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April - June 2005

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NEWCOMERS and OLD TIMERS

Retail openingsAroma accessoriesAl-Azhari restaurantBonpoint children’s wearCotton & Silk fabricsCoyote's Deigratia Diesel fashionElie SaabEscape loungeEve hair extensionsGarden CaféIndia restaurantKaramna restaurant

Kodak shopLa Perla ladieswearL’Assiette restaurantLe Georges restaurantMassaya Beirut restaurantMozzarella restaurantNext 2 restaurantSalvatore Ferragamo Sinbad loungeSpark caféThe Souk artisanat

Business and servicesAbou Merhi Cruises offices Atriumbuilding; sales shop Maarad street Banque du Crédit National, 157 SaadZaghloul streetDaza Fashion headquarters and salesshop, 151 Saad Zaghloul streetLTU airlines, Starco centerOracle systems, 157 Saad Zaghloul streetSiemens AG relocated from lot 200 to lot1301 Marfaa, occupying three floors ofthe Solidere six-story building.

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Opening soonBellucci’s restaurantDji-Han jewelryFrancesco SmaltoFratelli GioielliGalerie EnsemblesIncanto restaurantLa Tabkha restaurantPetit Bateau children’s wearSapphire, house of gemstonesStarbucks Coffee

Visit Beirut city center restaurants and shops on www.solidere.com by clicking on the BCC Beirut City Center banner

General manager Mounir Douaidy with Messrs.Georges Obaji and Youssef Abillamaa of Bemo House.

Solidere chairman Nasser Chammaa with Mr.TayebBaker of Beirut Trade and his team.

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Groundbreaking and foundation stoneMr. Saad Rafic Hariri laid on May 25 thefoundation stone for Capital Plaza, a residentialcomplex on lot 1464 Mina El Hosn.The ceremonywas attended by Solidere chairman NasserChammaa, Saudi and Lebanese former financeministers Mohamad Aba Al-Khail and FouadSiniora, Saudi ambassador Abdel Aziz Khoja andother dignitaries.

A groundbreaking ceremony for the Avenue Plazaresidential development on lot 1444 Mina El Hosntook place on the same day.

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$15.0

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In view of the brilliant financial results achieved in the past year,this message should be quite cheerful. But on February 14, tragedystruck, and Rafic Hariri is no longer among us...

Solidere earned over US$65 million in net income, US$54 millionafter tax.The sustained demand for our real estate products,US$11 million in sales and US$19 million in rental income, came as no surprise. Particularly gratifying was the increase in land salesto a record high of US$171 million, representing 158,000 sq m offloor space.The balance sheet at year end shows a cash position of US$101 million, a reduced debt of US$234 million and a debt-equity ratio of less than 14%.The debt fell to US$187 million byApril 2005, and our objective is to rapidly reduce and eliminate itwithin three years to increase profitability, distribute dividends andenhance share prices.

Our land-for-share sales scheme was an important incentive toinvestors-developers.We also offer land with associated real estateand architectural concepts, expediting development to the benefitof all. Local and foreign architectural firms were commissioned toprepare designs for a number of sites, with a focus on residentialclusters in Wadi Abou Jamil and Saifi Village extensions.

With the Beirut Souks operational in the next 24 months, weintend to firm up sale agreements of the units in the gold souks,but will keep and manage the remaining retail space, expecting tomore than double our rental income as the project fully develops.The Beirut Marina is welcoming a large number of boats andinternational events. Real estate development is soon to start nearthe marina before evolving towards the new waterfront district.

A dramatic turnaround in the share price brought it close to the US$10 nominal value in the Beirut Stock Exchange, and in the Kuwait Stock Exchange where it is trading since March 2005.Our objective is to ensure that the share reaches a level reflectingits true value.

Recent deals have raised our sales backlog to US$146 million,representing 140,000 sq m of floor space.This sustained marketinterest, by enhancing Beirut city center property values, shouldgenerate further positive impacts on Solidere’s results and shareperformance. It is therefore our belief that our Company will be in an excellent shape.

