Business | Investment
Channel Sponsor
Zabeel keen to invest in US, but not now
Mohammad Ali Al Hashimi, executive chairman of Zabeel Investments, is one of the new-generation entrepreneurs who hold key positions in Dubai's corporate world.
- By Shakir Husain, Staff Reporter
- Published: 23:56 October 30, 2008
Dubai: Mohammad Ali Al Hashimi, executive chairman of Zabeel Investments, is one of the new-generation entrepreneurs who hold key positions in Dubai's corporate world.
Al Hashimi has developed several prestigious projects since the Dubai-based diversified investment company was launched in 2006. The company focuses on real estate developments through its division Zabeel Properties, while Zabeel Capital handles private equity and asset management across a range of sectors. It has interests in media, hospitality, finance and education.
Al Hashimi, aged 36, earlier served as chief executive officer of Amlak Finance and oversaw the company's conversion into a publicly listed company.
In an exclusive interview, he tells Gulf News that Zabeel is keen to invest in the US, but not willing to "overpay" for deals. He expects real estate prices there to fall further even though some US institutions are "trying to convince themselves that they are not going through a problem."
Gulf News: What is your interest in the US market in today's conditions?
Mohammad Ali Al Hashimi: Our interest in the US remains. Have we identified any specific asset? No. We are in no rush. I believe the market in the US will drop more. There will be opportunities for people like us later on. So we are adopting a sit-and-wait position. Our resolve is clear: we are keen on the US real estate market. It is a bad timing now, when the time is right we will be there. A lot of institutions in the US are trying to convince themselves that they are not going through a problem. People need to have a reality check in the US. I am talking about the people in the institutions, hospitality industry, real estate market, owners [of businesses]. You are not going to have people who will overpay for assets. At the same time, we are not expecting to underpay, but we want to get value [for money]. At the moment, the mentality [in the US] is of denial. People should look around and face the facts.
When do you think you will be in the US?
I do not know. We are going through a global crisis today. When will this end, when will things start to pick up? Who knows? We are all geared up, but we have taken a decision to wait. We have our funds lined up. We will go there when it is right for us, not when it is right for someone else.
How much money are you willing to invest?
If there is an opportunity for us to acquire individual assets, we may do that. If there is an opportunity to acquire multiple assets, we may do that. We are flexible and ready for any of those options, provided it is the right deal at the right time. We have significant amount do deploy. We are talking about hefty sums, but I cannot give a figure.
Do you see opportunities for buying stocks? What sectors would be of interest to you?
All our [stock market] investments, whether in EADS or Sony, are long-term. We take stock of our investments on a regular basis. We take decisions on a long-term basis. Are there opportunities [in the stock market]? Probably there are. Is there room for it [the market] to go down? I think there is. We have not reached a stage where I would say 'let us go and buy,' be it in real estate, hospitality, or other investments.
Are you waiting for deflation to happen?
I am not waiting for everything to hit rock bottom, but I just feel there is some more room [for prices] to come down. The US market is the most resilient and largest market in the world. The talk of market crumbling is nonsense.
What is your outlook for the UAE?
Of course Dubai and the UAE are not immune to a global crisis. When it hits the largest economies in the world, the US, Germany, the UK, France, Russia, you think it is not going to hit Dubai, the UAE? There will be a bit of caution in the short-term, but our fundamentals are very strong.
Look at the real estate projects that are being launched, these are in billions (of dollars). If we felt as developers and investors that this was not the way to do it, we would not be launching these projects.
We are here for the long-term. Speculators and people who are just looking to take advantage of the market, people who are not loyal to the market and just want to make a quick buck and go somewhere else as soon as an opportunity is there, let them go. We need to control that through regulation and other elements.
You talk about caution in the short-term, but right now we do not see that. Just look at projects like Meraas. It is a Dh350-billion development.
Meraas is not a short-term development. It will be built over 10 years. Nakheel's tallest tower is also a long-term development. The fundamentals of our economy are extremely solid. That is why we are building for the long-term. The panic being created by people, the media, the [talk of] doom and gloom, will have short-term effect. In comparison with other major economies around the world what is happening here at the moment is a fraction of that. But Dubai today is a city that is linked with investments and everything else with other parts of the world.
Dubai is doing well and so are other developing markets, and there is this talk of money moving from the West to the East. What would be the places where you would like to put your money in the developing world?
The Dubai market remains the safest and most lucrative in the world. I am biased in one way, but I put my money where my mouth is. Majority of our investments are here, and going forward, will continue to be in Dubai. We are one of the fastest growing cities in the world. Outside Dubai, the hospitality market in the US is strong. We are potentially looking at something in European markets.
What new projects are you launching?
We are looking at a multi-use, residential, hospitality and entertainment project. It is something very unique for Dubai. We are still finalising some details. It is a large project worth Dh5.5 billion in the region .
Since the Dubai boom started, the focus has been on high-end luxury projects. Do you think this is right because there is also demand for mid and low-scale residences?
When we launched our company, we were very specific in what we wanted to do. Our idea was very target-oriented; we wanted to focus purely on the areas that are high-end. You cannot be everything to everyone. We are at the very top level. We would not do anything else. Obviously there are opportunities across the board. Each company has its own vision.
What is the size of your portfolio?
Our portfolio is worth $5 billion, with the new project that is coming we will add another $1.5 billion. We are looking at our portfolio going from $5 billion to around $8 billion within a year.
Are you feeling any impact of the credit market crisis in getting funding?
We have no problem. We do not go into any project without having our lines of credit in place and knowing where our funding is coming from. We are more than comfortable between debt and equity in all our projects. The Tiara project will be completed in 2009, the Ottoman Palace Hotel in the second quarter of 2009, Dubawi Island in October 2010, and Porto towards the summer of 2010. We are moving ahead with all our projects. They are all under construction.
You earlier served as Amlak's CEO. Any views on the proposed Amlak-Tamweel merger? What impact would it have on the mortgage market?
It is a fantastic move. Hats off to the chairmen of Amlak and Tamweel. I know the industry very well. People will automatically assume that this merger is because of the problems [in the financial markets], but do not forget that when you put the two companies together, you get this Dh27 billion balance sheet. The opportunity to raise debt, issue sukuk or to do other fund raising is much stronger. Both of them had applied for banking licences, nothing has happened. When you put them together with an extremely strong balance sheet, they are in a much stronger position to go for that.
For the shareholders, earlier you had two of them competing for market share, now they will control the market. So shareholders can get a better deal. The mortgage business is long-term. The nature of lending is long-term and the nature of return is long-term. I think it is a very positive move for the market. You get a company that will control 80 per cent of the market. It is going to be tough for the competition, but great for the shareholders and investors.
Share this article
Popular in Business
-
Budget travel
Airlines in the region
Take a pictorial look at some of the budget airlines in GCC
Business Editor's choice
-
Global Village
Revamped layout featuring four cultures to greet visitors this season
-
Hummer H3 V8 monster madness
We put the new Hummer H3 V8 through its paces at an off-road proving ground
-
Credit swaps... a fair trade
Would you swap an unbuilt unit at the Lagoons for an apartment at JBR?
