DISCLAIMER

The information provided in this presentation is for general informational purposes only and readers should not construe the contents of this presentation as legal, tax, investment or other advice. All prospective investors should make their own inquiries and consult their own advisors as to legal, tax, investment, and related matters concerning an investment in the securities of Solidere and/or any related entity.

The information included in this presentation is provided - for information only.

Solidere and its agents, advisors, directors, officers, employees and shareholders make no representation or warranties, expressed or implied, as to the accuracy of such information and expressly disclaims any and all liability that may be based on such information or errors or omissions thereof.

Additionally, Solidere undertakes no obligation to comment on the expectations of, or statements made by, third parties in respect of the matters discussed in this presentation.

This presentation may contain forward looking statements including statements regarding intent, belief or current expectations with respect to its businesses and operations, market conditions and results of operations. Readers are cautioned not to place undue reliance on these forward looking statements. Solidere does not undertake any obligation to publicly release the result of any revisions to these forward looking statements to reflect events or circumstances after the date of this presentation or to reflect the occurrence of unanticipated events. While due care has been used in the preparation of forecast information, actual results may vary in a materially positive or negative manner.

AT A GLANCE p. 03

STRATEGIC HIGHLIGHTS p. 10

KEY ACTIVITIES p. 16

FINANCIAL HIGHLIGHTS p. 33

INVESTMENT DRIVERS p. 38

2

INVESTOR PRESENTATION July 2018

1. AT A GLANCE

p. 04 HIGHLIGHTS

p. 05

p. 07

p. 09

PROFILE

MASTER PLAN

MILESTONES

HIGHLIGHTS

A briefing on fundamentals and end of year achievements

PROFILE

An overview of

fact sheet and mandate

MASTER PLAN

A detailed breakdown of inventory by type and status and a map of the master plan

A timeline of the

milestones

MILESTONES

3

BY END OF 2017

Over $1.2 Billion in declared dividends since inception Cash & receivables of $428 Million against $529 Million of bank debt Low leverage (28% of Interest Bearing Debt to Equity) $6.2 Billion estimated value of remaining land bank and real estate properties Sustainable operations despite the absence of land sales, leading to $40 Million in net operational revenues About $109 Million provisions and write-offs taken in response to an unfavorable local economic environment

FUNDAMENTALS

Prime land bank Recurring income through the development of a rental portfolio

Sizeable portfolio of receivables Debt kept below 35% of assets book value since inception

4

Highlights

Legal Form

Lebanese Public Joint Stock Company

Listing

BSE

De-listed from LSE as of June 29, 2017

Paid-in Capital

$1.65B

Market Cap

$1.32B (as of December 31st, 2017)

Associates

Solidere International Limited 39.11%

BCD Cinemas SAL 40%

Joint Venture

BWD - 50%

Management Company

SMS - 100%

Maximum Shareholding limit per entity is 10%

Profile 86.9%

LEBANON

6.1% MENA

(excluding Lebanon)

0.7% EUROPE

6.2% THE AMERICAS

0.1% OTHER

60.06% 31.82%

8.12%

Lebanese RetailLebanese Banks & Fiduciary AccountsLebanese Institutions

Breakdown of Type of Shareholders in Lebanon (As of December 31st, 2017)

LEBANON

5

Shareholders by Region

A first of a kind in the region a wholly private company entrusted with rebuilding a city center

To Reconstruct & Develop a Land Bank of Prime Location

To Ensure the Preservation of City Heritage

To Reclaim from the Sea & Develop Land into a Waterfront District with 2 Marinas

Prime geographic location with lines of sight to both sea & mountains

Sate-of-the-art infrastructure

Fiber Optic Broadband Connectivity

Continuous Public Domain Maintenance

Profile (2) o

f tota

l pro

jec

t: pu

blic

&

lan

dsc

ap

ed

op

en

spa

ce

50%

6

Master Plan 49.8%

27.7%

8.5%

3.2%

6.3% 3.8%

0.7%

Master Plan BUA Guidelines

Residential

Offices

Mixed-Use

Retail

Hotels/Furnished Apts.

Government/Cultural

Religious

Guidelines are adaptive to market and town planning needs

47.4%

23.0%

11.9%

4.9%

6.4% 5.4% 1.1%

BUA Breakdown (As of Dec 2017)

Residential

Offices

Mixed-Use

Retail

Hotels/Furnished Apts.

