 Bachoura,
Grand Thtre, the subject of real estate
development involving restoration and infill
building, is under study at Beirut Municipality
for permit approval. Meanwhile, it is also
under study for a possible redesign.
(See Real Estate Strategy.)

left lot 1261 Mina El Hosn restored residential building, R & K Consultants
opposite lot 1138 Marfaa restored office building, Maurice Bonfils
BEIRUT
SOUKS
OPENING
SOON
BEIRUT
SOUKS
Eagerly awaited as the crowning of the
existing city center, Beirut Souks are opening
soon, re-emerging as a lively shopping,
hospitality and entertainment center, a
magnet and exciting experience
for residents and visitors. The commercial
space is interspersed among landscaped
pedestrian areas.
As they follow the pre-Roman
ancient street grid, the Souks integrate
archeological features and gardens,
consecrating the historic value of the area
while using the state-of-the-art technology
of modern commercial centers.
Visitors can stroll along the
souks, some covered with skylights and a
natural aeration system, such as Tawila,
Jamil and Arwam, others open to the sky,
such as Ayyas, Bustros and Sayyour, and
enjoy shopping and entertainment in a wide
variety of shops, restaurants and cafs.
The opening in the last quarter
of 2009 of the South Souks is a major step
in completing the urban fabric and critical
mass in Beirut city center. It is also a
consecration of the capital and its center
as a regional and global retail destination.
One of the most important
commercial centers in Lebanon and the
region, Beirut Souks are to constitute the
heart of economic and tourist activity in
central Beirut, contributing to put it on the
world map as a major regional center for
shopping, work and entertainment.
left Souk Tawila corbels and shop fronts
top right Souk Jamil corbels and bronze musharrabiyas
bottom right Souk Jamil skylights
other prestigious names as Samir Khairallah
55
THE SITE
Here we have not only a beautiful setting but
also an incredible historical past and a
remarkable location at the crossroads of
itineraries that have been used all the time.
Geographically located in the heart of the
capital, Beirut Souks are at a close distance
from the historic core, Hotel District and
New Waterfront, with direct links to the port,
airport and metropolitan transportation
network. They are surrounded by up-market
office, residential and hospitality areas and
enjoy easy car and pedestrian access.
Historically, the development
derives its name, identity, urban plan and
architectural character from the site of the
old Souks on which it is built.
Beirut Souks draw their
inspiration from the urban relationships and
historical layers of the site. As they follow
the ancient street grid implanted since pre-
Roman times, and integrate archeological
features and historical squares and
monuments, the new Souks consecrate the
historic value of the place.
The project reshapes the oldest
retail precinct in the world, bringing back
people to a place they did visit and enjoy for
the last three millennia.
THE CONCEPT
Re-structuring a city precinct, not designing
a shopping center
Designed in five separate commissions by
international and Lebanese architects, Beirut
Souks offer 163,010 sq m of floor space
interspersed among 17,307 sq m of
landscaped pedestrian areas.
The architects include two
Pritzker Prize architects, Rafael Moneo
(Spain) and Zaha Hadid (UK-Iraq), and such
& Partners, Kevin Dash (UK), Rafik Khoury
and Partners, Valode et Pistre (France),
Annabel Karim Kassar, Olivier Vidal (France)
and Dimitri Alatzas Asociados (Spain).
Their brief was to restructure
a city precinct, not to design a shopping
center. Whilst retail would be a major
component of the project, it would not be
the only component.
Because they draw their
inspiration from the urban relationships and
historical layers of the site, the new Souks
offer a unique experience that is quite
different from that of a typical commercial
mall. Beirut Souks are an open bazaar,
affording modern shopping and leisure
opportunities while preserving the intricate
relationships of urban market spaces with
the city.
In terms of Solidere, Beirut Souks
are a design signature. Preserving
the historic tradition that marks the market
district, the new Souks revive the mood and
atmosphere of the old Souks and are fair to
this heritage, providing a contemporary
reinterpretation and commentary of that
tradition. With this unique approach, Solidere
is in fact bringing back the traditional Souks
into the fabric of the modern city. As the
South Souks are about to open, one can
begin to grasp this powerful idea, and to
appreciate the sensitivity and strategy of
its designers.
Solidere Annual Report 2008

MONEOS SOUKS

Rafael Moneos Souks strategy consists in

attending to the urban and human scale of
the project at the same time, while
preserving the rich historicity of the site in a
seminal and contemporary interpretation.
The architects urban strategy in
the Souks Core seeks to integrate the siting
and scaling of the complex to ensure
harmonious relationship with the
surroundings. Urban portals, framed views,
height considerations and the massing all
take their cues from existing neighboring
structures and infrastructure and respond
to the long history and physical context of
the site.
The strength of the design begins
as a result of carefully resolving the siting
and the positioning of the Souks that recalls
their predecessors, including the proportions
of the buildings that maintain a respectful
relationship with the city.
Internally, Moneo does not
conceive the project as one building, which
would be too massive. It is rather composed
of a series of structures creating a network
of urban spaces that include internal streets,
dramatic vistas, sunken courtyards, covered
bazaars, and various plazas.
Moneo delicately works around
the sites historical and archeological layers,
which include remains going as far back as
the Phoenico-Persian era. To expose the
56 layering strategy of the site, Moneo provides
a sunken, landscaped courtyard equivalent in
area and volume to Nejmeh Square, in a
studied urban gesture.

top dramatic openings of Souk Arwam surrounded by Chevron pattern cladding

bottom Souk Arwam and the Atrium viewed from Sayyour Street
opposite Block M overlooking Souk Al Jadid
Solidere Annual Report 2008

Moneo at the same time pays close attention

to the architectural detailing, in particular on
the choice of materials and how they come
together as they bring unity across the entire
city block.
The ubiquity and consistency in
this surface treatment, however, recedes
into the background as it anticipates the
arrival of the retailers while providing them
full freedom and diversity for integration
without compromising the identity of the
project. In this fashion, the day-to-day
activities of retailers, shoppers and urban
citizenry unfold under a carefully designed
urban backdrop.
Another example of Moneos
combination of historicity and invention is
evident as one approaches the site along
Souk Tawila from the south. A new prayer
hall is integrated within the office complex,
creating with the Mamluk Ibn Iraq shrine a
virtual portal to the bazaar. The exposed
concrete dome of the prayer hall plays off
the centrality of the shrine while providing a
contrapuntal approach to contemporary
historical interpretation and an alternative to
todays desire for regional contextualism.

The dramatic vertical linearity

of the Souks themselves, and
in particular Tawila and Jamil,
provides unusual and exciting
spatial connectivity with the
rest of the project.
While the mall experience is self-contained
in a limited and closed space, Beirut Souks
can be experienced in a transversal way,
extending or lying across at right angles to
the long axes of the main souks and
connecting with the fabric of the city center.
In other words, the layout creates an
intricate three-dimensional network that
provides a labyrinthine yet rich experience
fully integrated with the city.

top Souks Ayyas leading to Intabli Square

bottom Block M passage from Bab Idriss Square to Zawiyat Ibn Iraq Square
opposite Souk Tawila pedestrian promenade
Solidere Annual Report 2008
SOUTH SOUKS
The South Souks cover a site area of
30,000 sq m, delineated by Allenby Street
east, Weygand Street south, Patriarch Hoyek
Street west and Trablous Street north.
They consist of the Souks Core
with Block M, designed by Rafael Moneo
(Spain) and Samir Khairallah & Partners,
offering 66,207 sq m of floor space; the
Gold Souk, designed by Kevin Dash (UK)
and Rafik Khoury and Partners, and offering
15,989 sq m of floor space; and the
underlying streets and other public spaces,
for which Olivier Vidal (France) is space
planner and landscape architect. Dimitri
Alatzas Asociados (Spain) was management
system consultant for the underground car
park. Liban Park made the circulation.
The South Souks include a variety
of stores, cafs and restaurants, a childrens
museum and center, and office facilities. The
total built-up area is 71,903 sq m, which
includes 54,163 sq m of leasable space and
10,000 sq m of pedestrian walkways, squares
and alleys.
The Souks Core includes five
blocks (G, H, K, N and P) accommodating
around 180 shops, 6,558 sq m of office area,
around 20 food and beverages outlets, and a
childrens museum and center. Block M
includes around 4,077 sq m of office area,
around 40 shops and a food hall of around
6,000 sq m on the lower floors.
60 The Gold Souk, designed by Kevin
Dash (UK) and Rafik Khoury and Partners,
include four blocks (E, D, F, and W) all linked
by covered alleys and arcades. They
accommodate around 80 shops, ranging
from jewelers boutiques to high-end shops.
The upper levels include a luxurious
restaurant and 7,795 sq m of offices.
Souks Core The main entrance to the Souks
is on Weygand Street, a few meters east of
Riad El Solh Street. The space constitutes
a plaza: to its left is Block M, to its right are
the Gold Souk, and Zawiyat Ibn Iraq Square
with the Mamluk shrine renovated by Yousef
Haidar. Block M accommodates a food court
at a lower level, 6,863 sq m, accessed from
Tawila and Sayyour souks, and fine retail
outlets at street level in Weygand,
5,770 sq m, with outside restaurants
seating on Bab Idriss Square and at the
main entrances to Jamil and Arwam souks.
A new, 314 sq m prayer hall,
covered by a small dome, is integrated
within block M, a four-floor complex with
4,077 sq m of intelligent offices and
11,932 sq m commercial space, close to
Zawiyat Ibn Iraq. It creates a gateway effect
in its symmetry, shows a modern approach
to a religious dome and offers a virtual portal
to the bazaar leading to the major north-
south Souks axis: Tawila, the longest of the
Souks, with Ayyas to its east, Jamil and
Arwam to its west. They converge north in
Ajami Square, off Trablous Street. The main
east-west axis is Sayyour Street, with
Bustros and Arwad as secondary streets.
Around 200 retail units of various
sizes and volumes, 39,810 sq m in total,
are aligned along streets and around
squares, with shops, cafs or restaurants
on one ground floor, one ground floor with
mezzanine or two full floors, and the
1,903 sq m Childrens Museum, which
will include a nursery.
The site topography, with
streets situated at different levels, has been
exploited advantageously. Thus, Jamil,
Arwam and Tawila souks start practically on
the same street level. But Arwam, falling in
between the other two souks, rises above
them by midway, becoming an upper-level
souk. Consequently, ground floor shops on
the west side of Souk Tawila can also have
frontage on Souk Jamil; while from Arwam
shops, one can have views of either Tawila
or Jamil.
Souk Ayyas is a narrower souk,
fully open to the sky. At its crossing with
Souk Bustros is Intabli Square, featuring a
water fountain. The east side shops on Ayyas
have views on the beautiful, restored Art
Deco building on Fakhry Bey Street.
Ajami Square, at the convergence
of the north-south souks, is a grand plaza
with restaurants and sidewalk cafs,
designed to house large events and concerts.
The covered plaza has an 18 m high ceiling
with massive drop beams, equipped with roof
vents and skylights to protect from direct
sunlight, heat and rain. The walls and large top South Souks with Gold Souk in the foreground
opening on Trablous Street form a huge and Souks Core overlooking the sea
northern portal to the South Souks. opposite elevation on Fakhry Bey Street
Gold Souk On the corner of Weygand and
Allenby streets, the Gold Souk designed by
Kevin Dash connects the whole of the Beirut
Souks to the restored pedestrianized heart
of the city. The buildings on both street
frontages have shops at street level
sheltered by deep arcades which form a
natural extension of those of Maarad Street
and provide covered access to the three
primary entrances of the Souks.
The corner entrance is
emphasized naturally by the way the run of
buildings on Allenby turns and folds into it,
marking its importance from all directions.
Jewel-like overscaled chandeliers furnish
the 10 m high entrance arcade and
announce the Gold Souk beyond. The two
other entrances are from Zawiyat Ibn Iraq
Square, the primary entrance to the Souks
from Weygand Street, and from the Fakhry
Bey steps which lead directly to Allenby
Street.
The buildings are designed as a
natural extension of the restored
conservation area. The faades are yellow
limestone with simple punched windows, the
rhythm and proportion of which change to
effect a gradual transition from the ornate,
restored buildings on Fakhry Bey Street to
the modern simplicity of Moneo's design on
Weygand Street.
High spec modern aluminum The four blocks accommodate around 80
windows are faced externally with timber, jewelry boutiques on the ground floors
typical of the conservation area and set in totaling 3,850 sq m. Block W has three floors,
honed reveals, which suggest in a subtle way D and E four, with 7,795 sq m of office space
the more elaborate window surrounds of its on the upper floors. Block F, with faades on
restored neighbors. Tawila and Sayyour streets, has a ground
Buildings on the street frontages floor for jewelry shops. The walkways are
form a protecting wall enclosing pavilions of covered with wood and stainless steel.
only two floors linked by, and forming, The enclosed space is considered
human scale pedestrian passages and as an extension of Zawiyat Ibn Iraq Square
squares, lined with tiny shops typical of and the low scale pavilion contained within it
jewelry markets. The scale and detail of the is split by the extension of Souk Tawila. This
buildings is small and precious and provides part of the Souks is made up of small units
a level of intimacy and delicacy appropriate with a major restaurant space with terraces
to a concentrated group of jewelry shops. overlooking and animating the trading level.
The shop fronts are set between paired, The Gold Souk accommodates an
honed, yellow limestone columns with entrance to the underground parking and the
display cabinets suspended at eye level. entrance to the servicing area which lies
The shops are sheltered by arcades or directly below. Access from the car park is
black fabric awnings and are discreetly from the landscaped court in the Souks Core.
signed and lit.

top Gold Souk passage leading to Souk Ayyas

opposite Gold Souk terrace overlooking Jewelers Square
Solidere Annual Report 2008
URBAN EXPERIENCE
The Souks experience is full of surprises.
An impressive outside gives way to intimacy
inside, a reminder of introvert architecture
typical of Arab cities. The place slowly
unfolds its charm. Narrow, shaded, souks
alternate with vibrant open spaces.
In Olivier Vidals mind, planning
is about people and not about shapes. The
void in between building is a space where
anything can happen. The experience is the
people and the main thrust of the whole
project is to recreate a peoples place.
Never once the experience
encountered in such a city as Beirut has
been absent in the process of designing this
place. For this reason, the Souks could not
be anything else but an urban experience.
The Souks are to be a peoples place where
being there is the most important thing, a
place where you can come only to enjoy the
pleasure and comfort of a city square and
elect it would be your favorite meeting spot.
The landscaping concept is that
of a city not a building. It is in sync with the
Mediterranean rim, creating shade, evoking
water and giving havens for retreat.
But systematically the open
space is a focal point; it is the corollary of
the buildings behind, it is an integral part of
the city texture.
The intention is to create a
promenade architecturale, where discovery
64 and surprise are part of the experience, to
tease visitors into going further to discover
new ambiences, new feelings and new
pleasures, to enjoy their stay regardless of
the reason they are there, strolling along or
shopping.
The quality of the open space
reflects on the buildings and Solidere
understands how important it is to treat the
spaces in between buildings as a project in
itself and not let it happen by default. The
street texture has to be woven in such a way
that it does support the architecture that
borders them.
Street activities Squares and streets that
are eight or more meters wide will be
enlivened by kiosks offering sweets, food,
accessories and other; interactive signage
and information screens. In Bab Idriss, a
dozen sculptures by Xavier Corbero (Spain)
will animate the square.
The Souks will be enhanced by
a virtual animation throughout the Heritage
Trail. Ajami Square and Trablous Street
will provide musical entertainment, with
recorded music or a prime DJ to lend
a mood to the square, its restaurants
and cafs. An art program is created to
reinforce the notion of service to the people
and not systematically push on commercial
aspects of the place. If Solidere succeeds in
making this place part of everydays life for
many people there is no limit to success.
Historic / poetic walk Visiting the Souks
is a voyage in time and space. One may
experience them as a medieval city. But the
walk is no longer conducted on one plane,
but rather as an intricate three-dimensional
promenade, with multi-directional spatial
and visual links.
Moneo paid attention from the
smallest detail to the urban scale. Even in
terms of acoustics, the sounds are to mimic
the sounds of traditional Souks.
The Atrium at the intersection of
Arwam, Tawila and Sayyour streets creates a
poetic statement to city lovers. This parking
crater, a sunken courtyard filled with soil
and palm trees, architecturally exposes the
modern construction method, a successful
integration between new buildings and city
layers. The archeological site in the middle
of the Souks is balanced at the northern end
by Ajami Square, an 18-meter high, covered
plaza leading to Trablous Street.
Ajami Square represents the
meeting point where all streets meet up. It
is designed as both an open, and gazebo-like
square with a concrete wall that has large
opening and a ceiling with vents to prevent
from direct sunlight and heat or stand as a
refuge from rain. It is treated like a huge
portal, or a portico, a gate for the city
(Beirut Souks).
Heritage trail Beirut Souks are an exemplar
of how the layers of a historic city can be
evoked in the design of modern structures.
The Souks retain the ancient street grid and
Ottoman access gates; reinstates Bab Idriss,
Ajami, Majidiya Mosque and Khan Antoun
Bey squares; integrate the restored Mamluk
Zawiyat Ibn Iraq and Ottoman Majidiya
mosque; and incorporate such unearthed
archeological finds as the late Phoenico-
Persian harborside settlement, Byzantine
shops, and remnants of the medieval city
wall and moat, together with other artifacts
and mosaics found on the site.
A Heritage Trail will guide the
visitors. Accessing the Souks from their
main entrance at Zawiyat Ibn Iraq Square,
they can go through Souk Al Franj and along
the newly called Souk Al Jadid. Reaching
Ajami Square, they can stroll all the way
along Souk Tawila, or go across into Souk
Arwam. At the crossing is Intabli Fountain,
a reminiscence of the old pond. Going down
the steps, they will reach the ancient
Phoenician-Persian settlement, which will
be a site museum.
top Gold Souk terrace overlooking Weygand Street
opposite Gold Souk passage leading to Sayyour Street

SHOPPING AND LEISURE
The new Souks offer a modern shopping and
leisure experience, as an open bazaar of the
21st century. The Souks follow contemporary
standards for retail space, offering the
convenience and comfort associated with
malls within a structure of both open and
shaded streets, dotted by pleasant open
landscaped spaces. Retail units form
shopping streets that offer a concentration
of the finest local and international brands.
Solidere has designed a tenant mix strategy
with the help of a number of consultants.
Restaurants and food outlets Solidere has
required each tenant to offer a unique
concept for his restaurant or food outlet,
with exclusivity for Beirut Souks. The
gourmet store, occupying the first basement
and the lower ground level of Block M on
Weygand Street, will have a Sultan
International signature.
A short list of Lebanese, Arab
and European architects was proposed for
the restaurants interior design. Among
signature projects: on Bab Idriss, an Art
Deco restaurant concept developed with
Jacques Garcia (France); on Ajami Square,
a three-floor caf concert, concept by Jean-
Marie Riachi, a city caf, concept by Nabil
Dada, and a caf by Casper and Gambini,
concept by Galal Mahmoud (Egypt); on Ajami
Square intersection with Souk Tawila, a
double-ceiling restaurant by Boubes,
concept by Claude Messir (France); above
the stairs forming the Souks access from
Fakhry Bey pedestrian street, a salon de th
by Moatti & Rivire (France).
More restaurants are envisaged,
including a two-level, 1,401 sq m floor area,
signature restaurant in the Gold Souk, and
outside seating and restaurants in the
Fakhry Bey pedestrian area.
Tenants design specifications and
monitoring Solidere has laid down for the
Souks tenants design specifications for the
shopfronts and guidelines to direct interior
construction works, and is conducting site
supervision for quality control. Shop fitting is
done in coordination with Solideres
consultant Samir Khairallah & Partners
(SKP). The tenant should get the approval of
SKP for the interior usage of the space.
Beirut Real Estate Management and
Services Beirut Real Estate Management
and Services (BREMS) was established by
Solidere and Aswaq Management and
Services s.a.l., subsidiary of Socit des
Centres Commerciaux (France), a leader in
shopping mall management in Europe.
An assistance agreement was
signed with BREMS for the Beirut Souks,
hereby BREMS implements on Solideres
behalf leasing activities for Beirut Souks.
It is also in charge of property and facility
management, as well as rental management.
Parking The project includes an
underground parking facility that currently
accommodates 2,900 cars, excluding
additional parking planned under Khan
Antoun Bey Square in the North Souks with
a capacity of 400 spaces.
An adequate number of entry and
exit lanes is distributed along Allenby Street,
Patriarch Hoyek Street, Fakhry Bey Street
and Mir Majid Arslan Avenue.
Other facilities and services Souks tenants
benefit from complete services (water,
electricity, telecom, Broadband, security,
etc). In addition, miscellaneous support, and
convenience and information facilities are
provided throughout the public areas of the
Souks, such as telephone booths, ATM
machines, information desks, information
screens and public toilets.
Wayfinding The South Souks are divided into
eight main sectors, each defined by the name
of the old souk it is superposed on, or by a
walkway or surrounding street, and consisting
of retail shops, cafs and restaurants having
each a unit number. The eight sectors are:
Fakhry Bey, Gold Souk, Tawila, Ayyas, Jamil,
Ajami, Hoyek and Arwam.
The levels of the Souks comprise
different sectors, and each level is assigned
a number increasing from the lower to the
upper. Each sector has its own identity,
reflected in the choice of materials and
tenants design specifications including
shopfronts. The sector labeling helps in
locating each shop. The functions are:
ancillary, mezzanine, retail, storage, terrace.
Each of the South Souks sectors
consists of several shops which include
different space types that are subdivided into
their specialized types.
Wayfinding is based on the Souks
structure, which include sectors, levels and
functions.
SOUKS MATERIALS

Souks Core materials

Streets and piazzas flooring are mainly in
basalt stone; Cenia stone and Travertine are
used in Souk Arwam
Building faades are in Cenia stone and
Pierre de Jaumont
Jambs and soffits of shopfronts are bronze
Musharrabiyas above shops in Tawila and
Jamil souks are in bronze
Skylights are in tempered laminated high
performance glass
Floors and walls in public toilets are in
marble
Floors of entrance lobbies of blocks K & M
are in Cenia, walls are in Cenia, wood
paneling and emulsion paint, ceilings in
painted gypsum board
Floors of fire exit stairs are in Terrazzo
tiles, walls and ceilings in emulsion paint
on plaster and / or smooth finish concrete
Elevators receive marble flooring
(passenger) / heavy duty vinyl flooring
(service), and anti scratch stainless steel
wall panels
Glazed brick tiles are used for pitched roofs
Windows for office buildings are in
aluminum silver satin finish
Doors for fire exits and technical rooms
are fire rated painted steel doors.

opposite Block M skylights

bottom South Souks roof detail
Solidere Annual Report 2008

Outdoor spaces materials

Ornamental and street lining trees
on sidewalks
Stone planters for large specimens
A wide variety of flowers in pots
Telephone booths and ATM machines
Information desks and information screens
Drinking fountains and palm trees on
Bab Idriss Square
Architectural fountains on Intabli Square
and Fakhry Bey steps
Granite benches along the main arteries
of the Souks
Wood deck for external seating at Bab
Idriss Square, Patriarch Hoyek and Fakhry
Bey streets
Ashtrays in cast aluminum
Flat waste bins in bronze patina along
main arteries
Basalt and granite for floor finishing in
streets and piazzas.