(Extracts from the Solidere Annual Report 2004 Chairman’s Message, May 4, 2005)

Share performance during the 2nd quarter

Share B - Daily Closing Prices VolumeSha

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1 Apr 05 25 Apr 05 17 May 05 8 Jun 05 30 Jun 05

1 Apr 05 25 Apr 05 17 May 05 8 Jun 05 30 Jun 05

CHAIRMAN’S LETTER

An optimistic investor sentiment prevailed in the local market,with most shares listed on the Beirut Stock Exchange rising tounprecedented levels since the end of the last decade.The Solidereshares were boosted, especially towards the latter part of thequarter when the successful holding of parliamentary electionsgenerated a positive climate in the country.

The shares shot up to levels unwitnessed since December 1997,on improved breadth, and Solidere was put on the radar screens of many emerging market funds from the US and Europe. Share Atraded between a low of US$8.60 and a high of US$13.49, andclosed the quarter at US$12.79, a 43.06% increase compared tothe previous quarter. Share B traded between a low of US$8.53and a high of US$13.40 and closed the quarter at US$12.41, a39.43% increase over the previous quarter.

Around 18.5 million shares of both classes were exchanged duringthe quarter, a 61% increase over the previous quarter.

The GDRs, which are traded in the London Stock Exchange,pushed also to their highest level in seven years, closing thequarter at around the US$14.1 level, a 34.28% increase comparedto the previous quarter closing level.

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BUSINESS and FINANCIAL NEWS

Messrs. Fawzi Farah of Capital Plaza, Saad Hariri, Mohamad AbaAl-Khail and Nasser Chammaa.

Solidere annual general meetingHeld on June 6, 2005, Solidere annual general meeting, presidedover by chairman Nasser Chammaa and attended by the board of directors, took the following resolutions:Approved the audited financial statements for the year 2004;taking note of the net income for the year of US$54,103,898,resolved to transfer the amount to retained earnings.Granted the chairman and members of the board theauthorizations stipulated in articles 158 and 159 of the Lebanese commercial code.Cleared the chairman and members of the board of any liability for matters relating to their management of the Company in 2004.Approved the board of directors’ proposal to dedicate lot 1525Marfaa, with a 2,728 sq m land area and 2,000 sq m in buildingrights, for the erection of the Rafic Hariri memorial and museum;and to cede the lot against a nominal amount of US$1 to the lateMr. Hariri’s heirs, as a token of loyalty, love and sincerity to themartyr prime minister, who devoted his life to the reconstructionof Lebanon and of its capital’s city center.

Sale agreementsA number of sales totalling 115,685 sq mof floor area were concluded during thelast quarter.1422 Hosn s.a.l. purchased lot 1422 MinaEl Hosn for a residential development with26,000 sq m of floor area on 2,506 sq mof land.Al Wadi Grand Residence s.a.l. purchasedlot 1392 Mina El Hosn for a residentialdevelopment with 24,000 sq m of floorarea on a 7,819 sq m land area.1368 Mina El Hosn purchased lot 1368Mina El Hosn on a 2,424 sq m land areafor a residential development totalling13,089 sq m of floor area.Beirut Trade s.a.l. purchased lot 1370 MinaEl Hosn for a residential development with11,778 sq m of floor area on a 3,706 sq mland area.Bemo House s.a.l. purchased part of lot1363 Mina El Hosn on 1,459 sq m of land,for a 10,831 sq m mixed use development.