Government/Cultural

Religious

4.69 M Allowable

1.72 M Developed

0.25 M Under

Construction/ Restoration

1.01 M Other Phases of Development

1.71 M Remaining BUA

Sqm BUA End of 2017

7

As per its mandate, Solidere has an allowable land bank of 4.69 M sq m BUA geographically limited to Beirut City Center.

It controls the developments in accordance with the master plan guidelines approved by the Council of Ministers

8

Master Plan (2) 2.46 M

Original BUA Traditional

1.57 M

Original BUA Waterfront

0.66 M Exempted & Recuperated

BUA Available Land Bank

As of December 2017

Total surface area is 1.89 M sqm including 0.95 M sqm public domain

FUTURE

Milestones

9

Infra & R.E. Developments

Corporate Actions

2029

Dividend Distribution

• Department Store to be Delivered to Operator

• Expected Completion of Eastern Marina Works

• Waterfront Area Infra. Completed

• Eastern Marina Works Started

• LSE Delisting & Termination of GDR Agreement with BNY Mellon

2017 2018 2019 2020

• End of Co. Lifetime as per Current Mandate

Beginning of waterfront park landscaping expected within this period

2021 2022 2023 2024 2025

• Western Marina

berth

• Restoration of Most Buildings Completed

2014 2008 2006 2003 1998 1999 2000 1995

• L-Building North Souks

2015 2016 2005 1994 1996 1997 2001 2002 2004 2013 2007 2009 2010 2011 2012

• Reclamation Completed

• South Souks

• Inception • BHC

Inception

• Beirut Marina 400 Car-Park

• Zaitunay Bay

• Cineplex North Souks

• Extension of Co. Lifetime to 35 Years

• Stock Split 10:1

• Embassy Complex

• Sea Front Defense Completed

• BCD Cinemas SAL

• Solidere International Incorporation

• BWD-JV

• Saifi Village

• BSE Listing

• LSE Listing

• UN House

• Traditional Area Infra. Completed

• Cosmocity North

Souks

• Yacht Club

• BHC Closure Started

2. STRATEGIC HIGHLIGHTS

p. 11 THE BUSINESS

MODEL

p. 12

p. 14

REVENUE STREAMS

MACRO CHALLENGES

THE BUSINESS MODEL

A description of the different components behind Solidere business model

REVENUE STREAMS

An explanation of

different sources of revenues

MACRO CHALLENGES

An abstract on macro challenges and their impact on company strategy

10

ADAPTATION PLAN

A briefing on Company approach to adapt to current environment

p. 15 ADAPTATION

PLAN

The Business Model

Cost Structure

• Cost of land • Cost of infrastructure • Cost of development • G&A

Value Propositions

• Vibrant City Center

• Historical, cultural, artistic, environment-friendly

• Residential sector, retail shops, and offices welcoming local and international headquarters

• Quality developments

Revenue Streams

• Land and R.E. sales • Rental portfolio • Rendered services • Associates

Channels/

Customers

• A pioneer in the

development and reconstruction of Beirut City Center

• Serving the Lebanese

community at large, real estate developers/architects, tenants, corporates

Partners/Activities

/Resources

• Structured within a mandate with the state

• Land bank in a unique location

• Solid experience of expert engineers and architects

• Collaborating with developers and architects

1994 Year of Inception

2029

35

Year of Termination in case of no

extension

Current Co. Lifetime

in Years

11

Revenue Streams

55% Land Sales Revenue

32% Gross Rental

Revenues

6% Net Revenues from

Associates

5% Gross Revenues from Rendered

Services

Revenues from Land Sales

Revenues from Rendered Services

Revenues from Associates

Revenues from R.E. Sales

Revenues from Rented Properties

2013-2017 Cumulative Breakdown

Land sales represent the main and largest potential of revenue but have an unpredictable fluctuating pattern especially given the instability of the country

Rental revenue has been growing and currently serves as a cushion to cover yearly operating expenses especially in periods of low land sales. It includes: - Real estate portfolio

- Land leases for temporary activities on the waterfront

- Marina - Parkings

Rendered services are essential to providing a city-like quality of life and have an indirect added value. It includes: - Property Management

- Broadband network services

Associates, more specifically Solidere International, are promising sources of revenues as their projects come into completion and their value is unlocked

12

2% Net R.E. Sales

Revenue

Revenue Streams (2)

Rental revenues have shown stability, earning in the range of $ 55 - $ 60 million per year since 2013

While land sales represent about 90% of total revenues in most of the earlier years of the life of the Company, their contribution have been decreasing and was null in 2017. Investors and developers are in a cautious mode causing land sales to take longer to materialize.

