Marjan CEO hopes to attract FDI to ‘untapped’ local sectors in RAK

Marjan’s development of freehold properties in Ras Al Khaimah will attract “significant” levels of foreign direct investment to the emirate, according to Marjan CEO Abdulla Al Abdooli.

Earlier this week, Marjan announced the launch of its operations as the master-developer of RAK’s freehold property, as an independent entity tasked with leading freehold projects in the emirate.

Speaking to Arabian Business on the sidelines of Cityscape in Dubai, Al Abdooli said Marjan hopes to attract and expand what he terms the “successful model” of Al Marjan Island, which has attracted residential and hospitality brands including Rixos, Hilton and Accor.

“Ras Al Khaimah is moving towards a new business model,” he said. “We will attract foreign direct investment, but now not only just for tourism, but also for mixed-use developments, for affordable housing, for staff accommodations and for any type of urban development across Ras Al Khaimah.”

Additionally, Al Abdooli said he hopes to attract investment in what he terms as “fields that are untapped with regards to FDI” in RAK, particularly offices and retail.

Regarding RAK’s hospitality market, Al Abdooli said that more than 50 percent of the 15,000 additional hotel keys the government believes are necessary by 2025 will be located on Al Marjan, of which over 1,600 are and 4,000 in the pipeline in various stages.

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Gulf allies set to sign $10bn aid deal for Bahrain

Gulf Arab allies will pledge $10 billion in aid to Bahrain and finalise $2.5 billion in assistance for Jordan on Thursday, in an effort to stabilise their fragile finances through years of planned economic reforms.

The assistance to Bahrain will be spread over five years and will include loans, deposits and grants, a Gulf official said, declining to be named as the information isn’t public. For Jordan, where protests against planned tax hikes brought down the government earlier this year, the aid will include a $1 billion deposit in the central bank.

Support for Bahrain should help avert a currency devaluation that investors fear could force other countries in the oil-exporting region to follow suit. It should also allow the tiny Gulf kingdom, a close Saudi and US ally, to borrow from international debt markets at cheaper interest rates.

The yield on Bahraini Eurobonds due in 2028 pared gains after the news. The yield has plummeted about 3 percentage points since reaching a peak at the end of June.

Investors who bought Bahrain’s battered bonds on the expectation that the island kingdom’s wealthy neighbors would come to its rescue, welcomed the package. Among them is Franklin Templeton Investments.

“The headline number is very encouraging, and alleviates the risk of any short-term dislocation,” said Mohieddine Kronfol, its chief investment officer for global sukuk and Middle East and North Africa fixed income, noting additional information was needed to address sustainability concerns. “Some good news we could all use today.”

Bahrain’s economy, the smallest among the six members of the oil-rich Gulf Cooperation Council, had been hit hard by lower crude prices since 2014. Thursday’s deal follows months of negotiations over Bahrain’s planned fiscal overhaul, which is expected to involve spending cuts and measures to increase non-oil revenue, including the introduction of value-added tax.

The country has been relying on bond markets to finance its budget and current-account deficits and replenish its foreign-currency reserves. Authorities scrapped a bond sale in March after investors sought higher yields, but raised $1 billion from Islamic securities.

Asked about the Bahrain aid plan, Kuwait’s Finance Ministry said it doesn’t comment on stories based on unnamed sources. Officials in Saudi Arabia, Bahrain and the United Arab Emirates didn’t immediately respond to requests for comment.

Gulf finance ministers will head to Bahrain from Amman, where they announced a separate aid package for Jordan. Saudi Arabia, Kuwait and the UAE will deposit $1 billion in Jordan’s central bank, and offer the kingdom a $600 million loan guarantee and $150 million in budget aid annually for five years, according to a Saudi Finance Ministry statement.

The aid is part of a $2.5 billion package pledged to Jordan in June after a proposed income-tax increase sparked some of the largest protests since the Arab Spring uprisings of 2011.

The funds will give Jordan’s government breathing room to implement fiscal reforms aimed at reducing the budget deficit and stabilizing an economy strained by the influx of 1.5 million refugees.

Tax increases were among reforms agreed with the International Monetary Fund in 2016 under a $723 million loan program. Jordan, an oil-importer that has for decades relied on foreign aid from the US and oil-producing Gulf nations, is struggling to reduce subsidies and cut spending while protecting its poor.

The three Gulf countries will also provide $50 million each for the construction of schools in Jordan, according to the Saudi statement.

Jordan, whose public debt nearly equals economic output, has been hurt by the rise in global commodity prices. Unemployment is at a two-decade high. The US this year committed to give Jordan more than $6 billion in aid over the next five years, up from $1 billion annually.