Gold Souk materials

Streets and piazzas flooring are in granite
Building faades are in Pierre de Jaumont
Jambs and soffits of shop front are in
Pierre de Jaumont
Musharrabiyas under display windows and
in upper levels are in cedar wood
Pergolas in arcades and pedestrian ways
are in cedar wood and stainless steel
Floors of entrance lobbies are in marble
tiles, walls in emulsion paint and wood
paneling, ceilings in painted gypsum board
and perforated acoustic metal panels
Floors of fire exit staircases are in ceramic
tiles, walls and ceilings in emulsion paint
or plaster
Floors and walls in public toilets are
in marble
Elevators receive marble flooring
passenger / heavy duty vinyl flooring service,
and anti scratch stainless steel wall panels
Temporary wood doors are installed in
all offices
Doors for fire exits and technical rooms
are fire rated painted steel doors
Windows for office buildings are in dark
brown anodized aluminum and wood.
Solidere Annual Report 2008
NORTH SOUKS
The second phase of the Beirut Souks
development covers the North Souks, which
has a site area of about 24,000 sq m and
offers 80,905 sq m of floor space. These
consist of a 16,574 sq m department store
(block T), an entertainment complex (blocks
U and V) and another multiuse building
(block S) totaling 39,006 sq m of floor space.
Design by Zaha Hadid (UK-Iraq)
of the department store is proceeding in
coordination with Solidere teams and the
store operator. A landscaped square with a
fountain faces the department store and the
restored Majidiya mosque.
bottom North Souks department store preliminary design, Zaha Hadid
opposite entertainment complex elevation on Allenby Street, Valode et Pistre and Annabel Karim Kassar
73
Designed by Valode et Pistre (France) and
Annabel Karim Kassar, the entertainment
complex (blocks U and V) comprises 14
modern cinemas above ground with
generous lounges and concession areas, a
retail / entertainment zone, restaurants, a
multimedia store, a games arcade and
retail extending to Khan Antoun Bey Square.
A mega entertainment destination and
architecturally avant-garde structure, the
project was redesigned by the architects in
line with up-to-date norms and standards,
featuring more commercial space and Work on the concept design for the cinemas
introducing a pedestrian link between internal circulation and interior design is
Allenby and Trablous Streets. proceeding, under Solideres supervision, in
The final design was delivered in coordination between the architects and the
December 2008 and Solidere started in April interior designer Nabil Dada. The multiuse
2009 the excavations and retaining wall. building (block S) comprises a food court
Construction of the superstructure is with garden and retail at ground level, retail
expected to be completed within two years or offices on the first and media-related
after obtaining the building permit. offices on the second floor.
Solidere Annual Report 2008
REAL
ESTATE
STRATEGY
Developer Beirut Waterfront Development s.a.l.,
50-50 joint venture between Solidere and
Stow Waterfront Development s.a.l.
Design architect Steven Holl Architects (US)
Associate Architect Nabil Gholam Architecture
Site Master Plan Sector D, lots 1455 and
1456 Mina El Hosn
Land area 22,341 sq m
Land use Residential, hospitality
and commercial
Program Furnished apartments, yacht club,
restaurants, outdoor public spaces with site
specific art installations, specialty stores,
harbormaster, public facilities
Total floor area 20,000 sqm
Status Under construction
Solidere continues to develop real estate
projects within its strategy to create a vibrant
city center and also with the objective to
secure a regular income stream from this
successful activity. In addition to Beirut
Souks, the Company is pursuing ongoing real
estate projects, including the Beirut
Waterfront Development, reviving some that
had been put on hold due to the 2006 war
and its political aftermath, and launching
new projects that span a variety of land uses.
Starting with its Saifi Village,
Wadi Abou Jamil and Zokak El Blatt projects,
Solidere created a booming residential
market in Beirut city center, which now
extends to residential clusters, mid- and
high-rise buildings in all new development
sectors of the city center. The Company is
continuing this activity by developing more
residential projects.
Having successfully put on the
market institutional and business office
buildings, Solidere is launching important
office developments to cater for major
international companies, which it considers
Beirut is now able to attract.
Finally, with Beirut becoming a
favorable visitor destination, Solidere is
embarking in tourist and hospitality projects
with special character.
BEIRUT WATERFRONT
DEVELOPMENT
In Sector D, immediately adjacent to the
marina, Beirut Waterfront Development is
under construction on 22,341 sq m of private
land, to offer facilities totaling 20,000 sq m
of floor area. The development, together
with the public space around the marina,
was designed by Steven Holl Architects (US),
with Nabil Gholam Architecture and Planning
as associate architect.
The project is undertaken by Beirut
Waterfront Development s.a.l. (BWD), a 50-
50 joint venture between Solidere and Stow
Waterfront Development s.a.l. (Stow). BWD
was capitalized with Solidere contributing
in kind 20,000 sq m BUA on 22,341 sq m
of land, and Stow contributing in cash
US$31.6 million.
The facilities include a town quay
of waterside restaurants, cafs and shops,
and a yacht club with apartments on upper
floors. In addition, a harbormaster, customs
and immigration building will be erected on
public domain.The project is expected to be
gradually inaugurated starting spring 2011.
Concept Located around Beirut Marina in the
heart of the city center, the site for the
Beirut Waterfront Development extends the
existing corniche along the seashore into
a series of overlapping platforms. The
corniche is inflated to create an 'urban
beach', with levels subtly articulated to
provide outdoor spaces with public areas
for artwork.
The concept takes shape from
strata and layers in forking vectors. Like the
ancient beach that was once the site, the
planar lapping waves of the sea, inspires
striated spaces in horizontal layers, as
distinct from vertical objects. The horizontal
and the planar become a geometric force
shaping the new harbor spaces.
The form allows the separate
levels to define the organization of public
and private spaces including apartments,
yacht club, public facilities, harbormaster,
restaurants, and specialty stores. The
syncopated rhythm of platforms is achieved
by constructing the overall curve of the
corniche in five angles relating to five
reflecting pools. Due to variations in height
along the corniche, the platform levels and
pools vary slightly in height allowing quiet,
gravity-fed fountains to connect each pool
level. In accordance with Master Plan
requirement, the Beirut Marina and its
waterside restaurants will eventually be
linked to the Hotel District pedestrian
corridor by footbridge across the corniche.
Design The design submitted by Holl in
August 2004 was gradually amended
following BWD and Solidere comments.
The project is integrated into the city center
through direct access to the corniche
promenade to the north, waterside city park
to the east, and a pedestrian bridge over the
corniche to the south providing access to the
town quay restaurants and shops. Landscape
designs were developed for the entry plaza,
the quayside and the extension of the
corniche sidewalk above, creating open-air
terraces in the form of a stone beach over
the restaurants and shops.
Apartment building and yacht club On the
northeastern side of the development,
on lot 1456, is the main building totaling
14,000 sq m of floor area, accommodating
yacht club, together with furnished and
serviced apartments over four floors plus
three basements.
The design-and-build tender
for underground structural work and
construction of the basement floors, was
won by the Houri - Profond joint venture,
based on the design endorsed by Soltanche
Bachy group (France). Profond were in
charge of the shoring diaphragm wall, piling
and dewatering; Houri of excavations and
construction of slabs and columns. A fast
track approach was adopted, using up down
construction based on a technology specific
to underground construction below sea level,
which may be applied throughout the
waterfront district. The works were
completed in March 2009. As per their
contract, Houri - Profond should continue
the dewatering for the next six months after
underground structural work completion,
and until the beginning of superstructure
construction.
BWD conducted negotiations with Houri
regarding upper floor construction. After
obtaining the relevant building permits,
construction started in May 2009 and the soft
opening is expected to be completed by early
2011. Nabil Dada was entrusted with the
interior design. In addition to the yacht club,
lot 1456 accommodates 53 one-, two- and
three-bedroom furnished and serviced
apartments, of which 11 apartments are to be
retained by BWD and operated by a third-party
operator. The other apartments will be sold.
Quayside restaurants strip The quayside
restaurant strip on the southern side of the
development, on lot 1455, comprises
26 restaurants and shops totaling 6,000 sq m
of floor area. Stretching along Beirut Marina,
from the sites western limit to the main
building on the east, the one-floor
construction remains below sea corniche
level, with the roofs forming a continuation
of the corniche.
The shoring permit was obtained
in May 2008. DMR (US), with a Turkish
contractor, won the tender for enabling
and ground stabilization works which
were completed in April 2009. The building
permit is currently being sought from the
Municipality. BWD have tendered the
superstructure works and are in the process
of reviewing the bids. Completion of the
development is targeted for early 2011.
BWD had commissioned
restaurant consultant Ulysses (France)
to conduct a market study to select an
optimal type and size mix for the quayside
restaurants, as well as establish a typical
rental agreement.
Phasing issues The lot 1455 quayside
restaurants strip will be finished ahead of
the apartment yacht club building on lot
1456, and is to be delivered upon completion
of the parking currently being built by
Solidere near the Beirut Waterfront
Development project. This underground
public 500-car parking will primarily serve
the marina. It is very crucial to finish the
parking before delivery of the lot. The
pedestrian bridge linking Beirut Marina to
the Hotel District has been postponed.
Solidere Annual Report 2008

Following its initial attempts to restore Le

GRAND THEATRE BOUTIQUE HOTEL BOUTIQUE HOTEL
Grand Thtre des Mille et Une Nuits into a
LOT 1338 MINA EL HOSN
significant modern-day theater, Solidere
Solidere is developing established that this would not be possible
around the Grand Thtre without the practical demolition of the In developing lot 1338 Mina El Hosn,
an integrated project on building and its reconstruction. Even so, Solideres initial thoughts of creating there
the 2,370-sq m lot 891 some site constraints would have made a fifth retail anchor to complement Beirut
Bachoura, which have it difficult to achieve a world-class Souks have evolved towards a hospitality
regrouped the former lot performance theater. This is due to land use, together with retail and
891 historic building, lot numerous factors including the small size entertainment, thus complementing rather
870 building and vacant of the auditorium and stage, the shape and than competing with the Beirut Souks.
lot 1521. "The building volume of the auditorium shell, inappropriate The program envisaged is a
epitomizes the inclines for the seating, lack of backstage boutique hotel complex for targeted
multifunctional urban facilities, poor sight-lines and poor customers, business and leisure visitors,
building; since its acoustics; the narrow site, etc. It was thus including a hotel of around 9,000 to
conception and decided to annex adjacent lots to the theater 10,000 sq m, an exclusive spa of around
construction, it housed a proper in order to provide any future facility 2,500 sq m, and a complementary retail
theater, a hotel, apartments, offices, and with all the support spaces it may require. component of around 3,000 to 4,000 sq m.
many shops distributed among basement, Whilst the volume itself may not Solidere is in the process of
four stories from ground level, and a roof necessarily serve as a conventional theater, preselecting the international architects
floor. At street level, fourteen shops are Solidere was very concerned to restore it in who will be invited to bid for the design.
found in total, ten on Syria Street and four on order to preserve and honor the memory of A retail strategy study has been conducted
Amir Bachir Street. They were mostly the Grand Thtre. The restoration of the by MXD Consultants (Canada), to guide
bookshops and used the basements for main faades was carried out, together with configuration concepts relating to the
storage. In the original design, the eastern some strengthening works to the footings. boutique hotel, Patriarch Hoyek Street
side of the building had a hotel on two floors, The original concept design by Architecture and Beirut Souks. Talks have been held
accessible from Syria Street. Except for the Studio (France) obtained approval from the with international boutique hotel operators.
theater located in the core and the rear of Higher Council for Urbanism in April 2005.
the southern side, the rest of the building It offered a total floor area of 11,850 sq m
offered apartments of various sizes for rent. over four floors and five basements: a
By the 1960's, they were mostly transformed boutique hotel enjoying a roof swimming
into hotel rooms or into offices." pool, restaurants and bars offering artistic
(George Arbid, The Grand Thtre, an all- performances, and shops at street level
inclusive building.) below the arcades.
Solidere is envisaging a change
76 in design and is running a limited design
competition in order to pre-select architects,
hoping to launch the design by the end of
summer 2009. The program is still a luxury
top the Grand Thtre in its context boutique hotel. As per the Master Plan,
bottom panoramic elevations a maximum BUA of nearly 12,000 sq m is
allowed, with a maximum height of 25 m
(ground with mezzanine plus four upper
floors). Interior designers will be selected
at a later date. Talks have been held with
international boutique hotel operators.

Amir Amine Street Syria Street Amir Bachir Street Alexi Boutros Street Amir Amine Street
Solidere Annual Report 2008
LOT 800 MINA EL HOSN
In Wadi Abou Jamil, Solidere initiated the
design and implementation of predominantly
residential clusters of various sizes, involving
restoration and infill construction. The use of
this typology on the city scale, in combination
with detailed and individual residential
buildings, is meant to reinforce urban
integration. International and Lebanese
architects, with experience in Mediterranean
and Middle Eastern countries, contributed
design concepts reflecting responsiveness to
local context, culture and climate, and the
market interest led to the sale of practically
all the properties with cluster concepts.
Owned by Solidere, lot 800
Mina El Hosn is a triplet designed by Ayman
Senyora, combining restoration and new
construction. The 4,234 sq m floor area
comprises two twin restored Levantine
houses plus an infill building, with four floors
each, located between two streets, a lower
entrance street and Rue de France. The infill
building, designed in a similar style but with
two basement floors linking the three
buildings and providing parking space to
serve the entire triplet, has obtained a
building permit, with earthworks completed
in 2008. Civil works started in April 2009,
completion is scheduled for mid 2011.
78 178 SAIFI VILLAGE
The success of Saifi Village led Solidere to
initiate concepts for its extension. 178 Saifi
Village is a residential cluster designed by
Nabil Gholam on 2,937 sq m of land to offer
about 11,225 sq m of residential and
1,066 sq m of commercial floor space.
The cluster is formed by six
elegant buildings with clean modern faades
along surrounding streets, set around a
landscaped courtyard. The design offers a
range of spacious apartments to include
lofts with 5.75 m high ceilings, mini lofts with
work live space, ground floor maisonettes
with private gardens, central hall apartments
and a variety of penthouses with generous
terraces, while the building opening on the
ring road offers modular office platforms,
with a restaurant on the ground floor and
mezzanine. The scheme focuses on a
contemporary lifestyle, bringing a blend of
services, convenience and a discreet sense
of luxury. Space, light, calm and comfort
characterize the townhouse-like residential
units, combining the advantage of a great
urban location with the pleasure of a quiet
green haven in the heart of Beirut. Earth
works are due to start in June 2009.
OFFICE BUILDING, LOT 1493
MINA EL HOSN
Solidere is launching on lot 1493 Mina Hosn
(block 20-2) the design of a grade A multi-
tenancy office building. The site is located in
the Hotel District, with residential towers in
proximity and a central green landscaped
corridor that overlooks Beirut Marina and
the Mediterranean Sea to the north. A
highrise, cutting edge development with
exceptional architectural design, the project
will feature an intelligent building in a prime
location, with a high level of accessibility,
ample parking, flexible floor plates
designed with international best practice
specifications, offering functional daylit office
space and a wide range of amenities. These
will be planned to appeal both to the tenants
and to neighboring residents.
The office of Jones Lang LaSalle
has just completed the market research and
development advisory. Solidere will launch
the conceptual design process in July 2009
with the selected international architect.
SERVICED APARTMENT BUILDING
LOT 1408 MINA HOSN
In line with its policy to enhance hospitality
services in Beirut city center, Solidere is
developing a serviced apartment building on
lot 1408 Mina Hosn (block 9-6).
Designed and implemented to the
best international standards, the project will
carry the Solidere brand, offering comfort,
competitive services and high value
amenities to its clientele.
The Company has commissioned
Jones Lang LaSalle to undertake market
research, assess comparable developments
in Europe and the region, and prepare a
development advisory for the project. Axel
Schultes, the selected international
architect, will then proceed with the
conceptual design.
HOSPITALITY MANAGEMENT
Solidere aims at enhancing vibrancy in the city
center, at least to the levels achieved in the
early 2000s. This is in response to the general
slowdown of organic activity since the 2005
and 2006 tragedies and their aftermath, with
consequent suffering in quality.
Now that Beirut has become
again an attractive destination for local, Arab
and foreign visitors, the Company intends to
create a sustainable level of activities and
to upgrade hospitality facilities and services,
by encouraging the establishment of high-
end restaurants, cafs, boutique hotels
with retail outlets.
Looking at this matter in all its
aspects, Solidere has also decided to engage
in Hospitality Management as a revenue-
generating activity. The Grand Thtre and
Lot 1338 Mina El Hosn boutique hotels with
their facilities are among projects that will
quickstart this evolution.
FUTURE PROJECT: BEIRUT CITY
HISTORY MUSEUM
Solidere has proposed the construction of a
Beirut City History museum on a significant
archeological site north of Martyrs Square,
where excavation in the mid-1990s
79 unearthed such major finds as the
Phoenician Tell, Bronze Age city gate and
other features from Persian, Hellenistic,
Byzantine, Medieval and Ottoman periods.
In 1997, Solidere commissioned
Michel Macary (France) to undertake a site
planning study of the Tell and to explore the
concept of a Site Museum. Macary was
chosen for his expertise in cultural projects,
in particular his design work for the
Louvre extension with underground galleries
incorporating excavated elements of historic
structures. In conjunction with Solidere,
Macary completed the concept design of
a 9,300 sq m museum due to incorporate
the sites archeological findings and
envisioned, with Directorate General of
Antiquities (DGA) approval, as an outreach
of the National Museum.
In order to protect and safeguard
the site while providing the necessary vehicle
and pedestrian access in what is a heavy use
environment, Solidere commissioned Dar
Al-Handasah to study three route options, in
coordination with DGA, and to carry out the
detailed design of the most appropriate
option. The chosen one incorporates a two-
way road and bridge structure on the east
side of the Tell, with additional underpasses
to be dug beneath the road to ensure
pedestrian connections to the museum.
It will be a complex underground structure,
with its roof terrace serving as a viewing
platform at the level of Martyrs Square,
overlooking the ancient Tell. The museum is
closely integrated with the design of the
Martyrs Square parking structure and the
Petit Srail remains, and with the public
space landscaping of Martyrs Square and
the Tell site.
Because of Michel Macarys long
association with the project, it is Solideres
recommendation that he should carry out
the detailed design of the museum, in
coordination with Dar Al-Handasah and with
the winning team of the Martyrs' Square Axis
international design competition. Solidere
would be pleased to manage the design and
construction process for the museum on
behalf of the Ministry of Culture, reporting to
the DGA.
Solidere is also coordinating with
developers of properties adjacent to the
museum, some of whom have professed a
desire to support the museum by making
either design amendment to their own lots,
or possibly providing their own land for
various museum functions.
The City History Museum will be
the point of origin of the Heritage Trail, a
circuit connecting all main archaeological
sites and heritage buildings and extending
the museum out into the city itself. The full
extent of Beiruts urbanized area, from its
Bronze Age origins to the 1830s, lies within
the boundary of the present-day city center.
Evidence of past urban layers is there for all
to see. It is the ideal place to tell the story
of the history, growth and development of
Beirut from ancient times to the recent past.
The first phase of the Heritage Trail is being
implemented by Solidere in coordination
with DGA.
Two other site museums are
located in the city center, both on Nejmeh
Square. The recently restored Crypto Portico
museum, beneath the Deputies office
building, features part of the site of the
Roman Forum, at the original level of the
ancient city. In this section of the principal
street, an omphalos (round granite block
representing the navel or exact center of the
city from which all distances were
measured) sits against a backdrop of a
series of blind arches that once lined the
street, complete with its original checkered
black and white tiling pattern. The museum
is not opened to the public. The Byzantine
church site museum, in the crypt beneath
St George Greek-Orthodox cathedral, is
under restoration and should be opened to
the public upon completion.
Solidere Annual Report 2008
SALE AND
RENTAL
STRATEGY
Solidere's strategy is to stimulate high
quality real estate development in the city
center. Its support to investors has expanded
in the last years to cover project design and
development. In addition to providing
development briefs based on sector plans
and adapted to project sites, the Company
commissioned Lebanese and international
architects to prepare concept designs for
a number of lots, with obvious benefits for
prospective buyers, to whom Solidere
sometimes sells land with a real estate
program, architectural design and even
a development package.
As land bank with a considerable property
portfolio, Solidere markets a wide range of
land and built space for residential, office,
hotel, retail and other specialized uses. In
the early years, sales mainly involved un-
built lots and existing buildings sold 'as is'
for renovation or development. The delivery
of Solidere real estate projects led to a
growing volume of sale and leasing
operations involving finished products,
Sales revenues rose, sustained by a
new or preserved buildings or parts thereof.
substantial sales backlog. Many projects,
Since 2005, the Company has
some of important proportions, were
been holding on to its portfolio of finished
pursued, regional investors continuing to
products, leasing space in it to generate
give strong indications of interest in Beirut
income flows, and will continue to do so in
city center. This was evidenced by a strong
the foreseeable future as part of its revenue
pick-up of negotiating activity at the end of
diversification strategy. Solidere actively
the year. Rental activity maintained its
supports developers and monitors the
healthy pace due to continuing demand for
demand and supply of real estate in the city
quality space and services.
center, to the benefit of all.
In any given year, the sales
recognized in the income statement consist
of closed deals negotiated in that year and in
preceding ones. On the other hand, the deals
negotiated up to that year and not closed
during the year make up the sales backlog at
year end. Aggregate sales of US$1.93 billion,
have been recognized from inception to end
2008 (1,577,456 sq m of floor space) of which
US$257 million (120,847 sq m) in 2008.
SALES RESULTS
Gross land and real sales of US$256.6
million were recognized during the year 2008
(US$288.5 million in 2007). Solidere has
stopped selling finished products in order to
build a portfolio of income-generating
properties. Deals closed in previous years
and recognized in 2008 amount to US$8.5
million, representing 4,312 sq m of floor area
(US$7.7 million, 3,979 sq m in 2007).
At end 2008, the backlog of sales
not recognized during the year amounted to
US$605.5 million (278,289 sq m BUA). Also in
the backlog are US$1.7 million (955 sq m
BUA) of apartments for which title transfer is
awaiting occupancy permits as the lots need
final parceling.
Downpayments received on
signed sales deals as at end 2008 amount to
US$229.7 million. Downpayments are treated
as deferred revenues, to be recognized as
part of revenues only upon sales realization.
REAL ESTATE LEASING
Solideres portfolio of income-generating
properties includes UN House and lot 1
Zokak El Blatt, each leased to a single
institutional tenant, and a compound
dedicated for embassy use. The Company
also leases space in its buildings, in car
parks and mooring spaces in Beirut Marina.
At end 2008, the value of leased properties
was US$240 million (US$216.8 million after
depreciation): US$180 million in buildings,
US$56 million in land and US$4 million in
other assets.
Gross rental income from leased
space, including parking spaces and marina
berths, was US$21.7 million, against US$7.5
million, US$10.2 million, US$14.1 million and
US$15.4 million in 2000 to 2003; US$18.6
million, US$20.8 million and US$20.7 million
in 2004 to 2006, and US$20.8 in 2007.
Downpayments received on
lease agreements are treated as deferred
revenues and not recognized as income.
Residential leases relate to new and
restored flats in Saifi, Zokak El Blatt and
Wadi Abou Jamil. Leased office space relates
to UN House, lot 1 Zokak El Blatt and the
embassy compound. Other commercial
space relates to offices and shops in
restored buildings, as well as shops in
Saifi Village.
SALES PROCEDURE / PAYMENT
SCHEMES
A sale agreement which includes pre-
development and construction standards
and timetables, as well as payment
conditions, is signed upfront. Sales are
expressed in terms of floor or built-up area
(net development rights).
Solidere pursued in 2008 its
policy of offering buyers the possibility to
either pay cash or defer part of the sale
price payment. Financing 75% of the land
sales value by Solidere from its own equity
continued, following the standard formula
on the basis of four equal maturities carrying
interest at LIBOR plus a margin of 2.5% with
a floor.
Property transfer is registered
before the Real Estate Registrar upon
signing the final sale deed, following
fulfillment of technical and legal conditions,
together with the mortgage contract in case
of finance. Concomitant with the property
transfer registration, the buyer / developer
provides Solidere with a first-degree
mortgage on the sold property as guarantee
against any outstanding payments. A bank
guarantee also provides security for proper
and timely execution of all constrution
works.
Solidere Annual Report 2008