57%

65%

22%

73%

0%

3%

2%

3%

1%

5%

33%

23%

46%

20%

82%

0%

7%

23%

3%

3%

7%

3%

6%

3%

10%

$-

$50

$100

$150

$200

$250

$300

2013 2014 2015 2016 2017

Mill

ion

s

Gross Revenues from Rendered Services Net Revenues from Associates

Gross Rental Revenues Net R.E. Sales Revenue

Land Sales Revenue

13

$ - M

$60 M

$2 M

$8 M

FY 2017

Land Sales Revenue

Gross Rental Revenues

Net Revenues from Associates

Gross Revenues from Rendered

Services

Share result of associates, a non-operating revenue, have been included in the analysis as they are seen as a potential source of revenue in the future

$4 M Net R.E. Sales

Revenue

14

New regulatory requirements

Subdued investment sentiment

Major economic downturn Geopolitical

upheaval & domestic tension

• Streamlining • Cost containment • Delay of R.E. projects • Focus on land sales

COMPANY STRATEGY

The Company is reviewing its strategy to

adapt to existing challenges

Macro Challenges

15

Streamlining

• Downsizing to a more efficient organizational structure as a response to a downturn market

• Improving systems and processes

Cost containment

• Minimize Capex: real estate projects on hold

• Minimize G&A: lower G&A expected to materialize when staff reduction process is complete

Delay of previously planned real estate projects

• Previously planned real estate projects put on hold

• Current active projects: Department store Eastern Marina - infrastructure

Focus on land sales

• Applying prices that meet market conditions: prices vary with location, payment terms, client credit risk, local market

• Flexible payment terms

Adaptation Plan

INFRASTRUCTURE

3. KEY ACTIVITIES

p. 17 INFRASTRUCTURE

p. 18

p. 19

p. 24

LAND SALES

REAL ESTATE DEVELOPMENT

ASSOCIATES/ SUBSIDIARIES

An update of the

and projected infrastructure cost along with its progress status

REAL ESTATE DEVELOPMENT

An overview on completed and planned real estate projects with a breakdown of revenues throughout the years

A list of the

associates/ subsidiaries with a detailed analysis and focus on Solidere International growth potential, objectives and projects

ASSOCIATES/ SUBSIDIARIES

16

LAND SALES

A snapshot of the

land sales and its depleting land inventory

Infrastructure

Solidere was granted development rights in the Waterfront District in exchange for putting in a complete infrastructure within the BCD

Infrastructure in both traditional and reclaimed part is already fully complete

While the 78,000 sq m Waterfront City Park is scheduled for a later delivery date, works on the Eastern Marina started in 2017

0

200

400

600

800

1,000

1994 1997 2000 2003 2006 2009 2012 2015

US

D

Mill

ion

s

Traditional & Reclaimed Areas Infrastructure Cost

Cumulative Reclaimed Infrastructure Cost

Cumulative Traditional Infrastructure Cost

$253 M Cum. Traditional

Infra Cost

$663 M Cum. Waterfront

Infra Cost

$916 M Total Cum. Infra Cost

17

Yearly average for land sales contracted from 1995 to 2017 is 90K sq m BUA. However, nowadays, we are witnessing a lower investment appetite.

