Political unrest in Syria is weighing on Lebanon's biggest developer. Solidere has lost almost 14 per cent of its market value in the past six months after the tourism and hospitality industry in Lebanon contracted.
The country's economy grew by just 2 per cent last year compared with 7.5 per cent in 2010.
Solidere's shares have declined from US$16.16 in mid-August to $13.90 on the Beirut Stock Exchange amid expectations of disappointing fourth-quarter results.
"Tourism in the Arab world has seen a shift from traditional destinations like Lebanon, Egypt and Tunis, with visitors preferring to travel to the Gulf region instead," said Wadah Al Taha, the chief investment officer at Al Zarooni Group, an investment company in Dubai.
Solidere, also known as the Lebanese company for the Development and Reconstruction of the Beirut Central District, was launched in 1994 with the aim of rebuilding infrastructure that was destroyed in the country's civil war.
Beirut Central District, which spans 190 hectares, has a commercial souq, in addition to hospitality and residential units.
But property sales, the mainstay of Solidere's business, slowed after the Arab Spring, with prices down 2.7 per cent in real terms, according to research by Bank Audi.
Property values had been steadily increasing from 2008 until the start of last year. Tourism revenue, which has a direct impact on the company's rental income, declined 24.4 per cent last year, according to figures from the UN's World Tourism Organization.
The IMF this month warned that the country's economy was at risk if the unrest in neighbouring Syria escalated.
"Downside risks are high due to the uprising in Syria," the agency said on February 10.
Solidere has sought to diversify out of Lebanon. It launched its associate Solidere International in 2007 in the UAE and prepared the master plan of Al Zorah for Ajman. The company pre-sold 30 per cent of the project, and was in the tendering phase when local markets crashed in 2008.
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