UN House, lot 1 Zokak El Blatt and most of

PROPERTY MARKETING
the embassy compound. In the Maarad and
Foch-Allenby restored office buildings, 21
The Company has been successful in lease agreements for 9,881 sq m, as well as
marketing its residential, commercial and 17 lease agreements relating to 3,631 sq m
institutional space, new and restored. As of retail space, had been signed.
alternatives to a simple lease, schemes such
as lease with option to buy or outright sale
were offered for residential space until 2002
and 2004 respectively. Buyers could also PROPERTY MANAGEMENT
benefit from payment facilities. From 2005,
property sales or options to buy were
Solidere provides complete full-time
discontinued, with no outstanding options
property management, operation and
to buy since end 2007, and only leases
maintenance services for all its properties.
continuing to generate income flows.
These include the new and restored
From the 136 Saifi Village
buildings, the Beirut Souks, Weygand Street
apartments, totaling 30,697 sq m of floor
and block 93 car parks. In UN House,
area, 133 apartments had been marketed by
electro-mechanical and civil works are
end 2008, of which 37 (7,176 sq m) are
provided as per an operation agreement with
leased and 96 (22,558 sq m) were sold, 61
ESCWA. Extending its services to other
(13,279 sq m) after exercising options to buy,
property owners, Solidere signed
while three apartments (592 sq m) were
agreements for the marketing of several
available for rent. Concurrently, from 40
third-party properties, prior to undertaking
restored houses or flats in Saifi, totaling
their management and maintenance.
9,145 sq m in floor space, 39 agreements
The Company is currently offering
had been signed at year end. They represent
such buildings the following services:
4,268 sq m of leases and 4,684 sq m of sales,
technical maintenance, cleaning, safety,
of which 4,024 sq m as a result of exercising
security and the maintenance of landscaped
options to buy, with one apartment (193 sq m)
areas; marketing, lease management,
available for rent. Lease agreements had
including drawing up budgets, arranging
also been signed for a nursery (240 sq m)
insurance, collecting rents, preparing assets
and for 39 shops (3,982 sq m), as part of
inventories, subscribing to utilities, tackling
Quartier des Arts.
co-ownership issues, and paying real estate
In Zokak El Blatt, 87 apartments
and municipal taxes. Solidere expects to
with 16,135 sq m of floor space, had been the
84 subject of agreements at year end. They
derive increasing revenues from property
management services in the coming years.
represent 12,670 sq m of leases and
2,854 sq m of sales, of which 979 sq m as a
result of exercising options to buy, with two
apartments available for rent (611 sq m). In
FUTURE PROSPECTS
Mina El Hosn, 20 agreements for 6,608 sq m
of residential floor space had been signed:
1,205 sq m as leases and 3,060 sq m as Solidere is firmly relying on growth in its
sales, of which 1,971 sq m as a result of rental income as it steps up the delivery of
exercising options to buy, with eight new and restored buildings. Rental revenues
apartments available for rent (2,343 sq m). will be strongly boosted by the delivery of
Also at year end, the Company had five lease Beirut Souks, by far the most important
agreements totaling 33,630 sq m Solidere real estate project and its flagship
of floor space in new office buildings: commercial development.

top and opposite Elie Saab Haute Couture, Chakib Richani

Solidere Annual Report 2008

A floor area of 2.48 million sq m has been so

DEVELOPERS far the subject of development by third-party
developers, of which 1.85 million sq m are
in new construction. Of these developers'
PROJECTS projects, 870,309 sq m were completed,
458,765 sq m are under construction or
restoration, and the balance is in various
stages of development.

CITY CENTER SOUTHERN GATEWAY

The Landmark multiuse development,

designed by Jean Nouvel (France) on lot
1520 Bachoura, is still under design. The
project offers 74,412 sq m distributed over
a tower of 42 floors including 27 floors for
a five stars hotel, 240 ro.48 suites, and
15 floors for residential apartment tower
overlooking Riad El Solh Square; and two
ten- and twelve-floor buildings containing
apartments, offices, retail, and a cinema
entertainment complex at basement levels.
Lot 739 Bachoura is the site of
the House of Arts and Culture being
developed by the Ministry of Culture to
offer 8,000 sq m of floor area devoted
to education, culture, interactive and
multidisciplinary exchange. The site is to
become State property as part of a property
swap with Solidere. The ministry
commissioned Gaia-Heritage to develop
the concept for the House, its cultural
and educational objectives, architectural
program and communication strategy.
Following an international design
competition, the project is under design by
the winner Alberto Catalano (Italy). The
winner project was selected for its "modestly
urban and human scale, invested with a
modern functionality appropriate to Beirut's
emerging new identity." The project funding
is a grant by the Sultanate of Oman to the
Ministry of Culture.
Solidere Annual Report 2008
FOCH-ALLENBY
In Marfaa cadastral zone, Fochville
residential building, designed by R & K
Consultants on lot 1497 has been completed
to offer 5,841 sq m over nine floors,
12 apartments and one duplex with retail
on ground floor. Also completed, Foch
Residence, designed by Batimat Architects
on lot 1466, to offer 5,012 sq m over nine
floors, 10 flats and two duplexes.
Two buildings are under
restoration: the Municipality Annex on lot
243, as per Nabil Azar design, with
5,478 sq m distributed over three floors; and
Groupe du Moyen Orient Hotel on lot 1144,
as per Joe Chehwan design, with 2,815 sq m
distributed over five floors.
Six developments are under
construction: three residential buildings,
two office buildings and one furnished
apartments building. Lot 108, developed by
88 Banque du Crdit Libanais and designed by
Erga Group, offers 3,149 sq m over five
floors, five flats; Beryt Lebanon building,
designed by Erga Group on lot 1468, offers
7,384 sq m over nine floors, 26 flats; and
Foch 94 residential development, designed
by Vincent Van Duyssen (Belgium) and Nabil
Gholam on lot 1498, offers 7,320 sq m over
nine floors, 29 flats. Radium office building,
designed by R & K Consultants on lot 114,
offers 2,600 sq m over five floors; Bank of
Kuwait and the Arab World, designed by
Abdel Wahed Al Wakeel (Egypt-UK) and Arc
Group on lot 1470, offers 8,300 sq m over
eight floors; Starway furnished apartments
building, designed by Nachaat Owaida on
lot 1440, offers 3,000 sq m over six floors,
26 flats.
top Foch Residence, residential development, lot 1466 Marfaa, Batimat Architects
Fochville residential development, lot 1497 Marfaa, R & K Consultants
Radium office building, lot 114 Marfaa, R & K Consultants
Banque du Crdit Libanais residential building, lot 108 Marfaa, Erga Group
right Saifi Village Two, residential development, lot 146 Saifi, Nabil Gholam
opposite Le Gray hotel, lot1489 Marfaa, Kevin Dash and Hani Murad
SAIFI
Saifi Khan, a residential project on lots 749
and 752, has been restored as per Elias
Issa's design. The lots respectively offers
783 sq m and 3,467 sq m of loor area
distributed over two and five floors with
retail on ground floors.
Lakis-Majesty residential building
is being restored as per Fadi Najem design
on lot 735 to offer 4,630 sq m distributed
over six floors, 11 flats.
Two residential developments
are under construction. Saifi Village Two,
designed by Nabil Gholam on lot 146, offers
22,350 sq m distributed over four buildings
of 11 floors each, 74 flats; 1079 Real Estate,
designed by Youssef Haidar on lot 1079,
offers 3,358 sq m distributed over six floors,
10 flats.
Under study at the Municipality
are an office building, three residential
developments and a private residence.
Al Mashrek Insurance Company building
designed by Nabil Azar on lot 1080 offers
2,300 sq m distributed over seven floors. The
Selwan building, also designed by Nabil Azar
on lot 1056, offers 2,350 sq m distributed
over five floors, 14 flats; Saifi Square and
Al Mada, designed by Nabil Gholam on
lots 1059 and 1068, offer 5,115 sq m and
6,350 sq m distributed over seven floors,
16 flats and 17 flats respectively; the lot 749
component of Saifi Khan, designed by Elias
Issa, has 783 sq m over three floors with 89
retail on ground floor.
The Ministry of Foreign Affairs,
on lot 1076 Saifi, is under design by Abdel
Wahed Al Wakeel and ARC Group to offer
12,980 sq m of office space.
Solidere Annual Report 2008
MARTYRS SQUARE AXIS NORTHEAST
SECTION
In Marfaa cadastral zone, Merit Corporation
headquarters building, designed by Nabil
Gholam on lot 1536, is under construction
with 6,034 sq m of floor space over six floors.
The Phoenician Village is a high-
density, mixed-use landmark project under
development by Kuwaiti Investors Group led
by Al Sayer Group and Al Dhow Investment
Company. Spread over lots 1501, 1502, 1503
and 1081 Marfaa, it offers 205,735 sq m of
floor area, thus constituting the city centers
largest real estate development to date. The
urban design for the site, as adopted in the
Beirut city center Master Plan, is based on
the Koetter Kim (US) planning study, updated
according to the new envelope controls
incorporated in the Master Plan amendment
for Sector H. The development contains four
towers, stepping in height to a 160 m
maximum, and comprises visitor attractions
and cultural facilities, upscale residential,
hotel and major corporate office
opportunities around a central active plaza,
with retail on ground level. A pedestrian
bridge across Trieste Street will connect the
towers to the waterfront component of the
project on the Beirut port first basin
quayside. The development is planned to
create an important visitor destination.
Beirut Harbor, on lot 1504, will
offer an office building covering 5,186 sq m
offloor space; the architect is not assigned yet.
MARTYRS SQUARE AXIS NORTHWEST
SECTION
In Marfaa cadastral zone, two residential
developments overlooking the Tell
archeological site are under study at Beirut
Municipality. Marfaa 1474, designed by Axel
Schultes (Germany) and Kamal Homsi
Architects on lot 1474, offers 8,270 sq m of
floor space distributed over nine floors,
28 flats; Marfaa 94, designed by Machado
and Silvetti Associates (US) and Charles
Hadif on lot 1538, covers 12,700 sq m
distributed over 10 floors, 22 flats.
Park Side mixed-use development
on lot 1475, will offer 6,500 sq m of floor
space; the architect is not assigned yet.
MARTYRS SQUARE AXIS MID
SECTION
Le Gray hotel, under finishing, was designed
by Kevin Dash (UK-Australia) and Hani Murad
on lot 1489 Marfaa to offer 17,635 sq m over
eight floors, 87 rooms and suites with areas
ranging from 40 to 220 sq m; the hotel is to
include a commercial center of 5,400 sq m
distributed over three floors. The Beirut
Gardens residential development, designed
by Arata Isozaki (Japan) and Erga Group on
lot 1524 Marfaa, is under study at Beirut
Municipality. It offers 18,325 sq m over
12 floors, consisting of 59 flats and six
duplexes, 65 units in all. The faades
overlooking the Garden of Forgiveness and
Martyrs Square are covered by a white
marble skin treated as a screen with a
computer-generated geometric pattern,
giving a three-dimensional impression.
MARTYRS SQUARE AXIS
SOUTH SECTION
The Beirut Gate landmark development
covers 21,448 sq m of land area spreading
over lots 1523, 1525, 1542, 1544, 987, 1526,
1477 Bachoura and lot 901 Saifi. Several
world-class architects worked in tandem to
design the project components for Abu Dhabi
Investment House, ADIH, as development
manager. Out of a 167,200 sq m total floor
space, the residential use represents 78%,
offices 6%, retail and cultural activities 16%.
Four projects are under study at
Beirut Municipality. Beirut Gate - Tower Plus
One and Tower Plus Two, designed by
Architectonica (US) and Erga Group on lots
1525 and 1542 Bachoura, offer 13,600 sq m
and 14,200 sq m distributed respectively over
13 floors, 44 flats, and 14 floors, 49 flats,
with retail on street level. Lot 1544, designed
by the same architects, offers 15,000 sq m
distributed over 13 floors, 49 flats. Lot 1523
Bachoura, designed by Nabil Gholam, offers
37,000 sq m over 13 floors, 166 flats.
Still under design are lots 987,
1526 and 1477 Bachoura, designed by
Christian de Portzamparc (France). Lot 987,
former Dome City Center site, offers
39,000 sq m over three towers with up to
21 floors, and is planned to incorporate a
contemporary cultural use within the
preserved Dome. Lot 1526 offers 26,000 sq m
over 10 floors. Lot 1477 offers 22,400 sq m
over 25 floors. Also under design is lot 901
Saifi, designed by Erga Group with
11,200 sq m over 13 floors.
The Greek partnership
Agorastidou, Babalou-Noukaki, Ioannidou
and Noukakis, winners of the Martyrs
Square axis urban design competition, are
the Beirut Gate landscape architects.
Immediately north of Beirut Gate,
the Canadian Bank headquarters building is
under study at Beirut Municipality; designed
by Axel Schultes on lot 1524 Bachoura, the
development offers 7,800 sq m of floor
space over eight floors, with retail on the
ground floor.
opposite Smiramis mixed-use development, lot 1458 Marfaa, Robert
Adam, Fouad Hanna and Fadlallah Dagher
Solidere Annual Report 2008
left to right Hilton Hotel, lot 129 Mina El Hosn,
Butec and Atelier des Architectes Associs
Medgulf office buildings, lots 1348 and 1349 Mina El Hosn,
Nachaat Owaida
Berytus Parks office building, lot 1344 Mina El Hosn,
Pierre El Khoury Architects
NEAR THE BEIRUT SOUKS
The Hilton Hotel, designed by Butec and
Atelier des Architectes Associs on lot 129
Mina El Hosn, has been completed to offer
11,137 sq m of floor space distributed over
eight floors, 200 rooms and suites, with
retail on ground floor. Also completed,
Smiramis mixed-use development on lot
1458 Marfaa, designed by Robert Adam (UK)
with Fouad Hanna and Fadlallah Dagher,
offers 7,750 sq m distributed over eight
floors, 11 flats.
Two buildings are under
restoration. The Makassed Association office
building on lot 448 Marfaa, being restored as
per Wissam Jabr design, has 3,682 sq m
distributed over seven floors. Medawar-
Merheb retail building on lot 16 Marfaa,
being restored as per Pierre Neema design,
has 415 sq m distributed over two floors.
Three residential buildings are
under construction, Mina Two mixed-use
building, designed by Kevin Dash and R & K
Consultant on lot 2, offers 14,000 sq m
distributed over seven floors, 15 flats;
45 Park Avenue, designed by Laceco on
lot 1337 Mina El Hosn, offers 7,150 sq m,
distributed over 12 floors, 12 flats; Luna One,
designed by Diyar Consultants on lot 1331,
has 2,723 sq m distributed over seven floors,
10 flats.
Under study at Beirut Municipality
is the Park Palace residential building,
designed by Fouad Menem on lot 1339 Mina
El Hosn, with 12,790 sq m distributed over
10 floors, 24 flats.
Three residential developments
are under design. Media Fan, designed by
Joe Geitani on lot 1347, with 6,351 sq m of
floor space; Avenue Venture, designed by
LAB Architecture and Associates (Australia)
and Batimat on lot 1450, with 7,300 sq m;
and Block 42 development, designed by
Victor Legorreta (Mexico) and Fadlallah
Dagher on lot 1495 Marfaa, with 13,493 sq m
of floor space.
WADI ABOU JAMIL
In Wadi Abou Jamil, cadastral zone Mina
El Hosn, seven residential buildings, three
private residences and two office buildings
are under construction.
Mira Immobilire on lot 1478,
designed by Erga Group offers 3,624 sq m
distributed over six floors, three apartments
and one duplex; Phoenix building, designed by
Porphyrios Associates (UK-Greece) and Samir
Khairallah & Partners on lot 1440, offers
4,117 sq m distributed over seven floors: six
apartments and one duplex; Wadi Hills on lot
1388, designed by Agence dArchitecture
Antoine Bechu (France) and Nabih Sinno,
offers 22,000 sq m distributed around an
internal garden over seven buildings of six
floors each, 68 flats; Wadi Gardens, designed
by Dar al Omran (Jordan) and Hani Murad on
lot 1392, has 25,769 sq m distributed around
an internal garden over six buildings of eight
floors each, 68 flats; Mina El Hosn 1466
residential development, designed by Fouad
Menem on lot 1466, offers 1,788 sq m
distributed over five floors, two duplexes and
a penthouse; The Courtyard, designed by
Maha Nasrallah on lot 1371, offers 5,280 sq m
distributed around an internal courtyard over
three buildings of seven floors each, 19 flats;
the works were delayed because of the
Roman Hippodrome archeological remains
found on the site; Stow Wadi, designed by
Porphyrios Associates and Nabih Sinno
on lot 1407, offers seven apartments
and two duplexes totaling 3,750 sq m over
seven floors.
Khaireddine private residence
on lot 771, designed and restored by Pierre
El Khoury Architect, has 2,073 sq m of floor
space; the private residence on lot 911,
designed by Abdel Wahed Al Wakeel (UK-
Egypt) and ARC Group, offers 1,595 sq m
of floor space; and the private residence
on lot 855, designed by Nabil Gholam with
1,250 sq m of floor space.
Greenline Real Estate, designed
by Batimat Architects on lot 1393, offers
2,750 sq m distributed over seven floors: two
for retail, three for offices and a duplex on
the top two floors. Cedar House and Pine
House on lot 1133 was redesigned by
Youssef Haidar to offer 2,750 sq m
distributed over three floors.
Under study at Beirut Municipality are a
residential development, a private residence
and a hotel. Al Karmah Real Estate on
lot 808, designed by R & K Consultants offers
1,464 sq m distributed over five floors, seven
flats. The private residence on lot 1375,
designed by Charles Hadifeh, offers
1,660 sq m of floor space. Designed by Ziad
Akl in collaboration with Philippe Starck
(France) on lots 834 and 1410, the Royal
Hotel and Resorts boutique hotel with 77
rooms and 50 suites offers a floor space
of 16,805 sq m, distributed over 12 buildings
of two, three or four floors.
Still under design are a bank
headquarters, an office building and a
residential building. Al Mawared Bank
headquarters is designed by Zaha Hadid
(UK-Iraq) and Raed Abillama on lot 1383,
to offer 8,080 sq m of floor space. Luna
Company on lot 1394 is designed by A
Practice to offer 4,084 sq m of floor space.
Wadi Mansions, on lot 1442, designed by
Porphyrios Associates and Nabih Sinno,
offer 4,200 sq m of floor space.
 Also under construction are an international
ZOKAK EL BLATT
hotel and an office building: the Grand Hyatt
Hotel on lot 111, designed by Michael Graves
Under restoration are two private residences and Dar Al-Handasah, with 32,122 sq m
and an office building: the Doghmosh, distributed over 17 floors, 443 rooms and
designed by Zahi Cardahi on lot 122, has suites in total with retail on ground floor;
1,336 sq m of floor space; Les Gradins, Stratum residential and furnished apartment
designed by Ziad Akl on lot 73, has 734 sq m building, designed by R & K Consultants on
of floor space; Diwan Al Mouhasabat office lot 1364 with 11,200 sq m over 10 floors,
building, designed by Fares Hajj on lot 647, 71 flats.
has 6,921 sq m of floor space. Two office buildings and three
The Pavilions residential residential developments are under study at
complex, designed by R & K Consultants on Beirut Municipality. Mika Real Estate office
lot 1128 and offering 10,312 sq m of floor buildings, designed by Joe Geitani on lots
space, is under construction. It combines a 1363 and 1487, respectively offer 10,831 and
three-floor private villa on Rue de France 8,866 sq m of floor space distributed over 10
with a nine-floor modern infill on Rue de floors. Cibico residential building, designed
lArme, consisting of 23 units: by Joe Geitani on lot 1488, offers 4,333 sq m
16 apartments, five duplexes and two distributed over 11 floors, 14 flats. Initially
triplexes. developed by Dubai Islamic Bank, DIB Tower
Two residential developments are and Town Tower were respectively designed
under design, Primtre Rue de France, by Michael Graves (US) and Ayman Senyora
designed by Abdel Wahed Al Wakeel on lot on lots 1399 and 1494 to offer 26,700 sq m
59, with a 4,200 sq m of floor space; and City and 26,500 sq m distributed over 25 floors,
Hill designed by Youssef Haidar on lot 1137, 49 flats. The new developer who acquired the
with 3,090 sq m of floor space. company intends to redesign the project and
to that effect has launched a limited
architecture competition among Stirk and
Partners (Richard Rogers, UK), Herzog & de
HOTEL DISTRICT Meuron (Switzerland) and Raphael Violi
Associates (Uruguay).
Still under design are one hotel
At the city center northwest gateway, Mina
and four residential developments with the
El Hosn cadastral zone, two towers
following floor areas: Rotana Hotel on lot
overlooking Beirut Marina were completed.
1369, designed by Architecture Studio
The Marina Tower complex, designed by Kohn
(France) and Erga Group, 21,155 sq m, the
Pedersen Fox Associates (US) and Dar Al-
hotel is to include 150 rooms and suites with
Handasah on lot 1354, includes Marina Tower,
50 furnished apartments; Trust Construction
with 27,343 sq m over 26 floors, 47 flats
on lot 1358, designed by Bolles and Wilson
ranging in area from 400 to 500 sq m; Marina
(Germany) and Arc Group, 17,800 sq m;
Gardens, with 8,427 sq m over 10 floors,
La Residence by Ivana Trump on lot 1396,
25 flats ranging from 300 to 350 sq m; and
designed by Valode et Pistre (France),
Marina Courts, with 9,079 sq m over 10 floors,
26,000 sq m; 1397 Mina El Hosn on lot 1397,
41 flats ranging from 100 to 250 sq m. Beirut
designed by Sir Norman Foster and Partners
Tower, designed by Wimberley Allison Tong &
(UK), 56,000 sq m; Avenue Venture on lot
Goo (US) and Samir Khairallah & Partners on
1450, designed by LAB Architecture and
lot 1401, has 42,458 sq m over 27 floors, 63
Associates (Australia) and Elie-Pierre
apartments, four duplexes, two penthouses.
Sabbagh Architects, 7,300 sq m.
An international hotel and four
high-rise luxury residential developments are
under construction. The Four Seasons Hotel,
designed by Dar Al-Handasah on lot 1418,
offers 27,761 sq m distributed over 25 floors,
234 rooms and suites in total with areas
ranging from 85 to 250 sq m. Platinum
Tower, designed by Ricardo Bofill (Spain) and
Nabil Gholam on lot 1421, offers 53,887 sq m
distributed over 34 floors, 70 flats; The Dana
of CCC, designed by Kevin Dash and
Al Salam Architects on lot 1353, offers
13,856 sq m distributed over 10 floors,
15 flats; Bay Tower on lot 1422, designed
by Wimberley Allison Tong & Goo (US)
and Samir Khairallah & Partners, offers
34,760 sq m distributed over 30 floors,
92 flats; Capital Plaza residential building
on lot 1464, designed by Machado & Silvetti
Associates and Nabil Azar, offers 14,102 sq m opposite Park View Realty residential development, lot 1355 Mina El Hosn,
distributed over 12 floors, 36 flats. Pierre El Khoury Architects
Solidere Annual Report 2008