0

100,000

200,000

300,000

400,000

1994 1997 2000 2003 2006 2009 2012 2015

Yearly Land Sales

Land sales contracted(sqm BUA)

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

1994 1997 2000 2003 2006 2009 2012 2015

Depleting local inventory

Remaining landinventory (sqm BUA)

Land Sales

2.08 M Cumulative

Land & R.E. Sold

0.23 M Real Estate

Owned

1.71 M Land Available

for Sale

18

Given the size of land sale transactions, the Company offers payment facilities to developers:

- A minimum of 25% of the sale amount is paid upfront - Up to 75% is financed through promissory notes

over 5 years with up to 3 years of grace period

Sqm BUA As of end 2017

XX% - USD

XX% - SQM

Residential

XX% - USD

XX% - SQM

Offices

XX% - USD

XX% - SQM

Retail

Includes one time backed revenue from UN House rental

FY 2016

As of end 2017, total leasable space of real estate rental portfolio stands at about 160K sq m

19

0

10

20

30

40

50

60

70

1997 2000 2003 2006 2009 2012 2015

Mill

ion

s

Revenues from rented properties

The development of real estate projects ensures sustainability of income and adds value to the area

magnet projects: - Beirut Souks - UN House - Embassy Complex - Saifi Village

Given current macro challenges, the Company is witnessing a deceleration/stabilization of rental income growth rate

Real Estate Development

Real Estate Development (2)

BEIRUT SOUKS

South Beirut Souks consists of about 54K m2 of

leasable floor with about 200 outlets

A state of the art architecture, a blend of

innovative contemporary design and historic

preservation

A connecting bond between the pre-existing

city center and the newly created waterfront

A semi open-air structure with consistent shop

front design specifications and guidelines for a

harmonious blend

A regional destination for a redefined shopping

and leisure experience

20

132 Number of

Rented Shops

16 Number of

Rented Offices

1 Fitness Center

23 Number of

Rented Cafes & Restaurants

Real Estate Development (3)

North Beirut Souks - cinema &

entertainment complex using cutting edge

technology with special visuals and

exceptional vibrancy consists of:

- Cinemacity 12K sq m with 12 regular

theaters and 2 VIP screening rooms

delivered end 2013

- Retail space six ground floor

boutiques with an area of 856 sq m

delivered in 2014

- Food Court hosting four leading

restaurants around a common seating

area and circular ceiling, which evokes a

giant carousel delivered in 2014

- Cosmocity a family entertainment

center, hub for the latest in gaming

technology with an area of 1,470 sq m

delivered in 2015

- L-shaped building accommodating

three restaurants with an area of 3,722

sq m delivered in 2016

22

684,972 Number of

Cinema entries FY 2017

14 Number of

Theaters

2,079 Number of Seats

770 Food Court Area

in SQM Department store designed by the late

renowned architect Zaha Hadid

expected delivery in 2019

Associates/ Subsidiaries

Through partnering with associates and exchanging expertise, Solidere enters into attractive projects to diversify its revenues while leveraging its know-how

Key partnerships:

- Solidere International (SI)

- Beirut Waterfront Development (BWD)

- BCD Cinemas SAL

24

39.11% Solidere

International

50%

Beirut Waterfront Development

40% BCD Cinemas

SAL

Associates - BWD

An all year destination at the heart of Beirut ZAITUNAY BAY

Private Space

Quayside strip - accessible through seven pedestrian access points with underground public parking facilities

Restaurants and cafés along the marina, with roofs at corniche level forming a continuation to the corniche promenade

Exclusive retail outlets

Club & Furnished and Serviced Apartments building

39 apartments for sale remaining (of which 9 are leased as suites) out of 54 in total

Yacht club

Public Space

Beautifully landscaped public areas featuring

A boardwalk along the length and adjacent to the Western Marina

50-50 J.V. Solidere/

Stow

14,000 Sq m BUA

Quayside Strip

6,000 Sq m BUA

Club & Apartments

25

Associates - SI

Place & date of incorporation

DIFC, 7 June 2007

Legal Form

Company limited by shares

Paid-in-Capital

$700 million raised through a private

placement offering

Solidere Share Ownership

39.11%

Management Control

Retained by Solidere

investment at cost

$238 million (as of end 2017)

current share at book

$390 million (as of end 2017)

SI creates a growth potential for Solidere through: increasing income from rendered services future dividend income

Business Activities

Master Development

Real Estate Development

Land Development

Development Management

Property Management

Value-Added Services

Scope of existing projects

United Arab Emirates

The Kingdom of Saudi Arabia

Lebanon

27

54.02% Lebanese

Individuals & Institutions

17.11% MENA Institutions

14.66% International

Funds & Institutions

www.solidereinternational.com

3.89% MENA

Individuals

Shareholders Breakdown

Al Zorah Development Ajman, UAE www.alzorah.ae

A REFINED COASTAL LIVING DESTINATION THAT CAPITALIZES

ON ITS GEOGRAPHIC POSITION AND RICH EXISTING

ECOSYSTEM

Tourist destination & mixed use developments 30 min drive

from Dubai airport

39% partnership with Government of Ajman & local

developers

About 5.4 million sq m of lush coastal land

Al Zorah projects delivered include:

Golf Club comprised of a golf course and a golf club house.