Lots 1068 and 1069 Saifi, with 1,617 sq mof land, were sold to Al Mada s.a.l. for a6,350 sq m residential project.Nicolas Maurice Sehnaoui purchased lot1078 Saifi for a residential and officedevelopment totalling 5,350 sq m of floorarea on a 1,483 sq m land area.Lot 1059 Saifi, with a 1,221 sq m land area,was sold to Saifi Square s.a.l. for a 5,095 sq mresidential project.DBA 2 s.a.l. bought lot 1439 Mina El Hosnfor a residential development totalling4,520 sq m of floor area on 1,080 sq m of land area.DBA 3 s.a.l. bought lot 1395 Mina El Hosnfor a residential development totalling3,438 sq m of floor area on 873 sq m ofland area.Merit Real Estate s.a.l. bought part of lot1504 Marfaa on a land area of 1,213 sq m,for a 5,234 sq m mixed use development.

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2,771,225 2,247,805

4,026,250 1,010,000

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Street marketsDesigner’s crafts, hand-madejewelry, sculpture, pottery,picture frames, embroidery andhandbags, Beirut Association forSocial Development, Saifi VillageLebanese artisans, Uruguay andArgentine streetsFlower market and Souk el Tayeb,Martyrs’ Square.

A great number of events wereorganized by Mrs. Bahia Hariri,Mrs. Nora Junblat and Soliderefrom April 8-13, culminating inNational Unity Day on April 13.

The streets reverberated withactivity as people streamed intotown with a renewed feeling ofenjoyment as life returned toBeirut city center.

ExhibitionsPhotographs by Ayman Trawi, Maarad streetOnce upon a spring, 130 impressive photographs from An-Naharnewspaper, Martyrs’ SquareIn memory of what we have lost, photographs by Rosy Abdallah,Saifi SquarePhotographs by Roger Moukarzel and Sandra Dagher,Saifi VillageCautions Calm, installation by Hussein Sawli, Saifi VillageMaria Hibri fabric design and furniture, Makhallissiyeh streetCartoons on a banner, Said Akl streetInvention Day, Roman Baths.

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a revived CITY CENTER

SportsUnited we run, a 5 km run held by Beirut MarathonAssociation, started in Riad El Solh Square and endedin Martyrs’ SquareHorse riding, Pony ClubMini football and streetball tournaments, Hoops andSaifi marketplaceWaiter’s race, from Monroe Hotel to Nejmeh SquareBeirut Paper Rally 2005, where teams competed onbicycles, starting and ending at Beirut by Bike.

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Outdoor activitiesIn Martyrs’ SquareKite take-offChildren’s playRelease of red, white and greenballoonsHuman Lebanese flagInstallation: jigsaw puzzle mapof Lebanon, organized byAjyalouna Association

ElsewhereCircus and Dora shows,AbdelMalek StreetBackgammon tournament,AlSa’a restaurant, Nejmeh SquareLebanese Autism Societyorganized activities, June 18-19.

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a revived CITY CENTER

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ConcertsKulluna lil watan, 20 Lebanese pop stars, Martyrs’ SquareAyad Khalife, piano, and Sary Khalife, cello, Joumana Medawar sacredmusic, National Evangelical churchPianist Guy Manoukian, Jahida Wehbe and chorus, ending with poetry,Martyrs’ SquareCircle of Lebanese poets, Roman BathsSacred music recital by Ghada Ghanem,Armenian Catholic churchNational Symphony Orchestra concert, St George Maronite churchSound and light concert by Jamal Abou El Hosn, Roman BathsMonday blues band concert, Roman BathsConcert by Magida el Roumi, Martyrs’ Square.

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Walking in Mr Hariri’s footstepsAs they walked in Mr. Hariri’sfootsteps, young and old enjoyedMaarad street shops andrestaurants, under the late primeminister’s benevolent gaze.

Planet DiscoveryPaint for peace, with Kiki BokassaCiel et Vent kite workshop with Sami SayeghTheater by Notre Dame theater clubChildren’s choir of BeirutLi-naqraa ma’an, children’s story-telling byFadia Tannir from her book Rainbow Zawiyat el Rawi, reading by Nancy Ajram andHaifa WehbeKarakeeb, puppet showL’élixir du respect, puppet showBint al Sultan and the three sisters, musical playby Maurice MoussalliLebanese American University children’s choir.