SOLIDERE MANAGEMENT SERVICES

A number of developers residential projects

in Wadi Abou Jamil, cadastral zone Mina
El Hosn, are managed by Solidere
Management Services (SMS), a subsidiary
of Solidere. In addition to construction
management, SMS provides a broad scope
of services associated with real estate
development: program definition, marketing,
design control, client representation,
financial management, sales and post-
construction operation and maintenance.
Four residential developments
are under construction. Garden View on lot
1368, designed by Nabil Gholam, offers
13,778 sq m distributed over 11 floors,
34 flats; construction works are expected to
be completed by end 2009. Houri / Kreidy /
Tayyoun building on lot 1380, sold by the
initial owner to a new developer, was
redesigned by Charles Hadif to offer four
flats over five floors totaling 2,300 sq m,
with commercial space on street level;
construction works are expected to be
completed by July 2010. New Zone Real
Estate, designed by Tripod Architecture and
Nabih Sinno on lot 1477, offers 3,626 sq m
of floor area distributed over nine floors,
13 flats; construction works are expected to
be completed by September 2010. Noor
Gardens luxurious residential complex
comprise three clusters designed by
Porphyrios Associates (UK) and Malek
Mahmassani Architectural Practice - MMAP
on lots 1365, 1439 and 1395. Respective floor
areas of 4,420 sq m, 4,520 sq m and
3,601 sq m are distributed over seven floors,
with the two lower levels dedicated to retail
or commercial use, and the upper levels
offering 25 flats; construction works are
expected to be completed by December 2010.
Shoring and excavation works
have started on three projects still under
study at Beirut Municipality. Designed by
Giancarlo De Carlo and Associates (Italy) and
Rafic El Khoury on lot 1379, Beirut Square
offers 15,260 sq m distributed over four
buildings of six floors, 49 flats. The buildings,
along external streets, are arranged around
an interior space, divided into one common
and several private gardens. Eden Gardens,
on lot 1333, designed by LAB Architecture
and Associates (Australia) and Batimat,
offers 6,164 sq m of floor space distributed
over six floors, 13 flats. Property 709 Mina,
designed by Antoine Skaf on lot 709, offers
2,263 sq m distributed over seven floors,
seven apartments and one duplex
Designed by Giancarlo De Carlo
and Associates (Italy) and Rafic El Khoury on
lot 1370, Beirut Village offers 12,237 sq m of
floor space over three buildings of six floors
each, with 38 flats, set around a private
garden facing the Wadi Abou Jamil public
garden; construction works were delayed
because of the Roman Hippodrome
archeological remains found on the site.
Solidere Annual Report 2008

The Company continued repayment in 2008

TREASURY
CORPORATE
The consolidated balance sheet at year end
FUNDING, shows positions of US$292 million for cash
and cash balances; US$177 million for bank
overdrafts and short-term facilities; and
TREASURY US$5.9 million for investments in securities.
The Company maintained its
of the three loans used to finance land
reclamation works: the US$22 million locally
syndicated loan and the two parallel facilities
from Citibank N.A. totaling US$24.7 million
(US$14.7 million in export credit financing
with guarantee from the US Export-Import
Bank, and US$10 million as local facility
from Citibank Beirut), with respectively

AND policy of investing its liquid funds in assets

presenting minimum risk, and with top-
ranking banking and financial institutions in
US$1.34 million and US$1 million
outstanding at year end.

TREASURY the domestic and international markets,

including some structured products that
carry high returns with guaranteed capital. TREASURY STOCK
STOCK For efficient cash management, Solidere
also arranged with local banks certain
The share buyback program, launched early
revolving current overdraft facilities, utilized
in the year and targeting to acquire A and B
and refunded according to cash needs and
shares equivalent to up to 10% of the issued
availability.
capital, with a view to retire these shares
During 2008, Solidere made 547
and reduce capital accordingly, was
cash placements totaling US$3,576 million.
temporarily put on hold by the Company in
These figures include placements made in
favor of international expansion and local
2008, which matured in the same year or
developments.
will mature in the following year.
The 9.9 million treasury shares,
The Company pursued again
with a book value of US$168.5 million, served
this year a strategy of short-term cash
as a temporary financing instrument, using a
placements, with a weighted average holding
put and a call option with two local financial
period of about 36.91 days. Around 153 basis
institutions to generate US$170.3 million for
points were secured on average over the
meeting financing needs. The call option was
median 2008 three-month LIBOR rate.
exercised by the Company in August 2008 at
Interest income earned during the year
a price of US$182.1 million. The difference
on the aggregate cash placements was
represented the premium in lieu of interest
equivalent to an annualized interest rate
calculated at an average competitive rate.
of about 4.6%.
98

CORPORATE FUNDING

The strategy to reduce borrowing levels was

again pursued in 2008, utilizing growing
levels of liquidity generated from land sales.
Consequently, the bank debt level was
substantially reduced, from US$7 million in
2007 to US$2.3 million in 2008, representing
0.13 % in debt to equity ratio.
In 2008, the Company pursued
the practice of resorting to flexible short-
term credit arrangements, mainly temporary
overdrafts at competitive interest rates.
One new short term bank facility
was signed with a local bank in 2008, in
addition to two others signed with local
banks in 2007 and renewed in 2008.
The cash position at year end was
mainly due to collections of maturing
receivables from several previously signed
land sale deals, particularly the full
settlement of a major developers remaining
balance.
Solidere Annual Report 2008

EXCHANGE LISTINGS AND TICKER DIVIDEND DISTRIBUTION

SOLIDERE SYMBOLS
The annual general meeting of shareholders
SHARES Beirut Stock Exchange
Solidere A shares: SOLA.BY
held in July 2008 confirmed the Board of
Directors recommendation to distribute
Solidere B shares: SOLB.BY dividends of US$1.00 (US$0.95 after
AND GDRS London Stock Exchange
GDRs: SOLAq.L
deducting the compulsory 5% tax on
profit distributions) per share held, as per
the shareholders register at the general
meeting date. The distribution took effect
starting August 29, 2008. Of the dividends
ANALYSIS OF SHARE PRICES payable in the amount of US$147.3 million, A SHARES - DAILY TRADES
net of distribution tax in the amount
of US$7.75 million, approximately Share Price US$ Volume
Solidere shares started the year on a stable
US$122 million had been settled by
and subdued note, with investors remaining
December 31, 2008. 942,275 767,390 6,099,413
cautious as the local political crisis affected 40.0 500,000
the general mood. Throughout the first
quarter, the shares traded on low volume
within a tight band between the US$20 and 35.0 400,000
RESEARCH AND INVESTOR RELATIONS
US$22 levels.
The stock market was fired up 30.0 300,000
in May by the good news regarding the The Company pursued its investor relations
presidential elections. Investors jumped back efforts in 2008, participating in several
into the market, and Solidere shares financial, investment, business and real 25.0 200,000
benefited from this upbeat sentiment. estate conferences.
Concomitant positive news regarding the Solidere was invited to a series 20.0 100,000
Companys earnings, as well as the rise in of international investor conferences.
value of Solidere International shares by Presentations were made to a large number
15.0 0
about threefold their issue price, pushed of international investors and investment
Solidere shares forcefully up to an all time funds, many of which are already Solidere 1 Jan 08 31 Mar 08 2 Jul 08 1 Oct 08 31 Dec 08
high of US$39.8 on high volume early in July. shareholders.
Solidere shares have retreated Solidere attended the Merrill
back since, as the global financial crisis Lynch Middle East and North Africa (MENA)
Share Price - in US$
100 started to be felt throughout the region, One-on-One Investor Forum, held in
Volume of Shares Traded
directly affecting local and regional markets. Al Gouna February 10-13; and the EFG
The shares closed the year on a negative Hermes Annual Conference held in Sharm
note, as some investors opted to liquidate Al Sheikh March 10-13. The conferences
their position and raise some needed cash. gathered a large number of regional
This came at a time when the Lebanese companies, international and regional
B SHARES - DAILY TRADES
economy proved particularly resilient in investors, and fund managers.
facing the global crisis, with Lebanese Presentations on Solideres
commercial banks showing strong results, fundamentals and strategies that led to the Share Price US$ Volume
their total assets attaining a level close to success of Beirut city center, were made at
4,134,204
the US$100 billion mark, and private sector the Arab Economic Forum, held in Beirut May 40.0 500,000
deposits reaching the US$80 billion mark. 2-3; the Merrill Lynch Global Emerging
Share A closed the year at Markets Conference, held in Dubai October
35.0 400,000
US$16.54, representing a 28.18% year-on- 13-15; the Citi MENA Symposium, held in Abu
year decrease. Share B closed at US$16.70, Dhabi November 19-20; and the Friends of
a 26.43% year-on-year decrease. The GDRs, Lebanon Conference for Investment and 30.0 300,000
which are traded in the London Stock Finance, organized in Beirut by Al Iqtissad wal
Exchange, also moved down, closing the year Amal business magazine, November 21-22.
25.0 200,000
at US$16.50, a 30.82% decrease compared to Financial research in 2008 was
the previous year. initiated by Citibank and FFA Private Bank
Trading was active during the s.a.l. The Company continued to receive at its 20.0 100,000
year, with a total of around 44 million shares premises numerous visitors with diverse
changing hands, for a cumulative value of profiles.
15.0 0
about $1.25 billion. This represents around
27% of the Company capital changing hands. 1 Jan 08 31 Mar 08 2 Jul 08 1 Oct 08 31 Dec 08
The average daily trade volume was about
183,000 shares worth around US$5.2 million.
The average price for the year was
Share Price - in US$
consequently about US$28.6, representing
Volume of Shares Traded
about 60% year-on-year increase.
Solidere Annual Report 2008
MANAGEMENT
SYSTEMS AND
STUDIES
MANAGEMENT INFORMATION
SYSTEMS
In 2008, Solidere successfully finished the
pilot project in its newly implemented
Document Management System, and
proceeded with its implementation in the
various divisions and departments. An
Enterprise Project Management solution was
introduced with the help of Microsoft, to
track resource utilization and project costing
102 across multiple projects. The Solidere Portal,
an intranet base, was being tested in order
to keep Company staff well informed with
corporate news and policies.
The Human Capital Management
module was initiated within the Companys
ERP system, and bases are being set for a
new Business Intelligence solution that will
be a powerful tool in Managements hands.
The Geographic Information System was
upgraded and enhanced to accommodate
Solideres specific urban requirements.
A continuous update of hardware,
software and networking equipment aims at
ensuring that Solidere enjoys the latest in
information technology.
URBAN AND STRATEGIC STUDIES
Land use strategy A core concept behind the
original Beirut city center Master Plan was to
have no land use or zoning plan, but to
replace this with regulatory policies that
encourage mixed use. The intention was to
allow the multiple choices of developers to
create a mixed-use city center, replicating
the natural city-making process of 100 years
or morethe product of thousands of
individual market choicesin a period of less
than 20 years. To succeed, this concept
depends on skilled developers operating in
their specialized markets, taking a long term
view and working within a well defined
development process. In recent years a new
type of developer has emerged, treating real
estate development primarily as a short term
financial operation and bringing together a
consortium of cash investors. This has
necessitated a more proactive approach on
land use by Solidere, with the objective of
ensuring adherence to the core objective of
a sustainable and balanced mix of uses.
Solidere has recently decided to
strengthen its real estate team and move
back into development, following the long
implementation process of the Souks, Saifi
Village, the embassy compound and other
projects in Phase One of Beirut city center
development. Solidere is currently engaged
in market studies and concept designs for
some eight new projects in the residential,
serviced apartment, hotel and office sectors.
A new objective for Solidere is to create the
market and control the supply and quality of
new development in specific sectors. These
include office, conference and exhibition,
hotel, serviced apartments and certain
categories of residential space. A new land
use strategy is being put in place to allow
Solidere to control the supply and quality of
product in these key new markets. It will
possibly include a more direct control of
temporary uses, likely to be a significant
component of activity in the New Waterfront
District for the next 5-10 years. These are
likely to be incubators and testing grounds
for new uses that may in time emerge as
permanent components of the city center.
Transportation strategy The need for
implementing a public transport strategy has
been brought into focus in the detailed
design of the Martyrs Square corridor. As
103 required in their project brief, the Greek
consultant team included transport
planners, and the scheme design features a
dedicated public transport right-of-way on
the west side of Martyrs Square continuing
southwards through the Beirut Gate
development. Increases in density and
employment uses in the New Waterfront
District confirmed the necessity for mass
transit in the near future. In particular, it
will not be possible to service the new
concentration of employment in the special
business district without tram, light rail or
bus rapid transit into the city center and
connecting onward to a Beirut-wide network.
Solidere is currently negotiating with the
UK consultants ARUP and local transport
consultants SITRAM, the carrying out of such
a study, long programmed for Beirut city
center within its city-wide context.
Land development strategy The consultancy
proposal has been refined and finalized, for
Laceco to undertake the design of modern
infrastructure networks for the New
Waterfront District. Work will start as soon
as the new Decree has been issued for
Sectors A and D.
Project definition and initiation With
international real estate and marketing
consultants Jones Lang LaSalle undertaking
market research and development advisories
for the office and serviced apartment
projects in Sector B, Solideres Developer
Design Briefs were prepared and issued to
selected architects for these projects.
A concept design competition has been
launched for the Grand Thtre boutique
hotel and spa. Design competition briefs,
massing studies, detailed architectural
programs and Developers Design Briefs
have also been prepared for new residential
projects in Zokak El Blatt and the western
end of Wadi Abou Jamil.
 INDEPENDENT AUDITORS REPORT

To the shareholders
The Lebanese Company for the Development
and Reconstruction of Beirut Central District sal
Beirut - Lebanon

We have audited the accompanying consolidated financial statements of The Lebanese

Company for the Development and Reconstruction of Beirut Central District sal and its
Subsidiaries (the Group), which comprise the consolidated balance sheet as at December 31,
2008, and the consolidated income statement, statement of changes in equity and cash flow
statement for the year then ended, and a summary of significant accounting policies and other
explanatory notes.

Management and Directors Responsibility for the Financial Statements

Management and Directors are responsible for the preparation and fair presentation of these
financial statements in accordance with International Financial Reporting Standards. This
responsibility includes: designing, implementing and maintaining internal control relevant to
the preparation and fair presentation of financial statements that are free from material
misstatement, whether due to fraud or error; selecting and applying appropriate accounting
policies; and making accounting estimates that are reasonable in the circumstances.

Auditors Responsibility
105 Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with International Standards on Auditing. Those
standards require that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance whether the financial statements are free from material
misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditors
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entitys preparation and fair presentation of the
financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
entitys internal control. An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of accounting estimates made by management, as well
as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.

Opinion
In our opinion, the consolidated financial statements present fairly, in all material respects,
the financial position of The Lebanese Company for the Development and Reconstruction of
Beirut Central District sal and its Subsidiaries (the Group) as of December 31, 2008, and of its
consolidated financial performance and its cash flows for the year then ended in accordance
with International Financial Reporting Standards

Beirut, Lebanon
March 18, 2009 Deloitte & Touche Ernst & Young
Solidere Annual Report 2008

CONSOLIDATED DECEMBER 31, 2008 2007 CONSOLIDATED DECEMBER 31, 2008 2007
BALANCE SHEET NOTES US$ US$ INCOME STATEMENT NOTES US$ US$

Assets Revenues from land and real estate sales 256,635,633 288,467,975
Cash and banks balances 07 291,703,019 327,847,633 Revenues from rented properties 21,670,899 20,775,368
Prepayments and other debit balances 08 34,803,021 34,449,004 Revenues from rendered services 24 7,426,645 2,953,325
Accounts and notes receivables, net 09 296,401,913 318,734,724 Cost of land and real estate sales (62,422,633) (114,089,596)
Investments in securities 10 5,901,300 10,063,020 Charges on rented properties 25 (8,345,604) (7,070,296)
Inventory of land and projects in progress 11 1,274,486,606 1,404,710,655 Cost of rendered services 26 (6,712,741) (4,405,412)
Investment properties, net 12 216,787,077 150,349,040 Loss on sale of investment properties (2,108,123) (824,099)
Investment in an associate 13 296,444,933 287,458,659 Net revenues from operations 206,144,076 185,807,265
Fixed assets, net 14 37,304,608 35,641,877 Share result from an associate (1,798,576) 68,030,929
Total Assets 2,453,832,477 2,569,254,612 General and administrative expenses 27 (19,351,682) (18,086,723)
Depreciation of fixed assets 14 (4,512,679) (1,494,267)
Liabilities Write-back of provision/(provision) against
Bank overdrafts and short term facilities 15 176,996,835 181,186,491 land and real estate development cost 11 9,604,171 (7,882,327)
Accounts payable and other liabilities 16 95,310,680 99,357,927 Write-off of land and real estate development cost 11 (8,036,672) -
Dividends payable 17 62,989,562 46,212,797 Other taxes 16 (3,739,823) (670,059)
Deferred revenue and other credit balances 18 256,523,727 233,147,452 Provision for doubtful receivables 09 - (314,962)
Deferred credits under structured contracts 19 - 170,280,000 Other income 28 832,032 202,516
Loans from banks and financial institutions 20 2,347,054 7,041,163 Interest income 29 55,496,110 40,151,525
Total Liabilities 594,167,858 737,225,830 Interest expense (20,309,559) (15,885,954)
Profit before tax 214,327,398 249,857,943
Shareholders Equity Income tax expense 16 (31,608,453) (25,666,091)
Issued capital at par value US$10 per share: 21
100,000,000 clase (A) shares 1,000,000,000 1,000,000,000 Profit for the year 182,718,945 224,191,852
65,000,000 clase (B) shares 650,000,000 650,000,000
1,650,000,000 1,650,000,000 Basic/diluted earnings per share 30 1.1781 1.4450
Legal reserve 22 94,067,105 75,543,036
Retained earnings 272,280,032 263,175,988
Cumulative changes in fair value of available for
sale securities 10 185,130 147,492
Surplus on sales of treasury shares 11,653,751 11,653,751
Less: Treasury shares 23 (168,521,399) (168,491,485)
106 Total Equity 1,859,664,619 1,832,028,782
107

Total Liabilities and Shareholders Equity 2,453,832,477 2,569,254,612

the accompanying notes form an integral part of these consolidated financial statements the accompanying notes form an integral part of these consolidated financial statements
Solidere Annual Report 2008

CONSOLIDATED DECEMBER 31, 2008 2007

(5,827,682)
(155,093,702)

(29,914)
(155,090,832)
1,832,028,782

182,718,945
1,768,649,582
224,191,852

224,300,584

182,756,583

1,859,664,619
108,732

37,638
CASH FLOW STATEMENT NOTES US$ US$

Total
US$
Cash flows from operating activities
Profit for the year before income tax 214,331,284 249,857,943
Adjustments to reconcile income to net cash
provided by operating activities:
Depreciation 31 7,788,218 4,340,875

Surplus on Sale

-
-
-

11,653,751
11,653,751
-

-
-
-
-
-

-
-

11,653,751
Loss on sale of investment properties 12 2,108,123 824,099

of Treasury
Gain on sale of securities (645,911) -

Shares
US$
(Gain)/loss on sale of fixed assets (14,651) 120,882
Provision for doubtful receivables 09 - 314,962
Provision for contingencies and other charges 16(d) 1,499,712 2,876,491
Share result from an associate 13 1,798,576 (68,030,929)
Interest income 29 (54,522,764) (40,151,525)

Cumulative Changes in
Interest expense 31 20,506,797 16,524,567

Available-for-sale

147,492

-
-
38,760
-
108,732
108,732

-
-
37,638
37,638

185,130
Fair Value of

Securities
Changes in working capital

US$
Prepayments and other debit balances 08(b) 14,820,105 3,234,418
Accounts and notes receivable 31 21,292,223 29,829,496
Inventory of land and projects in progress 31 46,691,451 35,649,881
Accounts payable and other liabilities 31 (17,925,716) (3,160,065)
Deferred revenues and other credit balances 08(b) 23,376,275 64,841,659
Interest received 45,018,642 30,721,497