Golf course inaugurated in 2015, crafted by Nicklaus Design

and managed by Troon Golf

Golf Villas Phase I an exclusive collection of villas and

townhouses

Hotels and Resorts Oberoi Hotel already operational

Marinas Marina 1 opened in 2017

Various activities through land leases

28

Associates - SI

The Oberoi

29

Associates - SI

Qortuba Oasis Riyadh , KSA www.wadiqortuba.com

A LIVABLE AND SUSTAINABLE DEVELOPMENT

Residential compound for expats with retail operations

to the north east of Riyadh

85% ownership

270,350 sq m of land area

Adjacent commercial strip of 30,000 sq m BUA

30

Golden Tower Jeddah, KSA www.goldentower.com.sa

A UNIQUE LIVING EXPERIENCE IN APARTMENTS WITH

REFINED INTERIORS, FLEXIBLE SPACE CONFIGURATION, AND

A WIDE VARIETY OF LAYOUTS

50% Joint Venture with local partner

48 floors, 71 apartments, 2000 sq m landscaped gardens

Unit sizes range between 315 sq m to 813 sq m

Advanced stage of construction Associates - SI

Park Lane Riyadh, KSA

AN EXCLUSIVE RESIDENTIAL COMMUNITY OF 30 VILLAS IN

THE UPSCALE DISTRICT OF HITTIN

Park Lane targets young Saudi executives seeking

affordable modern luxury

Land area of 14,811 sq m

22 courtyard villas, 8 grand villas

Golden Tower

Rayat Obhur Jeddah, KSA

A PRIME RESIDENTIAL NEIGHBORHOOD IN EMERGING OBHUR

50% ownership in a real estate fund

500,000 sq m total land area

212,000 sq m Residential

108,000 sq m Commercial

180,000 sq m Public Domain 31

Al Malga Riyadh, KSA

A DISTINCT CONTEMPORARY COMMUNITY EMPHASIZING

CALM AND TRANQUILITY AND AMPLE OPPORTUNITIES FOR

INDOOR-OUTDOOR LIVING

50% ownership in a real estate fund

1 million sq m total land area

398,000 sq m Residential

193,000 sq m Commercial

409,000 sq m Public Domain

LAND DEVELOPMENT PROJECTS

Execution of infrastructure

Land sales for residential and retail use

Associates - SI

Al Malga

Uptown Park Hazmieh, Lebanon

A UNIFIED SCHEME TO ADD VALUE AND PRESERVE HARMONY

Mixed use development to the south east of Beirut

35% partnership with local investors

90,921 sq m of land area in addition to 15,826 sq m of

adjacent land for sale

625 sq m to 10,000 sq m size of plots for development

32

Associates - SI

Uptown Park

Tilal Obhur Jeddah, KSA

A SEMI-GATED COMMUNITY IN A BEAUTIFUL LANDSCAPE

An upscale residential neighborhood for young Saudi

professionals

56% ownership in a real estate fund

184,500 sq m total land area

86,000 sq m Residential

27,100 sq m Commercial

71,400 sq m Public Domain

4. FINANCIAL HIGHLIGHTS

p. 34 CONSOLIDATED

EXTRACTS

p. 36 SELECTED RATIOS

CONSOLIDATED EXTRACTS

A comparative overview on the

consolidated financial status

SELECTED RATIOS

An overview on historical key financial ratios

NAV CALCULATION

An internal analysis

net asset value

A snapshot on

historical stock performance

STOCK PERFORMANCE

p. 37

p. 38

NAV CALCULATION

STOCK PERFORMANCE

33

Consolidated Extracts Consolidated Balance Sheet Extracts

2017 USD M

2016 USD M

2015 USD M

2014 USD M

2013 USD M

Cash & bank balances 40 112 136 159 177

Receivables & asset-backed securities

387 555 536 625 516

All other assets 2,285* 2,211 2,246 2,180 2,181

Total Assets 2, 712 2, 878 2,918 2,964 2,874

Current bank facilities 231 310 556 548 553

Long term bank debt 298 299 132 110 133

Other liabilities 283 254 272 241 237

Total Equity 1,900 2,016 1,957 2,064 1,951

Equity 2,712 2,878 2,918 2,964 2,874

In 2016, the Company started settling part of its short term bank debt and converted a major part to long term as a measure to balance and spread short term maturities over a longer period, with no major interest rate increases.

