Abu Dhabi Financial Group Northacre
One of the recent prestige projects completed by Shuaa's real estate arm Northacre in London. The plan is to have another launch soon. Image Credit: Supplied

Dubai: Real estate played its part as the Dubai investment firm Shuaa put together a Dh14.7 million net profit for Q1-23, a smart 60 per cent increase from last year. Having an ongoing luxury project on the Palm will help with the numbers down the line – but there’s more coming.

Shuaa Capital through its Northacre real estate arm should launch a new project in London ‘within the next 12 months’, according to the CEO Fawad Tariq Khan. And Shuaa will keep an eye out for more property prospects in Dubai.

Khan is not one fretting about whether the ongoing boom in the Dubai property market might turn some time in the near future. “I’ve been here 12 years, and the talk about Dubai property market taking a turn has been a constant discussion at dinner tables or elsewhere,” he said. “But it’s a fact that the city is attracting new residents every day, people enjoy living here and they do not mind the indirect taxes.

“We will keep looking at real estate investments but by being selective. If we launch something, it has to be something unique.”

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Take on tech - with more caution 

On tech investments, Shuaa will take on a bit of wait-and-watch mindset. It had success in the recent past with the stake in the Arabic music streaming platform Anghami (which then went for a Nasdaq listing through a SPAC deal).

"Two years ago, tech was ruling when interest rates were zero bound - tech didn't really have much competition for investment," said Khan. "Today, there is a situation when a fixed deposit returns 5-6 per cent, and bonds are yielding higher returns."

"If you recall, at one stage, we were even looking at doing a venture debt platform. We've become way more selective than that because it's not tech just for the sake of it. We have to look at it as a real business having real cash flows, etc. And then look at whether that makes sense or not from an investment perspective.

We're becoming a lot more selective about the types of businesses we back. The fact Careem was able to attract investment from e& is proof and you know that people are going to continue backing strong businesses.

- Fawad Tariq Khan of Shuaa Capital

Debt load will be trimmed, again

For the rest of the year, Shuaa will continue to deleverage its balance-sheet, with a further Dh400 million identified. (Total revenues during Q1-23 were Dh60 million driven by 'recurring revenue generation across all segments'.)

Given how the global economy has seemed shaky at various points in the recent past, will Shuaa shift its investment focus heavily into the region?

"We are very much region focused - even historically," the CEO said. "Historically, we've done real estate out in the UK, but we've generally been a regional player. I think we're even more focused on the UAE and Saudi Arabia.

"That's partly to do with the fact this region relative to the global macro-environment is doing well. But also it's our backyard. We understand it - and for me that's where we're getting our edge.

"We got investors like Franklin Templeton and other international asset managers now investing with us, in our products. If I go to Europe to do an investment, many of those internationals are already there.

"When we think about Shuaa, we are the quintessential regional investment bank. We have to dominate this market. There's plenty of opportunities over here for us to do so."

Any interest in cryptos and NFT investments?
"Investors do ask us about it, but we admit that we don't know much about it. We're not gonna pretend to give advice. A lot of what people know about crypto is from what they've read as opposed to building up that deep understanding.
"When somebody asks me about real estate, we have people who are actually working in the industry. We know who the buyers are and so on. When we're looking at our asset management business, we understand the space.
"I have to put my hands up and say I don't understand crypto and I don't think our team understands crypto that well.
"Shuaa is regulated by SCA, who have not come out with any formal regulations around crypto. They're talking about digital assets, etcetera. We take part in these forums, but until the mainstream regulators don't regulate crypto, we are not going to be offering this to our clients at the moment..."

- Fawad Tariq Khan of Shuaa