(15,607,206)

(155,093,702)

(18,524,069)

(155,090,832)
182,718,945
-

263,175,988
209,685,044
224,191,852

224,191,852

182,718,945

-
-

272,280,032
Income tax paid (33,403,422) (21,156,116)

Earnings
Retained

US$
Net cash provided by operating activities 292,718,942 306,638,135

Cash flows from investing activities

Pledged term deposits with banks 2,105,602 18,434,911
Investment securities 31 - (1,324,427)
Receivable from recuperated properties 31 1,068,588 217,008
Acquisition of fixed assets 14&31 (2,617,276) (4,633,587)

(5,827,682)

(168,491,485)

(29,914)
(162,663,803)

(168,521,399)
-
-

-
-
-

-
-
-

-
Acquisition of investment properties 12 (340,604) (378,731)

Treasury
Shares
US$
Proceeds from sale of fixed assets 53,100 250,001
108 Proceeds from sale of investment properties 12 8,454,923 7,697,283
109
Proceeds from sale of securities 4,851,911 -
Investment in an associate 13 (10,784,850) (219,427,730)
Net cash provided by/(used in) investing activities 2,791,394 (199,165,272)

Cash flows from financing activities

15,607,206
-

75,543,036

18,524,069
-
59,935,830
-
-
-

-
-

94,067,105

the accompanying notes form an integral part of these consolidated financial statements
Reserve
Bank loans (settlement) (4,694,109) (20,021,537)

Legal

US$
Dividends paid 17 (130,559,521) (132,003,932)
Deferred credits under structured contracts 19 (170,280,000) 170,280,000
Treasury shares (57,914) (5,981,322)
Interest paid (19,768,148) (12,490,622)
Net cash used in financing activities (325,359,692) (217,413)

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

1,650,000,000

-
-

1,650,000,000

-
-
-
-
-

-
-

1,650,000,000
Net change in cash and cash equivalents (29,849,356) 107,255,450

Capital
Share
Cash and cash equivalents - Beginning of the year 139,475,670 32,220,220

US$
Cash and cash equivalents - End of the year 31 109,626,314 139,475,670

Change in fair value of available-for-sale securities

Change in fair value of available-for-sale securities

Allocation to legal reserve from 2007 profit

Allocation to legal reserve from 2008 profit

Balance at December 31, 2007
Balance at December 31, 2006

Balance at December 31, 2008

Profit for the year - 2008
Profit for the year - 2007

Total result of the year

Total result of the year

Treasury shares trade

Treasury shares trade

Dividends Note 17

Dividends Note 17
the accompanying notes form an integral part of these consolidated financial statements
Solidere Annual Report 2008
NOTES 01 FORMATION AND OBJECTIVE
OF THE COMPANY
TO THE The Lebanese Company for the Development
and Reconstruction of Beirut Central District
CONSOLIDATED sal (SOLIDERE) (the Company) was
established as a Lebanese joint stock
FINANCIAL company on May 5, 1994 based on Law No.
117/91, and was registered on May 10, 1994
under Commercial Registration No. 67000.
STATEMENTS The articles of incorporation of the Company
were approved by Decree No. 2537 dated
July 22, 1992.
Year Ended December 31, 2008
The objective of the Company, is to acquire
real estate properties, to finance and ensure
the execution of all infrastructure works in
the Beirut Central District (BCD) area, to
prepare and reconstruct the BCD area, to
reconstruct or restore the existing buildings,
to erect buildings and sell, lease or exploit
such buildings and lots and to develop the
landfill on the seaside.
The duration of the Company is 25 years,
beginning from the date of establishment. An
extraordinary general assembly dated June
29, 1998 resolved to amend the duration of
the Company to be 75 years beginning from
the date of establishment. During 2005, the
Council of Ministers approved the extension
of the duration of the Company for 10 years.
110
The Company, based on law No.117/91
mentioned above, was exempt from income
tax for a period of ten years beginning on the
date of formation. As such beginning May 10,
2004, the Company became subject to
income tax.
An extraordinary general assembly dated
November 13, 2006 resolved to amend the
objective of the Company to include providing
services and consultancy in real estate
development for projects outside the BCD
area and all over the world.
During 2007, the Company granted Solidere
International Limited (an associate) the right
to use the Solidere brand in the execution
of real estate projects outside the Beirut
Central District area of Lebanon.
The Companys shares are listed on the
Beirut stock exchange and Global Depository
Receipts (GDR) are listed on the London
stock exchange (International Trading List).
Furthermore, the Companys shares were
listed on the Kuwait stock exchange during
the year 2005 and were de-listed during the
first quarter of the year 2007.
02 ADOPTION OF NEW AND
REVISED INTERNATIONAL
FINANCIAL REPORTING
STANDARDS
The accounting policies adopted are
consistent with those of the previous
financial year except as follows:
(a) There are no interpretations effective in
2008 and relevant to the Group
(b) No Standards and amendments were early
adopted by the Group as of 1 January 2008
(c) Interpretations effective in 2008 but not
relevant
The following interpretations to published
standards are mandatory for accounting
periods beginning on or after 1 January 2008
but are not relevant to the Groups operations:
IFRIC 14 IAS 19 The Limit on a Defined
Benefit Asset, Minimum Funding
Requirements and their Interaction
IFRIC 12 Service concession
arrangements; and
IFRIC 13 Customer loyalty programmes.
(d) Relevant standards, amendments and
interpretations to existing standards that are
not yet effective and have not been early
adopted by the Group
IFRS 8, Operating segments (effective
from 1 January 2009)
The new standard requires a management
approach, under which segment information
is presented on the same basis as that used
for internal reporting purposes.
IAS 23 (amendment), Borrowing costs
(effective from 1 January 2009)
The amendment requires an entity to capitalise
borrowing costs directly attributable to the
acquisition, construction or production of a
qualifying asset as part of the cost of that asset.
IAS 1 (Revised), Presentation of financial
statements (effective from 1 January 2009).
The revised standard will prohibit the
presentation of items of income and expenses
in the statement of changes in equity,
requiring non-owner changes in equity to be
presented separately from owner changes in
equity. It is not expected to have any impact
on the Groups financial statements.
IAS 32 (Amendment), Financial have an impact on the Groups consolidated
instruments: Presentation, and IAS 1
(Amendment), Presentation of financial
income statement.
statements Puttable financial IAS 40 (Amendment), Investment property
instruments and obligations arising on (and consequential amendments to IAS 16)
liquidation (effective from 1 January 2009). (effective from 1 January 2009).
The Group will apply the IAS 32 and IAS
1(amendment) from 1 January 2009. It is not
Property that is under construction or
development for future use as investment
expected to have any impact on the Groups
financial statements.
property is within the scope of IAS 40. Where
the fair value model is applied, such property
is, therefore, measured at fair value.
IAS 27 (Revised), Consolidated and However, where fair value of investment
separate financial statements, (effective property under construction is not reliably
from 1 July 2009). measurable, the property is measured at
The revised standard requires the effects of cost until the earlier of the date construction
all transactions with non-controlling interests is completed and the date at which fair value
to be recorded in equity if there is no change becomes reliably measurable. The
in control and these transactions will no amendment will not have an impact on the
longer result in goodwill or gains and losses. Groups operations, as there are no
investment properties held by the Group.
IAS 28 (Amendment), Investments in
associates (and consequential amendments IFRIC 15, Agreements for construction of
to IAS 32, Financial Instruments: real estates (effective from 1 January 2009).
Presentation, and IFRS 7, Financial The interpretation clarifies whether IAS 18,
instruments: Disclosures) (effective from 1 Revenue, or IAS 11, Construction
January 2009). contracts, should be applied to particular
An investment in associate is treated as a transactions. The Group will apply the IFRIC
single asset for the purposes of impairment 15 (amendment) prospectively from 1
testing. Any impairment loss is not allocated January 2009.
to specific assets included within the
investment. The Group will apply the IAS 28
(amendment) to impairment tests related to
investments in subsidiaries and any related
111 impairment losses from 1 January 2009. 03 SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
IAS 36 (Amendment), Impairment of
The consolidated financial statements have
assets (effective from 1 January 2009). been prepared in accordance with
Where fair value less costs to sell is
International Financial Reporting Standards.
calculated on the basis of discounted cash
flows, disclosures equivalent to those for
The consolidated financial statements are
value-in-use calculation should be made. presented in U.S. Dollars.
The Group will apply the IAS 36 (Amendment)
and provide the required disclosure where
The consolidated financial statements are
applicable for impairment tests from 1
prepared under the historical cost
January 2009.
convention as modified for the measurement
at fair value of available-for-sale financial
IAS 38 (Amendment), Intangible assets
assets and derivatives, as applicable.
(effective from 1 January 2009).
A prepayment may only be recognised in the The consolidated financial statements
event that payment has been made in
incorporate the financial statements of The
advance of obtaining right of access to goods
Lebanese Company for the Development and
or receipt of services. The Group will apply
Reconstruction of Beirut Central District sal
the IAS 38 (amendment) from 1 January
and its controlled subsidiaries drawn up to
2009. No write-off of prepayments to December 31 of each year. Control is achieved
retained earnings is expected.
where the Group has the power to govern the
financial and operating policies of an entity so
IAS 19 (Amendment), Employee benefits
as to obtain benefits from its activities.
(effective from 1 January 2009)
The group will apply the IAS 19 (amendment)
Where necessary, adjustments are made to
from 1 January 2009.
the financial statements of subsidiaries to
bring their accounting policies in line with
IAS 39 (Amendment), Financial
those used by other members of the Group.
instruments: Recognition and measurement
(effective from 1 January 2009).
The Group will apply the IAS 39 (amendment)
from 1 January 2009. It is not expected to
Solidere Annual Report 2008
COMPANY
Beirut Water Front Development sal
(Joint Venture) (Proportionate consolidation)
Beirut Real Estate Management and Services sal
(Joint Venture), (Proportionate consolidation)
Solidere Management Services sal
Solidere Management Services (Offshore) sal
Solidere International Holding sal
112
All intra-Group balances, transactions,
income and expenses and profits and losses
resulting from intra-Group transactions are
eliminated in full.
Group entities comprise the following:
OWNERSHIP SHARE DATE OF ESTABLISHMENT
50 April 2004
45 September 2005
100 June 2006
100 March 2007
100 May 2007
The significant accounting policies adopted
are set here below:
A. Basis of Presentation
In view of the long term nature and
particulars of the Groups operations, the
consolidated financial statements are
presented on the basis that the operations
have realization and liquidation periods
spread over the duration of the Group and
which are subject to market conditions and
other factors commonly associated with
development projects; as such, the balance
sheet is shown as unclassified without
distinction between current and long-term
components.
B. Foreign Currencies
The functional and presentation currency is
the U.S. Dollars, in accordance with the
applicable law, which reflects the economic
substance of the underlying events and
circumstances of the Group. Transactions
denominated in other currencies are
translated into U.S. Dollars at the exchange
rates prevailing at the dates of the
transactions. Monetary assets and liabilities
stated in currencies other than the U.S.
Dollar are translated at the rates of exchange
prevailing at the end of the year. The
resulting exchange gain or loss which is not
material is reflected in the income statement.
C. Impairment and Uncollectibility of
Financial Assets
An assessment is made at each balance
sheet date to determine whether there is
objective evidence that a financial asset or
group of financial assets may be impaired. If
such evidence exists, the estimated
recoverable amount of that asset and any
impairment loss are determined based on
the present value of expected future cash
flows. Impairment losses are recognized in
the income statement.
D. Accounts and Notes Receivable
Accounts and notes receivable which are
originated by the Group are stated at
amortized cost less any amount written off
and provisions for impairment. An
assessment is made at each balance sheet
date to determine whether there is objective
evidence that accounts or notes receivable
may be impaired. If such evidence exists, the
estimated recoverable amount of that asset
is determined and any impairment loss,
based on the net present value of future
anticipated cash flows discounted at original
effective interest rates, is included in the
income statement.
The carrying amount of the asset is adjusted
through the use of an allowance account.
E. Financial Instruments
Financial assets and financial liabilities are
recognized on the Group balance sheet when
the Group becomes a party to the
contractual provisions of the instrument.
When a financial instrument gives rise to a
contractual obligation on the part of the
Group to deliver cash or another financial
asset or to exchange another financial
instrument under conditions that are
potentially unfavorable, it is classified as a
financial liability. The instrument is an equity
instrument if, and only if, both conditions (a)
and (b) below are met:
(a) The instrument includes no contractual
obligation to deliver cash or another financial
asset to another entity; or to exchange
financial assets or financial liabilities with
another entity under conditions that are
potentially unfavorable to the issuer.
(b) If the instrument will or may be settled
from the Groups own equity instruments; it
is a non-derivative that includes no
contractual obligation for the Group to
deliver a variable number of its own equity
instruments; or a derivative that will be
settled only by the Group exchanging a fixed
amount of cash or another financial asset for
a fixed number of its own equity instruments.
Financial assets within the scope of IAS 39 are
classified as financial assets at fair value
through profit or loss, loans and receivables,
held-to-maturity investments or available-for-
sale financial assets, as appropriate. When
financial assets are recognized initially, they
are measured at fair value, plus, in the case of
investments not at fair value through profit or
loss, directly attributable transaction costs.
The Group determines the classification of
its financial assets on initial recognition and,
where allowed and appropriate, re-evaluates
this designation at each financial year end.
All regular way purchases and sales of
financial assets are recognised on the trade
date, which is the date that the Group
commits to purchase the asset. Regular way
purchases or sales are purchases or sales of
financial assets that require delivery of
assets within the period generally
established by regulation or convention in
the marketplace.
Held-to-Maturity Securities
Held-to-maturity securities, which have fixed
or determinable payments and which are
intended to be held to maturity, are
subsequently measured at amortized cost,
less provision for impairment in value. This
cost is computed as the amount initially
recognized minus principal repayments, plus
or minus the cumulative amortization using
the effective interest method of any
difference between the initially recognized
amount and the maturity amount. Amortized
cost is calculated by taking into account any
discount or premium on acquisition.
Impairment loss on such investments is
recognized in the income statement.
Loans and Receivables
Loans and receivables are non-derivative
financial assets with fixed or determinable
payments that are not quoted in an active
market. After initial measurement, loans
113 and receivables are carried at amortized cost
using the effective interest method less any
allowance for impairment. Gains and losses
are recognized in profit and or loss when the
loans and receivables are derecognized or
impaired as well as through the amortization
process.
Available-for-Sale Securities
Available-for-sale securities are those non-
derivative financial assets that are
designated as available-for-sale or are not
classified in any other category. After initial
recognition available-for-sale financial
assets are measured at fair value with gains
or losses being recognized net of deferred
tax as a separate component of equity until
the investment is derecognized or until the
investment is determined to be impaired at
which time the cumulative gain or loss
previously reported in equity is included in
the consolidated income statement.
Fair Value
The fair value of investments that are
actively traded in organized financial
markets is determined by reference to
quoted market bid prices at the close of
business on the balance sheet date. For
investments where there is no active market,
fair value is determined using valuation
techniques. Such techniques include using
recent arms length market transactions,
reference to the current market value of
another instrument, which is substantially
the same, discounted cash flow analysis and
other pricing models.
Derecognition
Financial assets
A financial asset (or where applicable, a part
of a financial asset or part of a group of
similar financial assets) is derecognized
where:
The rights to receive cash flows from the
asset have expired, or
The Group has transferred its rights to
receive cash flows from the asset, or has
assumed an obligation to pay the received
cash flow in full without material delay to a
third party under a pass through
arrangement, and
Either (a) the Group has transferred
substantially all the risks and rewards of the
asset, or (b) the Group has neither
transferred nor retained substantially all the
risks and rewards of the asset, but has
transferred control of the asset.
When the Group has transferred its rights to
receive cash flows from an asset and has
neither transferred nor retained
substantially all the risks and rewards of the
asset nor transferred control of the asset,
the asset is derecognized to the extent of the
Groups continuing involvement in the asset.
Continuing involvement that takes the form
of a guarantee over the transferred asset is
measured at the lower of the original
carrying amount of the asset and the
maximum amount of consideration that the
Group could be required to repay.
When continuing involvement takes the form
of a written and/or purchased option
(including a cash settled option or similar
provision) on the transferred asset, the extent
of the Groups continuing involvement is the
amount of the transferred asset that the
Group may repurchase, except that in the
case of a written put option (including a cash
settled option or similar provision) on an
asset measured at fair value, the extent of the
Groups continuing involvement is limited to
the lower of the fair value of the transferred
asset and the option exercise price.
Financial liabilities
A financial liability is derecognized when the
obligation under the liability is discharged or
cancelled or expires. Where an existing
financial liability is replaced by another from
the same lender on substantially different
terms, or the terms of an existing liability are
substantially modified, such an exchange or
modification is treated as a derecognition of
the original liability and the recognition of a
Solidere Annual Report 2008
114
new liability and the difference in the
respective carrying amount is recognized in
profit or loss.
Offsetting
Financial assets and financial liabilities are
only offset and the net amount is reported in
the balance sheet when there is a legally
enforceable right to set-off the recognized
amounts and the Group intends to either
settle on a net basis, or to realize the asset
and the liability simultaneously.
F. Inventory of Land and Projects in Progress
Inventory of land and projects in progress
are stated at the lower of cost and estimated
net realizable value. Costs include appraisal
values of real estate plots constituting the
contributions in kind to capital (A shares), in
addition to capitalized costs. Capitalized
costs comprise the following:
Project direct costs and overheads related
to the properties development, construction
and project management as a whole, as well
as acquisition, zoning, and eviction costs.
Indirect costs, such as overheads, which
were partially allocated to inventory of land
and projects in progress.
G. Investment Properties
Investment properties which represent
properties held to earn rent and/or for
capital appreciation are measured initially at
cost and subsequent to initial recognition are
stated at their cost less accumulated
depreciation and any impairment in value.
Depreciation is computed using the straight-
line method over the estimated useful lives
of the properties, excluding the cost of land,
based on the following annual rates:
Buildings 2%
Furniture, fixtures,
equipment and other assets 9%-15%
The carrying amount includes the cost of
replacing part of an existing investment
property at the time that cost is incurred if
the recognition criteria are met. Other
subsequent expenditure is capitalized only
when it increases future economic benefits of
the related item of investment properties. All
other expenditure is recognized in the income
statement as the expense is incurred.
Transfers are made to investment properties
when, and only when, there is a change in
use, evidenced by the end of owner
occupation, commencement of an operating
lease to another party or completion of
construction or development.
Transfers are made from investment
properties when, and only when, there is a
change in use, evidenced by commencement
of owner occupation or commencement of
development with a view to sell.
H. Interest in Joint Ventures
The Group has interests in joint ventures. A
joint venture is a contractual arrangement
whereby two or more parties undertake an
economic activity that is subject to joint
control. The Group recognizes its share in
joint ventures by using the proportionate
consolidation method.
Investments in joint ventures are accounted
for in the standalone financial statements
using historical cost net of any impairment
loss. Impairment loss is recognized in the
income statement.
The Group consolidates its share in assets,
liabilities, revenues and expenses with
related captions in the consolidated financial
statements.
Financial statements of joint ventures are
prepared for the same fiscal year, using the
same accounting policies.
When the Group contributes or sells assets
to the joint venture, any portion of gain or
loss from the transaction is recognized
based on the substance of the transaction.
When the Group sells assets to the joint
venture, the Group does not recognize its
share of the profits from the transaction
until the joint venture resells the assets to
an independent party.
The joint venture is proportionately
consolidated until the date on which the
Group ceases to have joint control over the
joint venture.
I. Investments in Associates
The Groups investments in associates are
accounted for under the equity method of
accounting. These are entities over which the
Group exercises significant influence and
which are neither subsidiaries nor joint
ventures.
Under the equity method of accounting, the
interest in the associate is carried in the
balance sheet at cost as adjusted for post
acquisition changes in the Groups share of
the net assets of the associate, less any
impairment in the value of the individual
investment.
J. Fixed Assets
Fixed assets are stated at cost net of
accumulated depreciation and any
impairment in value. Depreciation is
computed using the straight-line method
over the estimated useful lives of the assets
based on the following annual rates:
Buildings 2%
Marina 2%
Furniture and fixtures 9%
Freehold improvements 9%
Plant 10%
Machines and equipment 14%-20%
Expenditure incurred to replace a
component of an item of fixed assets that is
accounted for separately is capitalized and
the carrying amount of the component that is
replaced is written off. Other subsequent
expenditure is capitalized only when it
increases future economic benefits of the
related item of fixed assets. All other
expenditure is recognized in the income
statement as the expense is incurred.
K. Impairment
At each balance sheet date, the carrying
amounts of tangible assets (investment
properties and fixed assets) are reviewed to
determine whether there is any indication
that these assets have suffered an
impairment loss. If any such indication
exists, the recoverable amount of the asset
is estimated in order to determine the extent
of the impairment loss, if any.
Recoverable amount is defined as the higher
115 of:
Fair value that reflects market conditions at
the balance sheet date less cost to sell, if any.
Value in use assessed as the present value
of estimated future cash flows expected to
arise from the continuing use of the asset
and from its disposal at the end of its useful
life, only for applicable assets with cash
generation units, as applicable.
Where an impairment loss subsequently
reverses, the carrying amount of the asset is
increased to the revised estimate of its
recoverable amount, but so that the increased
carrying amount does not exceed the carrying
amount that would have been determined had
no impairment loss been recognized for the
asset in prior years. A reversal of an
impairment loss is recognized immediately in
profit or loss, unless the relevant asset is
carried at a revalued amount, in which case
the reversal of the impairment loss is treated
as a revaluation increase.
The impairment loss is recognized in the
income statement.
L. Treasury Shares
Own equity instruments which are reacquired
(treasury shares) are deducted from equity.
No gain or loss is recognized in profit or loss
on the purchase, sale, issue or cancellation
of the Groups own equity instruments.
Gains on sale of treasury shares are
recorded under a reserve account in equity.
Losses in excess of previously recognized
gains are charged to retained earnings.
M. Revenue Recognition
Revenue on land and real estate sales
transactions is recognized on the basis of
the full accrual method as and when the
following conditions are met:
A sale is consummated and contracts are
signed.
The buyers initial (in principle over 25% of
sales price) and continuing investments are
adequate to demonstrate a commitment to
pay for the property.
The Groups receivable is not subject to
future subordination.
The Group has transferred to the buyer the
usual risks and rewards of ownership in a
transaction that is in substance a sale and
the Group does not have a substantial
continuing involvement with the property.
If any of the above conditions is not met, the
initial payments received from buyers are
recorded under deferred revenues and other
credit balances. Amounts are released to
revenue as and when the above conditions
are fulfilled.
Financial assets (including treasury shares)
received in return for the sale of land and
real estate are valued at fair market value.
Rental income from operating leases is
recognized on a straight-line basis over the
term of the relevant lease.
Interest income is recognized as interest
accrues using the effective interest method,
by reference to the principal outstanding and
the applicable interest rate.
Revenue from rendering of services is
recognized when the outcome of the
transaction can be estimated reliably, by
reference to the stage of completion of the
transaction at the balance sheet date.
N. Cost of Sales
Cost of properties sold is determined on the
basis of the built up area (BUA) - permitted
right to build in square meters - on the sold
plots based on the terms of the sales
agreements. The cost of one square meter of
BUA is arrived at by dividing, total estimated
cost of the land development project over
total available BUA after deduction of the
BUA relating to recuperated properties and
those relating to the religious and public
administrations.
Solidere Annual Report 2008
116
O. Deferred Credits under Structured
Contracts
Treasury shares sold where the buyer has
the option to put back to the Group the
shares at a predetermined price and the
Group has the option to buy back these
shares at the same price, are treated as
deferred credits under structured contracts.
The difference between the original sales
proceeds and option strike price is treated
as interest which is accrued using the
effective interest rate method.
P. Borrowing Costs
Borrowing costs directly attributable to the
acquisition, construction or production of
qualifying assets, which are assets that
necessarily take a substantial period of time
to be ready for their intended use, are added
to the cost of those assets, until such time
that the assets are substantially ready for
their intended use.
All other borrowing costs are reflected in the
income statement in the period in which they
are incurred.
Q. Bank Borrowings
Interest-bearing bank loans and overdrafts
are initially measured at the fair value of the
consideration received, less directly
attributable costs and are subsequently
measured at amortized cost, using the
effective interest rate method. Any difference
between the proceeds (net of transaction
costs) and the settlement or redemption of
borrowings is recognized in profit or loss
over the term of the borrowings through the
amortization process, using the effective
interest rate method. The fair value of
borrowings for disclosure purposes is
estimated by discounting the future
contractual cash flows at the current market
interest rate that is available to the Group for
similar financial instruments.
R. Trade and other payables
Trade and other payables are initially
measured at fair value. Due to their short-
term nature, the carrying amount of trade
and other payables approximates their fair
values as of December 31, 2008 and 2007.
Average maturity dates of trade payables
range between 30-90 days. Short duration
payables with no stated interest rate are
measured at original invoice amount unless
the effect of imputing interest is significant.
S. Derivative Financial Instruments
Derivative financial instruments are initially
recognized at fair value on the date on which
a derivative contract is entered into and are
subsequently remeasured at fair value.
Derivatives are carried as assets when the
fair value is positive and as liabilities when
the fair value is negative.
Fair values are generally obtained by
reference to quoted market prices,
discounted cash flow models and pricing
models as appropriate.
Cash flow hedges are a hedge of the
exposure to variability in cash flows that is
attributable to a particular risk associated
with a recognized asset or liability or a highly
probable forecast transaction and could
affect profit or loss.
The effective portion of the gain or loss on
the hedging instrument is recognized directly
in equity, while the ineffective portion is
recognized in profit or loss.
Amounts taken to equity are transferred to
the income statement when the hedged
transaction affects profit or loss, such as
when hedged financial income or financial
expense is recognized or when a forecast
sale or purchase occurs. Where the hedged
item is the cost of a non-financial asset or
liability, the amounts taken to equity are
transferred to the initial carrying amount of
the non-financial asset or liability.
T. Taxation
117
Current Tax
Income tax is determined and provided for in
accordance with the Lebanese tax laws.
Income tax expense is calculated based on the
taxable profit for the year. Taxable profit differs
from net profit as reported in the income
statement because it excludes items of income
or expense that are taxable or deductible in
future years and it further excludes items that
are never taxable or deductible. The
Companys liability for current tax is calculated
using tax rates enacted at the balance sheet
date. Provision for income tax is reflected in
the balance sheet net of taxes previously
settled in the form of withholding tax.
Rental income is subject to the built property
tax in accordance with the Lebanese tax law.
Deferred tax
Deferred income tax is provided, using the
liability method, on all temporary differences
at the balance sheet date between the tax
bases of assets and liabilities and their
carrying amounts.
Deferred income tax assets and liabilities
are measured at the tax rates that are
expected to apply to the period when the
asset is realized or the liability is settled,
based on laws that have been enacted at the
balance sheet date.
Deferred income tax assets are recognized for
all deductible temporary differences and carry-
forward of unused tax assets and unused tax
losses to the extent that it is probable that
taxable profit will be available against which
the deductible temporary differences and the
carry-forward of unused tax assets and unused
tax losses can be utilized.
The carrying amount of deferred income tax
assets is reviewed at each balance sheet
date and reduced to the extent that it is no
longer probable that sufficient taxable profit
will be available to allow all or part of the
deferred income tax asset to be utilized.
Taxes payable on unrealized revenues are
deferred until the revenue is realized.
Current tax and deferred tax relating to
items that are credited or charged directly to
equity are recognized directly in equity.
Value added tax (VAT)
Revenues, expenses and assets are
recognized net of the amount of VAT except:
Where the VAT incurred on a purchase of
assets or services is not recoverable from
the taxation authority, in which case the VAT
is recognized as part of the cost of
acquisition of the asset or as part of the
expense item as applicable; and
Receivables and payables that are stated
with the amount of VAT included.
The net amount of VAT recoverable from, or
payable to, the taxation authority is included
as part of receivables or payables in the
balance sheet.
U. Provisions
Provisions are recognized when the Group
has a present obligation (legal or
constructive) as a result of a past event, it is
probable that an outflow of resources
embodying economic benefits will be
required to settle the obligation and a
reliable estimate can be made of the amount
of the obligation.
The amount recognized as a provision is the
best estimate of the consideration required
to settle the present obligation at the
balance sheet date, taking into account the
risks and uncertainties surrounding the
obligation. Where a provision is measured
using the cash flows estimated to settle the
present obligation, its carrying amount is the
present value of these cash flows.
V. Employees End-of-Service Benefits
The Group provides end-of-service benefits
to its employees. The entitlement to these
benefits is based upon the employees final
salary and length of service, subject to the
completion of a minimum service period. The
expected costs of these benefits are accrued
over the period of employment.
04 CRITICAL ACCOUNTING
JUDGMENTS AND USE
OF ESTIMATES
In the application of the accounting policies
described in Note 03 above, management is
required to make judgments, estimates and
assumptions about the carrying amounts of
assets and liabilities that are not readily
apparent from other sources. The estimates
and associated assumptions are based on
historical experience and other factors that
are considered to be relevant. Actual results
may differ from these estimates.
The estimates and underlying assumptions
are reviewed on an ongoing basis. Revisions
to accounting estimates are recognized in
the period in which the estimate is revised if
the revision affects only that period, or in the
period of the revision and future periods if
the revision affects both current and future
periods.
The most significant estimate made by the
Group is the determination of the aggregate
cost of the Beirut Central District Project.
Impairment of Accounts and Notes
Receivable
An estimate of the collectible amount of
accounts and notes receivable is made when
collection of the full amount is no longer
probable. For individually significant
amounts, this estimation is performed on an
individual basis. Amounts which are not
individually significant, but which are past
due, are assessed collectively and a provision
is set up according to the length of time past
due, based on historical recovery rates.
At the balance sheet date, accounts and
notes receivable amounted to US$29,581,896
and US$292,850,322 respectively, and the
provision for doubtful debts amounted to
US$451,320 as of the balance sheet date.
Any difference between the amounts actually
collected in future periods and the amounts
expected will be recognized in the income
statement.
Solidere Annual Report 2008