1.16 B in land inventory and $0.59 B of investment properties that are booked at cost. Market values are estimated at $4.9 B and $1.2 B as of end 2017 respectively. 34

Consolidated Extracts (2)

Consolidated Income Statement Extracts

2017 USD M

2016 USD M

2015 USD M

2014 USD M

2013 USD M

Gross revenue 67 266 91 239 162

Gross margin 15.05% 70.87% 60.64% 75.56% 69.51%

G&A (35) (35) (34) (34) (31)

Operating Margin 7.02% 64.24% 37.65% 66.00% 56.07%

Provisions and write offs* (109)** (30) (118)** (7) (7)

Net interest income (expense) (12) (17) (15) (14) (13)

Share result (associates & JVs) 2 10 28 19 0.3

EBT (121) 93 (88) 131 48

Net Profit (116) 75 (87) 114 42

35

* Provisions are taken mainly for land receivable portfolio balances; as well as for tax assessments, among others

** In 2015, a provision of about $88 M was exceptionally taken for the cancellation of two sales contracts. In 2017 provision for land sales receivable includes provision taken for discounts that would be given to clients against early maturities settlements.

Selected Ratios

2017 2016 2015 2014 2013

EPS [USD] (0.73) 0.46 -0.53 0.71 0.26

Dividends Payout Ratio - - NA 46.50% -

DPS - - 0.22 0.33 -

P/NAV 0.22 0.27 0.25 0.24 0.22

P/BV 0.69 0.85 0.92 0.88 0.91

ROAE NA 3.79% NA 5.66% 2.21%

ROAA NA 2.60% NA 3.90% 1.49%

Debt Indicators

Capitalization Ratio (Interest Bearing Debt to Capital Ratio)

21.78% 23.18% 26.02% 24.19% 26.02%

LT Debt to Equity Ratio 15.69% 14.81% 6.76% 5.33% 6.83%

Total Liabilities to Equity Ratio 42.73% 42.77% 49.04% 43.57% 47.30%

Total Liabilities to Assets Ratio 29.94% 29.96% 32.91% 30.35% 32.11%

36

NAV Calculation

$ Billion

Land Inventory 1.71 million sq m BUA 4.76

Real Estate Portfolio

Existing Buildings 0.53

Beirut Souks (including land plot for Department Store) 0.87

Total Real Estate Portfolio 1.40

Cash and bank balances 0.03

Prepayments and other debit balances 0.06

Receivables and asset-backed securities 0.39

Investment in Associates and Joint Ventures 0.29

Liabilities -0.81

NET ASSET VALUE 6.11

Number of shares outstanding (as of July 31st, 2018) NAV/share (July 31st, 2018) July 31st, 2018 closing price

165 million

$ 37.06 $ 7.32

This analysis needs to be adjusted for the NPV related to the timing of sales and cash inflow from sales backlog. In addition, the valuation of SI in this table is based only on

underlying projects at present time

37

June-08 $37.17

June-17 $7.74

$-

$5

$10

$15

$20

$25

$30

$35

$40

Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18

End of month SOL_A closing

Stock Performance

Since 2007, SOL_A registered a daily-closing record high of $39.80 (July 7, 2008), its all time high, and a daily-closing record low of $7.70 (June 30, 2017), noting its all time low was in Sep 2001 and again in Oct 2002, at $4.00

38

5. INVESTMENT DRIVERS

MACRO

A look at the

economic health through key indicators

REAL ESTATE MARKET

A detailed summary of the Lebanese real estate market performance

MICRO

key investment drivers

Highlights on the key opportunities and risks facing the Company

OPPORTUNITIES & RISKS

p. 40 MACRO

p. 41

p. 43

p. 44

REAL ESTATE MARKET

MICRO

OPPORTUNITIES & RISKS

39

Macro

40

- Local community strained by the Syrian refugees representing about ¼ of the Lebanese population --> resolution of Syrian conflict would return Lebanon GDP to its potential growth of 4%, as per IMF

