BEIRUT, May 2 - Profits at Lebanon's largest company Solidere for this year should remain near 2007 levels of $22 million, although political instability remains a threat, the company's general manager said on Friday.The profits are likely to match last year's levels. The political situation remains tense but no ongoing project in central Beirut has been cancelled," Mounir Doueidi told the Arab Economic Forum, a business gathering, in the Lebanese capital.

The real estate company , which owns most of the property in downtown Beirut, reflects the state of the Lebanese economy, which is officially forecast to grow at 4 percent this year, similar to 2007.Doueidi said the Souks shopping mall, a high-profile 100,000 sq metre project in the city centre being built by Solidere, will be completed in 2009. Solidere's assets are worth some $8 billion, with 50 projects being developed by private investors who had bought land from Solidere, he added.

"This is a conservative valuation which will rise if the political situation improves," said Doueidi, referring to a protracted power struggle between the pro-American government and the Hezbollah-led opposition. Iran and Syria back the Shi'ite movement. Former premier Rafik al-Hariri founded Solidere in 1994 to rebuild downtown Beirut after the 1975-1990 civil war and gave it a monopoly over most of the 1.8 sq km (20 million square feet) that form the centre.

OUTSIDE EXPANSION

Doueidi said Solidere had sold 2 million sq metres of built-up area since its foundation, comprising half of the BUA it controls. He said Solidere will step up expansion abroad through Solidere International, of which it owns 37 percent.

Solidere International on Thursday announced a joint venture with one of the seven regions comprising the UAE to develop a 12 sq km project. Doueidi said the infrastructure costs will be covered from pre-sales and Solidere will not need to seek huge financing for the $60 billion project.

"This is a project over 15 years and plots will be sold to private investors to develop themselves. I do not see a huge bond issue," Doueidi said.

The company is also planning a project on the edges of Cairo and will bid for a project in Monaco, Doueidi said.

A market source said the overseas expansion could help Solidere eventually offset diminishing sales in its home market and raise its weak profits-to-assets ratio.

"They have not sold much at all in Lebanon this year," the source said. "This could be to their advantage if there is a political turnaround and prices in central Beirut spike."