Useful Lives of Fixed Assets

The Groups management determines the
estimated useful lives of its fixed assets for
05 INTEREST
IN JOINT VENTURES
DECEMBER 31,

Assets
2008
US$
2007
US$

calculating depreciation. The estimate is Cash and bank balances 8,682,897 11,435,184
determined after considering the expected The Group has interest in joint ventures as Prepayments and other debit balances 66,098 257,593
usage of the assets or physical wear and follows: Inventory of land and projects in progress 14,046,207 10,850,050
tear. Management reviews the residual value Fixed assets, net 129,140 70,503
and useful lives annually and future (a) The Group entered into a joint venture 22,924,342 22,613,330
depreciation charge would be adjusted agreement on February 11, 2004, with Stow Liabilities:
where the management believes the useful Waterfront sal (Holding) to establish Beirut Accounts payable and other liabilities 6,541,328 3,980,398
lives differ from previous estimates. Waterfront Development sal with a 50% 6,541,328 3,980,398
stake in the joint ventures total capital
Impairment of Available For-Sale Equity amounting to US$19,900. During the year
Investments 2006, the capital of the joint venture was Income and Expenses
The Group determines that available for sale increased to US$12,819,900 without
changing the Groups share in the capital. 2008 2007
equity investments are impaired when there
The main activity of the joint venture is to US$ US$
has been a significant or prolonged decline
in the fair value below its cost. This develop, operate, manage, exploit and sell
Revenues from consulting services 231,260 482,544
determination requires judgment. In making real estate properties in the Marina area in
General and administrative expenses (383,867) (275,492)
this judgment the Group evaluates among Beirut Central District.
Depreciation (16,399) (14,468)
other factors, the normal volatility in share Interest income 279,209 656,582
price. In addition, the Group considers As per the terms of the agreement, on Interest expense (19,875) (429,668)
impairment to be appropriate when there is December 31, 2005, the Group sold Income for the year before income tax 90,328 419,498
evidence of deterioration in the financial properties with an aggregate cost of Income tax (35,737) (60,382)
health of the investee, industry and sector US$10,100,000 from properties held for Income for the year 54,591 359,116
performance, changes in technology, and development and sale, to the joint venture
operational and financing cash flows. for a total consideration of US$31,600,000.
The other venturer contributed in cash an
amount of US$31,600,000 to the joint
venture. 06 SEGMENT
REPORTING

(b) The Group entered into a joint venture

The business segments reporting is
agreement on December 23, 2005, with
determined as the Groups risk and rates of
118 Aswaq Management and Services L.L.C. to 119 return are affected predominantly by
establish Beirut Real Estate Management
differences in the products and services. The
and Services sal, with a 45% stake in the
geographical operating segment offers
joint ventures capital amounting to
products and services through a specific
US$19,900. The main activity of the joint
economic environment and is subject to
venture is to manage and market Aswaq
risks and returns that differ from other
Beirut Project (under construction) which is
economic environments and is considered
owned by the Lebanese Company for the
the primary segment. The Group has no
Development and Reconstruction of Beirut
secondary segment.
Central District sal
The Group operates in two geographic
The Groups share of the assets, liabilities,
markets, the Lebanese market and the
income and expenses of the jointly controlled
Middle East market consisting primarily of
entities at December 31, 2008 and 2007,
the United Arab Emirates (UAE). The
included in the consolidated financial
following table shows the distribution of the
statements, are as follows:
Groups revenues, profit for the year, total
assets and total liabilities by geographical
segment.

2008 Lebanon Middle East Total

US$ US$ US$

Revenues 285,733,177 - 285,733,177

Profit for the year 184,517,521 (1,798,576) 182,718,945
Total assets 2,157,387,544 296,444,933 2,453,832,477
Total liabilities 594,167,858 - 594,167,858
Solidere Annual Report 2008

(b) Accrued interest income consists

2007 Lebanon Middle East Total
of the following:
US$ US$ US$

Revenues 312,196,668 - 312,196,668

DECEMBER 31, 2008 2007
Profit for the year 156,160,923 68,030,930 224,191,853
US$ US$
Total assets 2,281,795,953 287,458,659 2,569,254,612
Total liabilities 737,225,830 - 737,225,830
Interest on bank deposits 1,502,022 1,993,894
Interest on notes and accounts receivables 8,002,100 7,436,132
9,504,122 9,430,026

07 CASH AND
BANK BALANCES
DECEMBER 31, 2008
US$
2007
US$
(c) Deferred tax assets caption consists of
the following:
Cash on hand 88,252 85,026
Current accounts 7,921,544 11,064,074
DECEMBER 31, 2008 2007
Short term deposits 278,613,353 309,513,061
US$ US$
286,623,149 320,662,161
Pledged term deposits 5,079,870 7,185,472
Deferred tax assets on unrealized profits from
291,703,019 327,847,633
sales to a joint venture Note 05 (a) 1,612,500 1,612,500
Deferred tax assets on cost of land sold Note 16 (c) 843,298 664,620
2,455,798 2,277,120

Short term deposits mature between January

and April 2009 (December 31, 2007: Short
(d) Due from related parties caption consists
term deposits mature in January 2008). The
of the following:
average yield on the term deposits as of
December 31, 2008 was approximately 4.6%
(5.5% for the year ended December 31, 2007).
DECEMBER 31, 2008 2007
US$ US$
Pledged term deposits include deposits of
US$5million as of December 31, 2008 Solidere International Limited 5,857,770 3,801,413
(US$7million as of December 31, 2007) Brems International sal (Offshore) 6,750 6,750
pledged against a stand-by letter of credit to 5,864,520 3,808,163
the extent of about US$3.35million
120 (US$3.5million as of December 31, 2007) and 121 The above balances are interest free.
against a local banks loan to the extent of
US$3million (US$3million as of December
(e) Other debit balances as at December 31,
31, 2007) as explained under Note 20 and
2007, include an amount of US$2,358,000
Note 33(h).
which was offset against cost of inventory of
land and projects in progress in the balance
sheet. The above amount represented a
claim receivable in connection with an

08 PREPAYMENTS
AND OTHER DEBIT BALANCES
DECEMBER 31, 2008
US$
2007
US$
arbitration in a dispute with one of the
Companys contractors, which was resolved
during 2008 as explained under Note 33 (j).
Advance payments to contractors (a) 5,113,251 8,880,279
Advances to employees 2,485,084 2,006,704
Accrued interest income (b) 9,504,122 9,430,026
Prepaid expenses 2,365,089 2,278,275
Deferred tax assets (c)
Due from related parties (d)
2,455,798
5,864,520
2,277,120
3,808,163 09 ACCOUNTS AND NOTES
RECEIVABLE, NET
DECEMBER 31, 2008
US$
2007
US$
Other debit balances (e) 7,015,157 5,768,437
34,803,021 34,449,004 Notes receivable 292,850,322 289,075,956
Accounts receivable 29,581,896 68,961,930
Receivables from tenants 6,919,018 6,539,940
Interest receivable on discounted notes - 801,730
(a) Advance payments to contractors include
Less: Unearned interest (32,498,003) (46,193,512)
an amount of US$3,407,026 as of December
Less: Provision for problematic receivables (451,320) (451,320)
31, 2008 (US$7,030,531 as of December 31,
296,401,913 318,734,724
2007) relating to a contractor involved in the
execution of the Aswaq Beirut project.
The Groups credit risk exposure is spread
over 93 counter-parties; 6 customers
constitute 70% of the total exposure and 87
customers constitute the remaining 30% as
of December 31, 2008 (as of December 31,
2007, 118 counter-parties; 6 customers
constitute 54% of the total exposure and 102
customers constitute the remaining 46%).
Solidere Annual Report 2008

Notes receivable, which resulted mainly

(194,000)

1,595,500
3,550,000

4,951,500

4,938,000
2,250,000

2,688,000

9,889,500

173,520
10,063,020
2007
from sales carry the following maturities:

Net Value

The change in fair market value of the available-for-sale securities is recorded under Cumulative changes in fair value of available-for-sale securities in equity net of deferred tax liability in
US$
DECEMBER 31, 2008 2007
US$ US$

Doubtful balances 470,605 470,605

right of set-off
Leverage with

1,400,000
1,450,000

2,194,000

5,044,000

750,000

5,794,000
750,000

-
Overdue 5,155,255 66,860,055

US$
2008 - 95,993,211
2009 121,950,534 61,247,873
2010 65,793,795 36,640,650
2011 48,386,473 27,863,562
2012 28,392,499 -

Book Value

2,995,500
5,000,000

2,000,000

9,995,500

2,688,000
5,688,000

15,683,500
3,000,000
2013 and above 22,701,161 -

US$
292,850,322 289,075,956

As at December 31, the aging analysis of

notes receivable is as follows:

2008

2,928,000
-

2,928,000

2,905,000
2,905,000

5,833,000
-
Fair Value
US$
DECEMBER 31, 2008 2007
US$ US$

the amount of US$32,670 as of December 31, 2008 (net of deferred tax liability in the amount of US$26,028 as of December 31, 2007).
Doubtful balances 470,605 470,605
Past due but not impaired:
<30 days - 1,209,669

2,995,500
2,995,500

2,688,000

5,683,500

217,800
5,901,300
-

2,688,000
Net Value
30-60 days - 1,584,752

US$
>120 days 5,155,255 64,065,634
5,155,255 66,860,055

Neither past due nor impaired 287,224,462 221,745,296

right of set-off
292,850,322 289,075,956

Leverage with

-
-

-
-

-
US$
The average yield on accounts and notes
receivable is mainly dependant on the Libor
rate and was 7% as of December 31, 2008
122 123

1 The Group has a put option to sell back the notes to the issuer at 100% provided certain conditions are met.
(5.87% as of December 31, 2007).

Book Value

2,995,500
-

2,995,500

2,688,000
2,688,000

5,683,500
-
The movement in the provision for

US$
problematic receivables during the year was
as follows:

2008 2007

3ML + 0.75%

1YL + 0.75%

3ML + 0.5%

3ML + 0.5%

3ML + 0.5%
on Leverage
US$ US$

Interest
Balance at the beginning of the year 451,320 351,320
Additions - 314,962
Write-offs - (214,962)
Balance at the end of the year 451,320 451,320

Coupon Rate
Conditional

6.10

6.00

6.5

5.60

6.20
Unimpaired receivables are expected, on the

%
basis of past experience to be fully
recoverable.

Maturity Date

16/03/2015
23/2/2014

26/3/2008

29/3/2012

25/04/2016
right of set-off and the Group intends to
10 INVESTMENT
SECURITIES
settle them on a net basis at maturity.
Coupon rates depend on certain conditions
being satisfied which vary depending on the

Knock-out Callable Range Note 1

During prior years, the Group purchased instrument, but mainly are related to the

Total investments in securities

several investments in capital guaranteed Libor rate. The average yield on these

Callable Range Accrual Note

available-for -sale securities

USD Spread Callable Range

Add: Change in fair value of

7-year USD Callable Range
10-year USD Momentum
structured products, issued by foreign investment securities amounted to 7.71% in

7-year Non-Call 3 months

4 year CPU MULTIPLUS

Accrual Puttable Note 1

financial institutions, whereby a considerable 2008 (6.12% during the year 2007).

Investment securities
part of the price was financed by a loan from

Available-for-sale
DECEMBER 31

Held-to-Maturity

at net book value

the issuing foreign bank. The financial assets The details of the above investments are as

on Asian Indices
and the financial liabilities resulting from follows:

Accrual Note
these transactions are offset and the net
amount is reported in the balance sheet
since the Group has a legally enforceable
Solidere Annual Report 2008
11 INVENTORY OF LAND AND
PROJECTS IN PROGRESS
124
DECEMBER 31,
Land and land development works, net (a)
Real estate development projects, net (b)
(a) Land and land development works
include the following cost items:
DECEMBER 31,
Acquired properties (a.1)
Pre-acquisition costs (a.2)
Infrastructure costs (a.3)
Eviction costs (a.4)
Capitalized costs (a.5)
Cumulative costs
Less: Cost of land sold, net
Less: Cost of land transferred to real estate
development projects
Less: Cost of infrastructure transferred to
real estate development projects
a.1. Acquired properties consist mainly of
the aggregate initial appraised value
attributed to the plots included in the BCD
area of US$1,170,001,290 net of the
recuperated properties. The aggregate
appraised value is determined in accordance
with Decree No. 2236 (dated February 19,
1992 based on the decision of the Higher
Appraisal Committee, which was established
in accordance with Law No. 117/91).
Acquired properties include the value of
purchased and exchanged properties as well.
Law No. 117/91 stated the requirements for
property recuperation and exemption. In this
respect properties appraised at US$255
million were recuperated by original owners
and properties appraised at US$133million
were not claimed for recuperation.
a.2. Pre-acquisition costs include technical
and master plan studies incurred during the
set up period of the Group.
a.3. Infrastructure costs as at December 31,
2008 include an amount of US$280.59million
(US$280.55million as of December 31, 2007)
relating to the sea front defense and marina
works, an amount of US$147.30million
(US$146million as of December 31, 2007)
relating to infrastructure works executed in
the traditional BCD area, and an amount of
US$83million (US$107million as of
December 31, 2007) relating to the cost of
land reclamation and treatment. It also
includes the cost of an electricity power
station in the amount of US$42million
2008
US$
2007
US$
a.4. Eviction costs represent the costs of
relocating previous settlers out of the BCD
area which were mainly paid through the
1,101,672,564 1,190,541,499 Central Fund for the Displaced (a public
172,814,042 214,169,156 authority). This caption is stated net of
1,274,486,606 1,404,710,655 US$22.2million as of December 31, 2008
(US$22.2million as of December 31, 2007)
representing a 10% charge on recuperated
properties appraised values collected from
original owners other than religious and
governmental recuperated properties.
2008 2007
US$ US$ a.5. Capitalized costs represent allocation of
direct overheads. Costs capitalized during
959,044,344 959,007,209 the year ended December 31, 2008 amounted
9,412,802 9,412,802 to US$2.9million (US$2.8million for the year
662,520,215 672,458,067 ended December 31, 2007).
259,749,466 259,741,166
63,276,868 64,456,116 (b) Real estate development projects include
1,954,003,695 1,965,075,360 the following:
(750,075,601) (689,047,866)
(95,902,409) (79,132,874)
DECEMBER 31, 2008 2007
US$ US$
(6,353,121) (6,353,121)
1,101,672,564 1,190,541,499
Construction and rehabilitation of buildings 430,857,950 390,244,030
Cost of land 96,290,690 79,521,156
Cumulative costs 527,148,640 469,765,186
Less: Cost transferred to investment properties, net (282,799,911) (185,286,091)
(US$42million as of December 31, 2007), and Cost transferred to fixed assets (27,370,432) (26,145,684)
other costs which relate mainly to demolition Cost of real estate sold (44,164,255) (44,164,255)
172,814,042 214,169,156
and archeology. This caption includes
capitalized borrowing costs totaling
US$41.04million up to December 31, 2008 125
(US$40.8million up to December 31, 2007). During 2008, the Group wrote-off costs in the
During the year ended December 31, 2008, The net cost of real estate development aggregate amount of US$2,500,863 related to
borrowing costs of US$0.63million were projects includes cost incurred in connection projects that were sold in previous years and
capitalized (US$0.64million for the year with the construction of a shopping mall in recorded under Write-off of land and real
ended December 31, 2007). the amount of US$135million as of estate development cost in the income
December 31, 2008 (US$106.3million as of statement.
During May 2008, an agreement was signed December 31, 2007).
with a contractor whereby both parties During 2008, a provision for impairment in
agreed to cancel all the arbitrations raised During 2008, the Group wrote-off costs in the the amount of US$3,000,000 was setup
against each other in previous years. In aggregate amount of 5,535,809 related to old against real estate development projects.
addition the agreement stated that the Group real estate development projects, and The above provision was recorded under
receive an amount of US$43,094,872 of which recorded under write-off of land and real Write-back of provision/(provision) against
US$8,494,875 was previously settled. As a estate development cost in the income land and real estate development cost in
result, provisions in the amount of statement. the income statement.
US$12,604,171 setup up to December 31,
2007, of which US$7,882,327 in 2007 Based on all of the above, Write-back of
recorded under Write-back of provision/(provision) against land and real
provision/(provision) against land and real estate development cost in the income
estate development cost, were written back statement consists of the following:
to the income statement in 2008. The
balance in the amount of US$30,490,701 was
DECEMBER 31, 2008 2007
offset against cost of inventory of land and US$ US$
projects in progress in the balance sheet.
The deposit payable and retention payable in Write back of provision (a.3) 12,604,171 -
the amount of US$8,494,875 and Provision for impairment (b) (3,000,000) (7,882,327)
US$2,831,625, respectively (Note 16), as at 9,604,171 (7,882,327)
December 31, 2007 were offset against cost
of inventory of land and projects in progress
in the balance sheet (Note 33 (j) ).
Solidere Annual Report 2008