- Oil & gas sector present a genuine long-term opportunity for the local economy as exploration and production licenses were finally awarded mid December 2017

- Presidential election at end of 2017 and prime minister appointment along with parliamentary

elections in Q2 2018 potentially leading to: - - needed reforms and adjustments

1.2%

2.2%

1.0% 1.5%

6.7% 6.8%

1.5%

3.2% 2.3%

1.7%

7.3%

6.5%

0%

2%

4%

6%

8%

Lebanon MENA Brazil Russia India China

Real GDP Growth

2017 2018e

19.44 18.60

15.60

27.83

7.18

16.66

19.99 19.24

16.20

28.96

7.78

18.07

0

5

10

15

20

25

30

35

Lebanon MENA Brazil Russia India China

USD

Th

ou

san

ds

Per Capita GDP (PPP)

2017 2018

Gold Reserves Billion USD

134.75% Net Debt/GDP

1.2% Real GDP Growth

-1.38 Trade Balance

Billion USD

18.03

Lebanon Dec 2017

Source: IMF

Source: IMF

0%

5%

10%

15%

20%

25%

0

2

3

5

6

8

9

11

12

14

15

1Q13 3Q13 1Q14 3Q14 1Q15 3Q15 1Q16 3Q16 1Q17 3Q17

Tho

usa

nd

s

Housing Loans

Housing Loans % of Total Credit

Investment-friendly environment Property tax amongst the lowest in the region Sound legal framework with equal rights to both local and foreign investors Non-speculative sustainable demand

Real Estate Market

Credit Facilities

Bank lending to R.E. sector is well regulated by the Lebanese Central Bank (thus preventing a R.E. bubble)

Local developers mostly rely on their own equity and off-plan sales more than on debt financing

A good chunk of presale funds adds to this financing especially in upper end of the R.E. market

Source: Central Bank

41

Demand for R.E. mirrored by the value & number of R.E. sales transactions:

CAGR (2013-2017)

YoY Growth

2017/2016

Q1 2018/ Q1 2017 Growth

Number of R.E. Sales Transactions

1.53% 14.46% -16.98%

Value of R.E. Sales Transactions

3.40% 18.48% -14.03%

The value of R.E. sales transactions picked up in 2016 and increases its upward trend in 2017, following the significant drop in 2015

7,000

8,000

9,000

10,000

50,000

60,000

70,000

80,000

2013 2014 2015 2016 2017

Va

lue

($

M)

Number of R.E. sales transactions

Value of R.E. sales transactions ($ Mn)

Real Estate Market (2)

Investment in the R.E. market reflected by cement deliveries, the coincident indicator for construction activities

The negative growth of construction area permits (a leading construction indicator) in Q1 2018 reflects a potential slowdown in the future activity of real estate projects

CAGR (2013-2017)

YoY Growth

2017/2016

Q1 2018/ Q1 2017 Growth

Construction Area Permits

-2.39% -4.12% -14.95%

Cement Deliveries -3.06% 2.69% -1.37%

4.0

4.5

5.0

5.5

6.0

-

5

10

15

2013 2014 2015 2016 2017

CA

P (

M

SQ

M)

Construction area permits (Mn sqm) Cement deliveries (Mn Tons)

Based on latest publicly available data 42

Prime land bank in the heart of the capital

Highly competitive as one of very few proven city makers

Strong Brand Name

Healthy Balance Sheet

Sizeable receivables portfolio

Sustainable growth potential through diversifying revenue streams

Relative minimal cash outlays foreseen to finish the infrastructure

Commitment to dividend distributions subject to level of profits and liquidity

Flexible and sound financial and operational strategies

Adaptability to fluctuating market conditions and economic climate

43

Micro

Opportunities & Risks

Opportunities:

Anticipated appetite to buy lots in reclaimed area now that infra works are completed

High value of remaining land bank

Minimal remaining capex

SI potential

Risks:

Geopolitical risk

Local economic downturn

Local instability

Illiquid stock market

44