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El Bourj bookstore book signingLa Guerre du Liban, j’avais 11 ans, by Kinda Elias,April 14Stories for children,April 23Liban: Le Chaos, Hariri Assassiné, by Bassam Tayara, May 4Let me tell you a story, poems and stories by NoraJunblat, Kiki Bokassa, Norma Naoum, Zeina Daccache,Hassan Lavassany, May 15Dans le Jardin de Sarah, by May Menassa, May 22Mon livre de coloriage sur les Phéniciens by Nevine Mattar,June 18Aasr al Ilm, by Nobel prize winner Ahmad Zweil, June 24When shadows fall, by Heba Dabliz, June 30.

Robert Mouawad private museumThis mansion, open to the public, has historicDamascene woodwork, antique jewelry, Islamicand Oriental art, Roman antiquities.

Other galleriesAida Cherfane art gallery: L’art à sa manière,paintings and sculptures by Pucci Puccio, June 1-17ON/OFF gallery: Luffa, lighting by Wissem andCecile Nochi, June 21 - August 21.

CULTURAL life

Instituto CervantesLecturesL’Art de parler: La voie vers la paix, El arte de hablar comomedio para la paz, Isidro Juan Palacios,April 14Meeting with writer Lucia Extebarria, June 23In memory of Augosto Roa Bastos 1917-2005 by Paraguayambassador Alejandro Hamed Franco, June 29ExhibitionEl Quijote Universal, pictures and first edition of DonQuijote,April 7-29Readings from the first part of Don Quijote,April 19-23.

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Quartier des Arts galleriesPièce Unique: paintings and sculptures by Nisa Chevènement,April 7-30;Alain Le Yaouanc sculptures and paintings, May 10 -June 10; Laila Muraywid fashion and jewelry show, June 21-23Alwane: Graffitis, by Hoda Baalbaki,April 26 - May 10; paintings,antiques, objets d’art, Lebanese paintings, MayV & A: Murielle Rohban paintings,April - May 2Rochane: Peau d’âme, Rania Farsoun, May 19-31; Villes Japonaises,photographs by Ariane Atechian Delacampagne, June 9-18Epreuve d’Artiste: Moments Volés, photographs by Riad Traboulsi,June 25; sculptures by Nicole Bouldoukian, June 28 - July 16 1064 D2: Rania Farsoun summer fashion collection, June 14-17 Purrl: Mediterranea, jewelry by Lidia Galeano Germain, June 22.

Other eventsCiné Mix, silent movies of the 1920swith music, Roman Baths, June 3-4TV5 contest exhibition and prize giving,Al Bourj bookstore, June 18Horeca hospitality exhibition, BIEL,June 21-2413 ESCWA conferences, UN House.

The traditional Fête de la Musique,postponed this year from June 21,was celebrated on June 25. Manyevents, organized in various citycenter venues, were well attended,with music filling the streets lateinto the night.

St-Elie Armenian churchAdib Moufti and Nadim ChartouniNassim Al-SharkZiad Ahmadieh.

FETE de la MUSIQUE

Argentine streetKhat2a7Mar, rapSouth units, rapMute, rockArcane, rockKords, rockMilitia, Hip hopLinger, rockRamez, rap.

Roman BathsSada group, oriental musicJamal band, latin fusionJoelle and friends, pop rockRayess bek, rapDj Osane, oriental electric.

Martyrs’ SquareReal deal blues bandEl Warka, traditional oriental Nescafé blues bandPaolo K, variety Blue Mamba, bluesLatin 7 Spirits.

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At the Arab Economic Forum: Lebanese and Turkish prime ministers Mikati andArdogan viewing the city center model; Mr. Chammaa delivering his address.

General manager Mounir Douaidy with the BNPI delegation.

Solidere at the Arab Economic ForumThis year’s Arab Economic Forum, held by Al Iktissad Wal Aamal atPhoenicia Hotel on June 16-17, was titled Rafic Hariri Forum.Addressing the conference, chairman Nasser Chammaa paidtribute to the late prime minister's unrelenting efforts to promoteinvestment opportunities and his utmost commitment, care andsupport to work ethics, production, knowledge, progress, evolutionand development.