Write-off of land and real estate Investment properties include rented and US$1,529,611 and related depreciation in the
development cost in the income statement available for rent properties. These represent amount of US$194,009 from investment
consist of the following: mainly a property leased out to the Ministry properties to fixed assets.
of Foreign Affairs and Emigrants, for use by
an international agency. It also includes The fair value of the investment properties is
DECEMBER 31, 2008 2007 residential complexes, an embassy complex, estimated by management at around
US$ US$ and other restored buildings. US$605million based on current market
prices (US$320million as of December 31,
Provision for impairment (b) 5,535,809 - During the year ended December 31, 2008, 2007). There has been no valuation of these
Write-off of costs incurred (b) 2,500,863 - the Group sold property having an aggregate
properties by an independent valuer.
8,036,672 - net book value of US$9,262,563 for total
proceeds of US$8,454,923 which resulted in a
Depreciation for investment properties in the
loss of US$807,640 recorded under Loss on
amount of US$3,275,539 for the year 2008
sale of investment properties in the income
statement (net book value of US$8,521,382, (US$2,740,934 for the year 2007) is recorded
12 INVESTMENT
PROPERTIES, NET
Balance as at
December 31
2007 Additions Transfers
Disposals
and Sales
Balance as at
December 31
2008
total proceeds of US$7,697,283 and loss of
US$824,099 for the year ended December 31,
under Charges on rented properties
caption in the income statement (Note 25).
US$ US$ US$ US$ US$ 2007). Also during 2008, the Group booked an
impairment loss on investment properties
due to additional costs incurred that will not
Cost
be recovered in future periods amounting to
Land 42,090,628 - 16,759,535 (2,435,892) 56,414,271
US$1,300,483 recorded under Loss on sale
Buildings 124,281,478 301,246 63,638,342 (8,563,754) 179,657,312
of investment properties.
Other assets 4,585,459 39,358 (655,868) - 3,968,949
170,957,565 340,604 79,742,009 (10,999,646) 240,040,532
Accumulated During the year ended December 31, 2008,
Depreciation the Group transferred US$80,744,285 from
Buildings 17,644,192 3,110,665 5,000 (436,600) 20,323,257 real estate development projects to
Other assets 2,964,333 164,874 (199,009) - 2,930,198 investment properties (US$10,580,812 for the
20,608,525 3,275,539 (194,009) (436,600) 23,253,455 year ended December 31, 2007).
Net Book Value 150,349,040 216,787,077
During the year ended December 31, 2008,
the Group transferred US$527,335 from fixed
assets to investment properties.

126 Balance as at Balance as at 127 During the year ended December 31, 2008,
December 31 Disposals December 31
the Group transferred cost in the amount of
2006 Additions Transfers and Sales 2007
US$ US$ US$ US$ US$

Cost
Land 42,001,922 - 2,194,225 (2,105,519) 42,090,628
Buildings 122,702,684 300,443 8,386,587 (7,108,236) 124,281,478
Other assets 4,507,171 78,288 - - 4,585,459
169,211,777 378,731 10,580,812 (9,213,755) 170,957,565

Accumulated
Depreciation
Buildings 15,911,771 2,424,794 - (692,373) 17,644,192
Other assets 2,648,193 316,140 - - 2,964,333
18,559,964 2,740,934 - (692,373) 20,608,525
Net Book Value 150,651,813 150,349,040
Solidere Annual Report 2008

13 INVESTMENT IN
AN ASSOCIATE 14 FIXED
ASSETS, NET

Details of the Groups associate are Fixed assets are composed of the following:
as follows:
Balance as at Balance as at
2008 2007 December 31, Disposals December 31
Country of Ownership Groups Share Groups Share 2007 Additions Transfers and Sales 2008
Incorporation Interest Cost of Equity Cost of Equity US$ US$ US$ US$ US$
% US$ US$ US$ US$

Cost
Solidere International Limited UAE 38.18 298,243,509 296,444,933 219,427,730 287,458,659 Land 5,080,192 - - - 5,080,192
Buildings 11,725,529 113,358 638,532 - 12,477,419
Marina 6,934,100 - 932,624 - 7,866,724
Summarized financial information in respect Furniture and fixtures 2,547,704 134,688 3,680 - 2,686,072
of the Groups associate is set out below: Freehold improvements 3,614,458 183,578 125,936 - 3,923,972
Plant - - - - -
Machines and equipment 24,530,020 2,153,473 2,926,295 (194,245) 29,415,543
DECEMBER 31, 2008 2007 Prefabricated Office - 40,425 - - 40,425
US$ US$ 54,432,003 2,625,522 4,627,067 (194,245) 61,490,347

Total assets 923,820,740 878,335,751 Accumulated

Total liabilities (38,548,196) (5,672,721) Depreciation
Less: Minority interest (108,914,805) (108,523,324) Buildings 1,994,043 225,303 - - 2,219,346
Marina 512,792 157,331 (5,000) - 665,123
Net assets 776,357,739 764,139,706
Furniture and fixtures 2,154,268 234,414 414 - 2,389,096
Groups share of net assets of an associate 296,444,933 287,458,659 Freehold improvements 2,403,462 341,627 25,502 - 2,770,591
Initial price of investment 298,243,509 219,427,730 Plant - - - (144,305) (144,305)
Machines and equipment 11,725,561 4,387,322 173,093 (3,457) 16,282,519
Groups share of results of an associate (1,798,576) 68,030,929
Prefabricated Office - 3,369 - - 3,369
Carrying amount of the investment 296,444,933 287,458,659 18,790,126 5,349,366 194,009 (147,762) 24,185,739
Net Book Value 35,641,877 37,304,608

During the first half of the year 2007, On June 7, 2007, the Group directly
128 Solidere established Solidere International subscribed into the capital of Solidere 129
Holdings sal (SIH) which in turn established International Limited for an amount of Balance as at Balance as at
Solidere International Limited (SI) in the US$3,000,060 representing a 0.4286% equity December 31, Disposals December 31
2006 Additions Transfers and Sales 2007
Dubai International Financial Center (DIFC) stake.
US$ US$ US$ US$ US$
with an initial capital of US$50,000. The main
activity of SI is to promote, invest in, develop, During 2008, the Group increased its direct
market and manage, as well as provide ownership in Solidere International Limited Cost
consulting services with respect to real to 38.18% by acquiring 66,849 shares for an Land 5,080,192 - - - 5,080,192
estate projects outside the Beirut Central amount of US$10,784,850, thus increasing Buildings 11,507,802 217,727 - - 11,725,529
the carrying amount of the investment from Marina 6,934,100 - - - 6,934,100
District area of Lebanon.
Furniture and fixtures 2,396,602 151,102 - - 2,547,704
US$287million to US$298million as at
Freehold improvements 3,332,025 282,433 - -
In the same year, SIH raised additional funds December 31, 2008.
3,614,458
for SI through a private placement. Plant 1,853,266 - - (1,853,266) -
Machines and equipment 12,543,972 3,982,325 8,003,723 - 24,530,020
As a result of the private placement SIs 43,647,959 4,633,587 8,003,723 (1,853,266) 54,432,003
share capital and share premium amounted
to US$700,050,000 out of which SIH settled Accumulated
US$219,427,060 against an ownership Depreciation
percentage of 37.19%. Buildings 1,785,510 208,533 - - 1,994,043
Marina 374,110 138,682 - - 512,792
Furniture and fixtures 1,938,764 215,504 - - 2,154,268
The private placement memorandum and
Freehold improvements 2,090,482 312,980 - - 2,403,462
other signed agreements between Solidere Plant 1,297,058 185,326 - (1,482,384) -
and SI stipulate that Solidere and Solidere Machines and equipment 10,046,552 1,679,009 - - 11,725,561
Management Services sal will transfer to SI 17,532,476 2,740,034 - (1,482,384) 18,790,126
all the projects that they currently have
outside the Lebanese territories. In addition, Net Book Value 26,115,483 35,641,877
Solidere will grant SI the right to use the
Solidere brand name through a license
agreement and a none compete right.
Solidere Annual Report 2008

During the year ended December 31, 2008,

the Group transferred computer equipment
and installations (Broad Band Network)
16 ACCOUNTS PAYABLE
AND OTHER LIABILITIES
amounting to US$2,400,043 from real estate
development projects to fixed assets Accounts payable and other liabilities consist
(US$8,003,723 during the year ended of the following:
December 31, 2007).
DECEMBER 31, 2008 2007
During the year ended December 31, 2008, US$ US$
the Group transferred US$1,224,748 from real
estate development projects to fixed assets. Accounts payable (a) 37,738,376 39,683,157
Accrued charges and other credit balances (b) 10,456,334 18,310,542
During the year ended December 31, 2008, Taxes payable (c) 38,305,392 29,850,507
the Group transferred US$1,529,611 and its Provision for end-of-service indemnity and
other charges (d) 8,039,259 6,890,576
related depreciation in the amount of
Due to an associate and related party - 563,172
US$194,009 from investment properties to
Deferred tax liability Note 10 32,670 26,028
fixed assets.
Accrued interest payable 738,649 4,033,945
95,310,680 99,357,927
During the year ended December 31, 2008,
the Group transferred US$527,335 from fixed
assets to investment properties.
(a) Accounts payable as of December 31,
The depreciation for the year ended 2008 and 2007 include balances in the
December 31, 2008 was split between an aggregate amount of US$13.8million due to
allocation to inventory of land and projects in the Lebanese Government in consideration
progress, prepayment and other debit of the exchange of assets agreement
balances and a charge to the income explained in Note 33(f).
statement of US$573,750, US$262,937 and
US$4,512,679 respectively (US$983,218, (b) Accrued charges and other credit
US$262,549 and US$1,494,267 respectively balances as of December 31, 2007 include an
for the year ended December 31, 2007). amount of US$8.5million representing
proceeds received in respect of a
performance bond executed against a
contractor for improper performance of
contracted works under arbitration (Note
130 15 BANK OVERDRAFTS AND SHORT
TERM FACILITIES
131 33(j) ).

During 2008, an agreement was signed with

Bank overdrafts and short term facilities the abovementioned contractor whereby it
consist of the following: was agreed that all the arbitration raised
shall be cancelled. As a result, the liability
DECEMBER 31, 2008 2007 was offset against cost of inventory of land
US$ US$ and projects in progress (Note 11 a.3).

Bank overdrafts 4,523,728 1,290,555 (c) Taxes payable consist of the following:
Short term facilities 172,473,107 179,895,936
176,996,835 181,186,491 DECEMBER 31, 2008 2007
US$ US$

On August 2, 2007, the Group signed two July 5, 2008, the Group renewed this facility Accrued income tax 30,997,135 25,652,763
credit facility agreements with a local bank with the same bank. The new facility is VAT Payable 21,369 22,232
for US$75million and US$35million. These subject to an interest rate of three-month Taxes withheld 752,984 1,437,522
facilities are subject to an interest rate of one Libor plus 1.5% but not less than 4.5%. The Property tax payable 2,112,855 2,067,931
year Libor plus 1.7% and one year Libor plus covenants of the agreements stipulate that VAT additional tax assessment 670,059 670,059
1.5% respectively. These facilities matured on the Group maintain a maximum debt to Tax review assessment 3,750,990 -
August 3, 2008. The covenants of the equity ratio and banks loans, overdraft, and 38,305,392 29,850,507
agreements stipulated that the Group facilities to equity ratio of 2:1 and 4:1
maintain a maximum debt to equity ratio of respectively. In addition, the Group should
1:4 and a minimum equity balance of maintain receivables including loans, lease
US$1billion. This facility was renewed in 2008. contracts and notes receivables free from
any liens in the minimum amount of
On June 18, 2007, the Company signed a US$75million.
US$40million one year credit facility with a
local bank. This facility was subject to an On June 22, 2007, the Group signed a
interest rate of three-month Libor plus 1.25% US$50million one year credit facility with a
but not less than 6%. The covenants of the local bank. This facility was subject to an
agreements stipulate that the Group maintain interest rate that varies between one month
a maximum debt to equity ratio of 1:4 and a Libor plus 1.75% and three-month Libor plus
minimum equity balance of US$1billion. On 1.25%.
Solidere Annual Report 2008

Income Tax
The applicable tax rate in Lebanon is 15%
according to the Lebanese tax laws.
17 DIVIDENDS
PAYABLE General Assembly
Date
Dividend
per Share Declared
Settled up to
December 31
2008
December 31
2008
Payable
2007
Payable
US$ US$ US$ US$ US$
The accrued income tax for the years 2008
and 2007 was estimated as follows:

2008 2007 June 29, 1996 0.20 30,918,413 29,188,749 1,729,664 1,816,808
US$ US$ June 30, 1997 0.25 40,367,172 37,309,656 3,057,516 3,177,015
June 29, 1998 0.25 39,351,753 35,693,765 3,657,988 3,793,403
Profit before tax 214,327,398 249,857,943 June 23, 2003 Stock dividend - 244,404 21,861 27,485
Less: income/(losses) of subsidiaries 796,923 (68,028,316)
June 12, 2006 0.6 94,831,106 87,983,253 6,847,853 10,803,149
Add: Non deductible provisions and charges 9,228,266 4,806,251
June 22, 2007 1.00 155,093,702 140,436,728 14,656,974 26,594,937
Less: Non taxable revenues (13,193,954) (13,954,898)
July 15, 2008 1.00 155,090,832 122,073,126 33,017,706 -
Taxable income 211,158,633 172,680,980
62,989,562 46,212,797
Applicable tax rate 15% 15%
Accrued income tax 31,673,795 25,902,147
Add: Income tax provision subsidiaries 113,336 95,904
Total accrued income tax 31,787,131 25,998,051 The General Assembly held on July 15, 2008
Less: Tax on interest previously settled (789,996) (345,288) decided to distribute dividends on the basis
Accrued income tax payable 30,997,135 25,652,763 of US$1 per share. Accordingly, the Group
recorded dividends payable in the amount of
Total accrued income tax 31,787,131 25,998,051 US$147.3million net of distribution tax in the
Less: Deferred tax assets Note 08(c) (178,678) (331,960) amount of US$7.75million. An amount of
Income tax expense 31,608,453 25,666,091 approximately US$122million was settled up
to December 31, 2008.

During 2008, the Companys accounts for the
years 2004 to 2006 were reviewed by the tax
authorities which resulted in additional tax
liability in the amount of US$3.7million. An
amount of US$1.4million was charged to the
income statement for the year ended
December 31, 2008 and recorded under
Other taxes, and the balance was
132 transferred from provisions setup in previous
years. The Group settled these taxes in 2009.
The tax returns for the years 2007 and 2008
are still subject to examination and final tax
assessment by the tax authorities. Any
additional tax liability is subject to the results
of this review.
Municipality Tax
During 2008, the Group accrued for
additional municipality tax liability for
previous years in the amount of
US$2,326,425 recorded under Other taxes.
VAT
During 2007, the Companys VAT
declarations for the years 2003 and 2004
were subject to review and final assessment
by the tax authorities. As a result of this
review, an additional tax liability in the
amount of US$670,059 was accrued for and
charged to the income statement under
Other taxes.
Property Tax
Property tax payable in the amount of
US$2.11million as at December 31, 2008 is
The General Assembly held on June 22, 2007
decided to distribute dividends on the basis
of US$1 per share. Accordingly, the Group
recorded dividends payable in the amount of
US$147.3million net of distribution tax in the
amount of US$7.75million. An amount of
approximately US$140million was settled up
to December 31, 2008 (US$128million up to
133 December 31, 2007).
The outstanding balance of unpaid dividends
relates mostly to unclaimed dividends and
dividends pertaining to undelivered class (A)
shares.
18 DEFERRED REVENUES AND
OTHER CREDIT BALANCES
DECEMBER 31

Cash down payments and commitments

2008
US$
2007
US$

included under the caption Charges on on sale contracts 229,656,877 222,328,962

rented properties in the income statement Deferred rental revenue and related deposits 26,866,850 10,818,490
(US$2.07million as at December 31, 2007). 256,523,727 233,147,452

(d) The movement of provision for end-of- Cash down payments and commitments on
service indemnity and other charges is as sale contracts include balances aggregating
follows: to approximately US$226million that relate
to 10 sale contracts with an aggregate
potential gross sales value of US$579million
2008 2007 as of December 31, 2008 (US$211million
US$ US$
relating to 13 sale contracts with an
aggregate potential gross sale value of
Balance at the beginning of the year 6,890,576 4,463,259
US$826.5million as of December 31, 2007).
Additions 1,499,712 2,876,491
Settlements (351,029) (449,174)
Deferred rental revenue and related deposits
Balance at the end of the year 8,039,259 6,890,576
represent down payments on lease and
rental agreements and reservation deposits
for the rental of real estate properties.
Solidere Annual Report 2008
19 DEFERRED CREDITS UNDER
STRUCTURED CONTRACTS
Deferred credits under structured contracts
represented contracts executed with banks
and involving put and call options on
treasury shares which are classified as
interest bearing liabilities.
(a) The Group sold on September 7, 2007 to
a local bank, 4,360,000 shares (2,585,000 A
shares and 1,775,000 B shares) from
treasury shares with a sale back option to
the bank and a buy back option to the group
for a total consideration of US$74,992,000 at
US$17.2 per share. The sale back and buy
back option can be exercised at a strike price
of US$18.39 per share in the period starting
on March 10, 2008 and ending on September
10, 2008. The settlement is to be paid at the
latest on September 10, 2008, subject to
certain conditions specified in the contract.
The strike price represents the selling price
plus accumulated interest.
134
20 LOANS FROM BANKS AND
FINANCIAL INSTITUTIONS
DECEMBER 31
Local bank loan
Loan guaranteed by Export - Import
of the United States
Maturities of the loans from banks and
financial institutions are as follows:
DECEMBER 31
2008
2009
Local Bank Loan
The Company (seller) exercised the option to
buy back the shares during the specified
period and therefore the Group retained the
above mentioned shares. As a result, the
group settled the liability in the amount of
US$74,992,000, previously received and
related accrued interest payable in the
amount of US$5,188,400.
(b) The Group sold on September 7, 2007 to
a local bank, 5,540,000 shares (3,290,000 A
shares and 2,250,000 B shares) from
treasury shares with a sale back option to
the bank and a buy back option to the group
for a total consideration of US$95,288,000 at
US$17.2 per share. The sale back and buy
back option can be exercised at a strike price
of US$18.39 per share in the period starting
on March 10, 2008 and ending on September
10, 2008. The settlement is to be paid at the
latest on September 10, 2008, subject to
certain conditions specified in the contract.
The strike price represents the selling price
plus accumulated interest.
The Company (seller) exercised the option to
buy back the shares during the specified
period and therefore the group retained the
above mentioned shares. As a result, the
group settled the liability in the amount of
US$95,288,000, previously received and
related accrued interest payable in the
amount of US$6,592,600.
135
During 2008, interest in the amount of
US$8,175,885 was charged and recorded
under Interest expense in the income
statement.
2008
US$
2007
US$
1,000,000 3,000,000
1,347,054 4,041,163
2,347,054 7,041,163
2008 2007
US$ US$
- 4,694,109
2,347,054 2,347,054
2,347,054 7,041,163
In July 2001, a complementary loan
agreement in the amount of US$10million
was signed with a resident foreign bank. The
total amount of the loan was withdrawn up to
December 31, 2004. This loan shall be paid
in 10 equal semi-annual installments
starting October 25, 2004 and ending April
27, 2009. An installment of US$2million was
made during 2008 in addition to settlements
aggregating to US$7million from 2004 till
2007 and thus the balance of the loan
decreased to US$1million as of December resolutions of the High Appraisal Committee.
31, 2008. The loan is subject to an annual
interest rate of 3 months Libor plus 1%. The
Group shall maintain a pledged fund of not
less than 102% of all outstanding principal
and interest amounts, and should maintain a
debt to equity ratio not exceeding 25% and
total tangible net assets should not be less
than US$1billion free from any liens
including permitted liens.
Loan Guaranteed by Export - Import Bank
of the United States
In July 2001, the Group signed an Export
Financing Credit Agreement for the amount
of US$14.71million to support the purchase
of engineering and construction services and
equipment from the United States for the
waste treatment project. This loan is
guaranteed by the Export-Import Bank of the
United States and is financed by a resident
foreign bank. An amount of US$13.47million
had been drawn up to December 31, 2004.
Subsequent to that date, the Group made no
withdrawals. This loan shall be paid by 10
equal successive semi-annual installments,
the first of which shall be due and payable
on October 25, 2004. An installment of
US$2.7million was made during 2008 in
addition to installments amounting to
US$9.45million from 2004 till 2007 and thus
the balance of the loan decreased to
US$1.34million as at December 31, 2008.
This loan is subject to an interest rate of
0.25% per annum above Libor. According to
the contract terms, an irrevocable stand-by
letter of credit in the amount of
US$3.35million was submitted to the Export
- Import Bank of the United States.
Moreover, the Group is required to maintain
a minimum balance of cash and cash
equivalents of US$30million and the treasury
shares should not exceed 10,131,829 shares
or the equivalent of US$76million in
aggregate value. In this respect, the number
of treasury shares amounted to 9,909,098
shares with an aggregate value of
US$168,521,399 as at December 31, 2008
(9,906,298 shares with an aggregate value of
US$168,491,485 as at December 31, 2007).
21 CAPITAL
Capital consists of 165,000,000 shares of
US$10 par value, authorized and fully paid
and divided in accordance with Law 117/91
into the following:
Class A, amounting to 100,000,000 shares
represented contribution in kind of
properties in the BCD, based on the
All Class A shares were deemed to have
been issued and outstanding since the
establishment of the Group.
Class B, amounting to 65,000,000 shares
represented capital subscription in cash and
are all issued and fully paid at the
establishment of the Group.
Class A and Class B shares have the
same rights and obligations.
As of December 31, 2008, the Group had
14,445,252 A shares listed on the London
Stock Exchange in the form of Global
Depository Receipts (GDR) (14,476,898 A
shares as of December 31, 2007).
22 LEGAL
RESERVE
In conformity with the Companys articles of
incorporation and the Lebanese Code of
Commerce, 10% of the annual net income is
required to be transferred to legal reserve
until this reserve equals one third of capital.
This reserve is not available for dividend
distribution.
23 TREASURY
SHARES
This caption includes 9,909,098 shares class
(A) and (B) as of December 31, 2008
(9,906,298 shares as of December 31, 2007).
The treasury shares outstanding as of
December 31, 2008 and December 31, 2007
were stated at the weighted average cost.
According to its articles of incorporation, the
Group may purchase up to 10% of its share
capital without the existence of free
reserves, provided that it shall resell these
shares within a period not exceeding
eighteen months.
As of December 31, 2008 and 2007, this
caption includes 3,685,000 shares that were
acquired from sale of properties.
Solidere Annual Report 2008

24 REVENUES FROM
RENDERED SERVICES
DECEMBER 31 2008
US$
2007
US$ 30 BASIC/DILUTED EARNINGS
PER SHARE

Services rendered to a related party (Note 32) 5,863,908 2,262,480

Services rendered to clients 742,814 690,845
The computation of earnings per share is
Broadband Network revenues 819,923 -
based on net income for the period and the
7,426,645 2,953,325
weighted average number of outstanding
class (A) and (B) shares during each period
net of treasury shares held by the Group.

The weighted average number of shares to

DECEMBER 31 2008 2007
25 CHARGES ON
RENTED PROPERTIES US$ US$
compute basic and diluted earnings per
share is 155,092,069 shares for the year 2008
Depreciation expense (Note 12) 3,275,539 2,740,934 (155,147,918 shares for the year 2007).
Property taxes 2,617,131 2,262,480
Maintenance and other related expenses, net 2,452,934 2,066,882
8,345,604 7,070,296

31 NOTES TO THE CASH FLOW

STATEMENT

26 COST OF
SERVICES RENDERED
DECEMBER 31 2008
US$
2007
US$
(a) Non-cash transactions in the operating
and investing activities related to the
proceeds from recuperated properties are
Cost of services rendered to a related party 6,406,693 4,319,285 detailed as follows:
Cost of services rendered to clients 1,925 86,127
DECEMBER 31 2008 2007
Broad Band Network cost of services rendered 1,500,004 - US$ US$
7,908,622 4,405,412 Non-cash transfer of shares against
recuperated properties - (153,640)
Decrease in receivables from recuperated properties - (63,368)
- (217,008)
DECEMBER 31 2008 2007
27 GENERAL AND
ADMINISTRATIVE EXPENSES US$ US$
(b) Depreciation was applied as follows:
136 Salaries, benefits and related charges 13,879,041 12,787,089 137
Board of directors remuneration 144,000 144,000 DECEMBER 31 2008 2007
Administrative expenses 5,328,641 5,155,634 US$ US$
19,351,682 18,086,723
Depreciation of fixed assets - Note 14 5,349,366 2,740,034
The Group reallocated salaries, benefits and Depreciation of investment properties - Note 12 3,275,539 2,740,934
related charges and administrative expenses Less: Depreciation allocated to inventory of land
amounting to US$3.3million to construction and projects in progress and other debit
cost during the year ended December 31, balances Note 11 (836,687) (1,140,093)
2008 (US$2.8million during the year ended Depreciation charge for the year 7,788,218 4,340,875
December 31, 2007). During 2008, the Group
increased the salaries of its employees in
accordance with Decree 500 dated October (c) Interest expense consists of the following:
24, 2008.
DECEMBER 31 2008 2007
US$ US$

Interest charged as period cost 20,309,559 15,885,954

28 OTHER
INCOME
DECEMBER 31 2008
US$
2007
US$ Interest expense allocated to inventory of land
and projects in progress Note 11 197,238 638,613
Gain on sale of investment securities 645,911 - Total interest expense 20,506,797 16,524,567
Others 186,121 202,516
832,032 202,516

DECEMBER 31 2008 2007

29 INTEREST
INCOME US$ US$

Interest income from notes and accounts receivable 38,902,736 31,612,508

Interest income from banks 16,593,374 8,539,017
55,496,110 40,151,525
Solidere Annual Report 2008
(d) Non-cash transactions in operating and
investing activities include transfers from
inventory of land and projects in progress to
investment properties in the amount of
US$80,744,285 for the year ended December
31, 2008 (US$10,580,812 for the year ended
December 31, 2007).
(e) Non-cash transactions in operating and
investing activities include transfers from
inventory of land and projects in progress to
fixed assets in the amount of US$2,400,043
for the year ended December 31, 2008
(US$8,003,723 for the year ended December
31, 2007).
138
DECEMBER 31
Cash
Current accounts
Short term deposits
Bank overdrafts
32 RELATED PARTY
TRANSACTIONS
These represent transactions with related
parties, i.e. significant shareholders,
directors and senior management of the
Group, and companies of which they are
principal owners and entities controlled,
jointly controlled or significantly influenced
by such parties. Pricing policies and terms of
these transactions are approved by the
Groups management.
Cash and bank balances include
US$54,009,732 as of December 31, 2008
(US$162,113,039 as of December 31, 2007)
representing current bank accounts with a
local bank who is a significant but minority
shareholder of the Group.
(f) Non-cash transactions in investing
activities include the effect of change in fair
value of available-for-sale securities in the
amount of US$217,800 offset against
Cumulative change in fair value of
available-for-sale securities and Accounts
payable and other liabilities in the amount
of US$185,130 and US$32,670, respectively,
for the year ended December 31, 2008
(US$173,520 offset against Cumulative
change in fair value of available-for-sale
securities and Accounts payable and other
liabilities in the amount of US$147,492 and
US$26,028, respectively for the year ended
December 31, 2007).
(g) During the year ended December 31,
2008, the Group transferred US$1,224,748
from real estate development projects to
fixed assets.
(h) During the year ended December 31,
2008, the Group transferred US$1,529,611
and its related depreciation in the amount of
US$194,009 from investment properties to
fixed assets.
(i) During the year ended December 31,
2008, the Group transferred US$527,335
from fixed assets to investment properties.
(j) Cash and cash equivalents comprise of
the following:
139
2008 2007
US$ US$
88,252
7,921,544
85,026
11,064,074
278,613,353
309,513,061
(176,996,835) (181,186,491)
109,626,314 139,475,670
Bank overdraft and short term facilities
include US$110,453,028 as of December 31,
2008 (US$110,668,330 as of December 31,
2007) representing short term facilities with
a local bank who is a significant but minority
shareholder of the Group.
Certain directors are members of the boards
of directors of banks with whom the Group
has various banking activities.
General and administrative expenses include
legal fees in the amount of US$120,000 for
the year ended December 31, 2008 related to
one of the firms legal counselors who is
also a member in the Companys board of
directors (US$120,000 for the year ended
December 31, 2007).
The Group incurred various expenses on
behalf of its related parties whose total
balances due amounted to US$5,864,520 as
of December 31, 2008 (US$3,808,163 as of
December 31, 2007).
Aswaq Management and Services LLC
provided consultancy services to Beirut Real
Estate Management and Services sal
(BREMS) for the amount of US$27,344 for
the year ended December 31, 2007.
During 2008, the Group charged Solidere
International Limited, an associate,
administrative expenses amounting to
US$5,863,908 (US$2,262,480 for the year
2007), in addition to an amount of US$81,319
(US$322,470 for the year 2007) representing
payments on its behalf.
Total benefits paid to executives and
members of the Board of Directors
(including salary, bonus and others),
included within General and administrative
expenses, for the year ended December 31,
2008 amounted to US$2,924,476
(US$2,865,545 for the year ended December
31, 2007).
Income arising and expenses incurred from
the Groups transactions with other related
parties, other than those disclosed in the
financial statements, do not form a
significant portion of the Groups operations.
33 COMMITMENTS AND
CONTINGENCIES
(a) An agreement between the Company and
the Council for Development and
Reconstruction (CDR) was promulgated
through Decree No. 5665 dated September
21, 1994, duly approved by the Council of
Ministers. By virtue of this agreement, the
Company was granted 291,800m of the
reclaimed land surface (totaling 608,000
sqm) against the execution by the Company
of the sea landfill and infrastructure works.
(b) The total projected cost for completion of
the BCD project has been estimated by
management to be approximately
US$2billion. This amount is used as a base
for the determination of cost of sales.
(c) Commitments for contracted works not
executed as of December 31, 2008 amounted
to approximately US$46.5million
(US$88.5million as of December 31, 2007).
(d) A lawsuit was raised in 1999 against the
Group by the CDR claiming reimbursement
of an amount of LL5.4billion (US$3.6million)
plus interest. This balance represents
payments previously made by the CDR in
connection with the appraisal of the
properties in the BCD area and other tender
documents. No provision was set up against
this claim since, on the basis of the advice
received from the Groups legal advisor, the
directors are of the opinion that this claim is
not based on sound legal grounds.
The Group has submitted to the CDR
claims aggregating US$13.6million
representing mainly change orders to
infrastructure works in the traditional BCD
which were incurred by the Group on behalf
of the Government. These claims were
neither approved nor confirmed by the
concerned party nor recorded as receivables
in the accompanying financial statements.
(e) The Group is a defendant in various legal
proceedings and has litigations pending
before the courts and faces several claims
raised by contractors. On the basis of advice
received from the external legal counsel and
the Groups technical department, the
directors are of the opinion that any negative
outcome thereof, if any, would not have a
material adverse effect on the financial
condition of the Group.
(f) On June 7, 1997, the Group signed an
exchange agreement with the Lebanese
Government. By virtue of this agreement, the
Group acquired additional built up area of
approximately 58,000m and 556,340 Class A
shares in exchange for approximately
15,000m and the payment of US$38.7million
to restore governmental buildings.
US$25million has already been paid and
accounted for and the balance of
US$13.8million continues to be included
under accounts payable. According to the
terms of the agreement, the Group
undertook to build a governmental building
and to conclude ten finance leases over
seven years for certain buildings belonging
to the Lebanese Government. In 1999, the
government canceled the exchange and
finance lease agreement. The
implementation and the effect of
cancellation is not yet determined and has
not been reflected in the accompanying
financial statements.
(g) In prior periods, the Group submitted to
the Ministry of Culture and Higher Education
claims totaling US$17.7millions representing
compensation for delays that resulted from
excavation works. These claims were not yet
approved nor confirmed by the concerned
authorities nor recorded as receivables in
the accompanying financial statements.
Solidere Annual Report 2008

(h) The Group has as a stand-by letter of
credit in the amount of US$3,566,993 to be
gradually decreased starting June 2007 to
reach US$3,035,622 in June 2011. This
instrument is issued in guarantee of the
US$14.7million US Export Import Bank of the
United States facility whose outstanding
On June 21, 2004, the contractor requested The Group monitors capital on the basis of
arbitration in a second case against the the debt-to-capital ratio (gearing ratio). The
Group to confirm the right to extend the gearing ratio as at December 31, 2008 and
projects execution period and increase the 2007 was as follows:
cost of works. The total claims by the
contractor in this arbitration amounted to DECEMBER 31 2008 2007
US$32million representing the increase in US$ US$

balance amounted to US$1.35million as of the cost of works, other unpaid amounts and
Total consolidated liabilities 594,167,858 737,225,830
December 31, 2008 (US$4.04million as of amounts the contractor alleged to have been
Less: Cash and bank balances (291,703,019) (327,847,633)
December 31, 2007). Throughout its life, this illegally withdrawn by the Group from the
Total debt 302,464,839 409,378,197
stand-by letter of credit shall be fully performance bond mentioned above.
covered by a cash collateral (Note 07). Total equity 1,859,664,619 1,832,028,785
During 2005 and early 2006, both the Group Gearing ratio 16% 22%
(i) For the purpose of enhancing and and the contractor filed counter arbitrations
improving land value in Zokak Al Blat area against each other that were still pending as
and to settle the recuperation of a lot in that at December 31, 2007.
area, the Group signed in 2002 an agreement
with the Armenian Orthodox prelacy to
demolish the building on the recuperated lot
On January 30, 2008, the parties exchanged
post-hearing written pleadings summarizing
35 RISK
MANAGEMENT

and to transfer corresponding building rights their respective positions.

to another adjacent lot with minimum
building rights of 4,900m against ceding of
owners shares from both lots. Additionally,
a built up area of 5,335m (US$2,700,000)
remains as a contingent loss to the Group in
case the prelacy decides to build this area
within the next 10 years following this
agreement.
(j) During 2003, the Group entered into a
dispute with one of its contractors regarding
what the Group considered to be a defect in
the land remediation works performed by the
140 contractor. The contractor denied this issue
and commenced an arbitration in relation to
this matter on May 19, 2003. In the request
for arbitration, the contractor sought a non-
monetary relief that there is no defect in the
works performed, and made monetary
claims against the Group in the total amount
of US$1,079,533, in addition to claiming for
the payment of its legal and other costs
incurred in connection with the arbitration
for an amount of US$2,226,569. The Group
made counter claims for non-monetary relief
that there exists a defect in the works
performed by the contractor and claimed for
the payment of its legal and other costs
incurred in connection with the arbitration
for an amount of US$3,004,711. In 2004, the
Group collected the performance bond
amounting to US$8.5million. On July 12,
2004, the International Court of Arbitration
ruled that the contractor pay the Group the
sum of US$2,188,000 in respect of the
Groups cost of arbitration, and additional
costs incurred in the amount of US$170,000,
in addition to the execution of remedial
works at the contractors own cost. As a
result, the Group recorded a receivable in
the amount of US$2,358,000 in the
accompanying financial statements. During
2008, the above amount was offset against
cost of inventory of land and project in
progress in the balance sheet - Note 08(e).
During May 2008, an agreement was signed
with the above mentioned contractor
whereby both parties agreed to cancel all the
arbitrations raised against each other. In
addition, the agreement stated that the
Group receive an amount of US$43,094,872
of which US$8,494,875 was previously
settled. As a result, provisions in the amount
of US$12,604,170 were written back and
recorded in the income statement and the
balance was offset against cost of inventory
of land and projects in progress in the
balance sheet. The deposit and retention
payable in the amount of US$8,494,875 and
US$2,831,625, respectively, as at December
31, 2007 were offset against cost of inventory
of land and projects in progress in the
balance sheet (Note 11).
34 CAPITAL
MANAGEMENT
The primary objective of the Groups capital
management is to ensure that it maintains a
strong credit rating and healthy capital ratios
in order to support its business and
maximize shareholder value.
The Group manages its capital structure and
makes adjustments to it in light of changes
in economic conditions. No changes were
made in the objectives, policies or processes
during the years ended December 31, 2008
and 2007.
The capital structure of the company
consists of debt and equity. Debt consists of
total liabilities less cash and bank balances.
Equity comprises capital, reserves, retained
earnings, cumulative change in fair value
and surplus on sale of treasury shares less
treasury shares.
The Groups principal financial liabilities,
other than derivatives, comprise bank loans
and overdrafts, deferred credits under
structured contracts, deferred revenues and
other credit balances, dividends payable and
accounts payable and other liabilities. The
main purpose of these financial liabilities is
to raise finance for the Groups operations.
The Group has various assets such as
accounts and notes receivable and cash and
bank balances, which arise directly from its
operations. The main risks arising from the
Groups financial instruments are interest
rate risk, liquidity risk, foreign currency risk
141 and credit risk. The Board of Directors
reviews and agrees policies for managing
each of these risks which are summarized
bellow:
(a) Interest Rate Risk
The Groups exposure to the risk of changes
in market interest rates relates primarily to
the Groups long-term debt obligations with
floating interest rates. The following table
demonstrates the sensitivity to a reasonably
possible change in interest rates, with all
other conditions held constant, of the
Groups profit before tax.
Increase/decrease in Effect on profit before
basis points tax
USD
2008:
US Dollars +20 829,148
US Dollars -15 621,861
2007:
US Dollars +20 596,105
US Dollars -15 447,079
(b) Foreign Currency Risk
Currency risk is the risk that the value of a
financial instrument will fluctuate due to
changes in foreign exchange rates. The Group
is not materially exposed to currency risk
since the majority of its financial assets and
liabilities are denominated in U.S. Dollars or
in currencies pegged to the U.S. Dollar.
Solidere Annual Report 2008

(c) Credit Risk The table below summarizes the maturity

The Groups credit risk is primarily profile of the Groups financial liabilities as
attributable to its liquid funds receivables, of December 31, based on contractual
other debit balances and investments in undiscounted liabilities:
securities. The amounts presented in the
balance sheet are stated at net realizable
value, estimated by the Groups management
based on prior experience and the current Less than 3-12 1 to 5
economic conditions. On Demand 3 Months Months Years Total
USD USD USD USD USD
The Groups liquid funds are placed with
prime banks. Investments in securities are
December 31, 2008
not covered by collaterals. Other debit Bank overdrafts and
balances consist mainly of amounts due short term facilities - - 176,996,835 - 176,996,835
from related parties. Accounts payable and
other liabilities 19,935,809 - 58,516,731 16,858,140 95,310,680
The Group trades mostly with recognized, Dividends payable 62,989,562 - - - 62,989,562
credit worthy third parties and monitors Deferred revenues and
receivable balances and collection on an other credit balances - - 26,866,850 229,656,877 256,523,727
ongoing basis. Loans from banks and
financial institutions - - 2,347,054 - 2,347,054
The Groups credit risk exposure is spread 82,925,371 - 264,727,470 246,515,017 594,167,858
over 93 counter-parties; 6 customers
constitute 70% of the total exposure and 87
customers constitute the remaining 30%. December 31, 2007
The maximum exposure is the carrying Bank overdrafts and
amount as disclosed in Note 08. short term facilities 1,290,555 3,241,841 176,654,095 - 181,186,491
Accounts payable and
other liabilities 99,357,927 - - - 99,357,927
The Groups assets and liabilities are
Dividends payable 46,212,797 - - - 46,212,797
segregated by geographical area as follows:
Deferred revenues and
other credit balances - - - 233,147,452 233,147,452
Deferred credits under
Lebanon Middle East Europe Total structured contracts - - 170,280,000 - 170,280,000
USD USD USD USD Loans from banks and
December 31, 2008 financial institutions - 51,367 4,568,350 2,421,446 7,041,163
142 Total assets 2,142,380,808 296,444,933 15,006,736 2,453,832,477 143
146,861,879 3,293,208 351,502,445 235,568,898 737,225,830
Total liabilities 594,167,858 - - 594,167,858
Net assets 1,548,212,950 296,444,933 15,006,736 1,859,664,619

December 31, 2007

Total assets 2,267,994,768 290,043,609 11,216,235 2,569,254,612
Total liabilities
Net assets
737,225,830
1,530,768,938 290,043,609
- - 737,225,830
11,216,235 1,832,028,782 36 FAIR VALUE OF FINANCIAL
INSTRUMENTS

The fair values of financial instruments are

(d) Liquidity Risk not materially different from their carrying
Liquidity risk is the risk that an institution values.
will be unable to meet its net funding
requirements. Liquidity risk can be caused Market value has been used to determine
by market disruptions or credit downgrades, the fair value of listed available-for-sale
which may cause certain sources of funding assets. The fair values of loans, notes and
to dry up immediately. other financial assets, and borrowings and
other financial liabilities have been
The Groups objective is to maintain a calculated by discounting the expected
balance between continuity of funding and future cash flows at prevailing market
flexibility through the use of bank overdrafts interest rates.
and bank loans.

37 APPROVAL OF FINANCIAL
STATEMENTS

The Board of Directors approved the

financial statements for the year ended
December 31, 2008, on March 17, 2009.
Solidere Annual Report 2008

BOARD OF
DIRECTORS

Members of the Board

Raphael Sabbagha

Sarkis Demerjian
Abdulhafiz Mansour
Sami Nahas

Chairman and General Manager Mosbah Kanafani

Nasser Chammaa Basile Yared

Joseph Asseily
Fouad el Khazen

Vice Chairmen
Nabil Boustani
Maher Beydoun

General Manager
Mounir Douaidy

Maher Daouk
 SHAREHOLDERS

BOARD OF DIRECTORS

GENERAL MANAGEMENT
Chairman and General Manager
General Manager

Chief Financial Officer Assistant General Manager Assistant General Manager

(Position Managed by the General Manager) for Business Operations and Relations for Operations
with Public Authorities

Financial Treasury Corporate Legal Administration Sales Marketing Urban Tendering Hospitality Broadband Corporate Public Property Infrastructure Operations Real Estate
Accounting and Financial Finance and Business Management Contracting Management Network Reporting and Relations and Administration and Site Maintenance Development
Control Development and Systems Publications Communication Logistics and Technical
Procurement Services

IT/IS General Treasury Financial Legal Human Land Urban Tendering for Research Reporting Promotion Contract Infrastructure Real Estate Restoration
(MIS) Accounting and Cash Analysis Counsel Resources Sales Design Infrastructure and Editorial and Advertising Administration Execution and Operations and
Management and Modeling Activities Maintenance Maintenance

Corporate Taxation Stock Business Contract General Real Estate Town Tendering for Creative Artwork Media Recuperation Landscape CCTV New
Systems Management Planning Structuring and Services Leasing Planning Construction and Production Relations Execution and Surveillance Developments
Management Projects Maintenance Network

Investor Financial Budget Corporate International Beirut Development Procurement Website Events Public Car Parking Beirut Third-Party
Relations Statements Control Funding Projects Support Souks Control of Services Development and Activities Services Facilities Marina Developments
and Supplies

Risk Audit Financial Financial Business Property International International Property Site Logistics Technical Support
Management Relations Reporting Markets Development Control Projects Projects Management Support Services
Reporting and Communication Services
Publications
International Landscaping Relations
Projects Support and Public with Public
Space Design Authorities

International Property
Projects Support Fiscal
Management