Mr. Chammaa described Solidere's achievements, stressing itssustained success and determination that have elicited positiveresponses from various investors' milieus, which were translated inexpanded land sales and project launchings. Solidere has reinfusedlife and soul to the heart of the capital, making it a meeting placefor all Lebanese and a symbol of the country’s unity.

He presented an overview of the projects to be finalized in thecoming two years and of the Company's financial situation, drawingattention to investment opportunities in Beirut city center, andconcluding that Beirut today radiates hope for a bright future andis determined to maintain a leading role as a beacon within itsArab environment.“Welcome to Beirut city center, he said.Thisarea, thanks to its beauty and style, has become an astoundingdestination of interchange and joy.”

Conference Board Middle EastThe 2005 meeting of the Conference Board Middle East BusinessLeaders Council, held on May 25 at the American University ofBeirut, had as its theme, Competitive challenges in the Arab Worldtoday: the role of business and education.

Addressing the conference on Beirut’s reconstruction and thecountry’s future, Solidere general manager Mounir Douaidy gave apresentation on the city center reconstruction and development,describing it as one of the most ambitious contemporary urbandevelopments.

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In and about the CITY CENTER

The Lebanese Company for the Development and Reconstruction of Beirut Central District, s.a.l.

P. O. Box 119493Beirut 2012 7305, Lebanon

Tel. 01 980650 / 980660Fax. 01 980661 / 980662

e-mail: solidere@solidere.com.lbhttp://www.solidere.com

VisitorsBusiness visitorsSenior vice-president UmbertoAlonzo and vice-president SaadOsseiran, BSI AG Middle Eastgroup, London; David Peters,senior partner Heidrich andStruggles consultants, London;Mohamad Shahrin Merican andJohn Lau, director and projectdirector UT Projects, Malaysia;Lord Tugendhat, chairmanLehman Bros UK, and RobertWilmers, chairman M & T BankNew York, with AlexandraAsseily; Carl Bruce, countrymanager for the Levant, UKTrade and Investment; PeterVoll and Lisa Hopps, seniorvice-president and operationsmanager, High Country Passagecruises, US;William Devers andKimberly Bues Grassia, CEOcompany, US; Mark Simon ofLAI'S Trust Hong Kong; PatrickProtais, Carrier vice-presidenttranscontinental operations forEurope, Middle East and Africa;Steve Calhoun, director Tractlandscape architects and urbanplanners,Australia; J-C Cattin,SAGEM communications,Moscow; two French investors;Japanese embassy counsellorand second secretary KeisukeYamanaka and YoshikazuHasunuma;Albert Massaad,president, and Homer Saleh,consulting engineer,AlbertMassaad Co. Lebanon.

DelegationsBNPI head international retailbanking, emerging markets andoverseas Jean-Jacques Santini,with Michel Chevalier head ofEurope and Near East; HenriTyan, board member BNPIFrance, president Lebanon andNear East committee and BNPParibas director Lebanon; andClaude Ruffin general managerLebanon group; 20 Germanprivate collectors and museumexecutives; José Vandvoorde,Brussels Urbanism Federationpresident, with 15 members;10 Air France Paris executives;Tarek Bey-Naji from Poland forTrading, with 16 businessmen;11 representatives of Sauditravel agencies; 13 Iraqigovernment officials; six Yemenipublic works and civil aviationministry officials.

Academics, professionals, media Greek architects V.Agorastidou,A. Noukakis, L. Ionnidou and B. Babaou-Noukaki; the artistMarwan Kassab-Bachi; 25 ACSboard members; journalistsfrom Denmark and Germany;AUB’s Hani Asfour with 15architecture students, MounirMabsout with 30 engineeringstudents; NDU’s Robert Salibawith 12 architecture students.