The current premier, Omar Al Razzaz, withdrew the offending tax proposal after taking office. A revised tax plan was approved by his government last month but has yet to be passed by parliament. It increases taxes on banks, telecommunications and other sectors.

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Dubai expands tourism ambitions, sets new target for 2025

Dubai has extended its tourism ambitions, announcing new targets for attracting visitors to the emirate up to 2025.

Building on the efforts to attract 20 million tourists annually by 2020, the year of Dubai Expo, Dubai Executive Council has now revealed new targets.

The Council’s members witnessed a presentation by the Department of Tourism on its directives and commercial marketing strategy, which aims to increase the contribution of the tourism sector to the emirate’s economy.

Its new goals include attracting 21-23 million visitors by 2022, and 23-25 million visitors by 2025.

The Council, chaired by Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai, heard that the emirate will achieve its goal to be the most-visited city in the world, through adopting ambitious development plans, initiatives and projects that will make it a preferred tourism destination for millions of people around the world.

“These plans and strategies to strengthen the tourism sector reflects our efforts to promote Dubai’s stature in international tourism forums and make it a favoured destinations for tourism, business and events, through ambitious initiatives that aim to achieve sustainable growth and guarantee our international competitiveness, which will enable Dubai to deal with the changes witnessed by economic sectors and international markets,” Sheikh Hamdan said in comments published by state news agency WAM.

The Department of Tourism’s strategy is based on the theme of “Only in Dubai” plus promoting the city’s attractiveness as a leading business destination.

Dubai welcomed a record 8.10 million international overnight tourists during the first six months of 2018, according to figures released in August.

Dubai’s Department of Tourism and Commerce Marketing (Dubai Tourism) said the emirate’s tourism sector was now worth AED109 billion ($29.6 billion) a year as at the end of 2017.

Top source markets continued to witness stable year-on-year performances in the first half of 2018, with India, Saudi Arabia and the UK retaining their top three positions when compared to the same period last year.

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Inside Mastercard’s ‘priceless’ future with Raghu Malhotra

If you are unfamiliar with Mastercard, you may be forgiven for believing it to be a ‘legacy’ business, rooted in traditions. After all, the company’s history stretches back more than 50 years to 1966, when it was founded in the US as Interbank Card Association, before becoming Mastercard in 1979.

But that’s actually far from the case. These days it has moved beyond credit cards and payment systems: it’s a technology company striving to bring more efficiency and transparency into the world.

At the helm of those efforts in this region is Raghu Malhotra, president for the Middle East and Africa. Speaking to Arabian Business on the sidelines of Mastercard’s star-studded ‘Connecting Tomorrow’ event in Barcelona (featuring the likes of Pelé, Apple co-founder Steve Wozniak and Skype founder Jonas Kjellberg), Malhotra says the company has undergone a “huge transformation” over the last 10 years.

“Remember, we were an association, owned by banks, that built the infrastructure for them to be able to create a payments business. This was when credit cards first came out, and the brand became synonymous with credit cards,” he says, adding that: “It’s a natural tendency to say ‘Mastercard’ and associate it with credit cards and everything around that. And that was true, but many decades back.”

It’s moving forward to a new reality in which people associate us with technology and platforms rather than just the payments

As Malhotra tells it, Mastercard was way ahead of its peers. Bringing a technology platform – plastic payment cards – into the mainstream allowed customers to make transactions in seconds, which was revolutionary for its time.

Mastercard’s new reality

The ubiquity of technology, such as mobile devices, means the company has had to adjust to reflect a well-connected, digitised and convenience-focused customer base which demands as seamless an experience as possible.

“Now, I don’t need you, the customer, to go to the place which has technology. We call this the difference between push versus pull. Earlier you pulled the transaction, now consumers can push the transaction,” he says.

“As you see more available platforms, you’ll see a new realisation coming through about what we do. It’s a question of us moving forward to a new reality in which people associate us with technology and platforms rather than just the payments.”

At the event in Barcelona, under the theme ‘Creating the Road Map for the Future’, Mastercard showed a number of use-cases for its new technologies, which ranged from lending platforms that digitise supply chain management to new ways of using biometrics to ensure the security of online and in-store purchases.

Also on display: technology that uses augmented reality to “place” a non-physically existent item next to a real one in a store, through one’s mobile device.

For those of us who aren’t particularly tech-savvy, such uses of technology may seem far-fetched, or far-off. But Mastercard has already begun implementing a mind-boggling array of tech to “enable” people. As an example, Malhotra points to the company’s work in parts of Africa and India, where Mastercard has implemented an “agri-app” that creates a digital marketplace for those involved in agriculture. This brings together small farmers, agents, buyers and financial service providers to do business with one another with complete transparency.

“Governments are starting to say that they have to make sure more and more people are financially included.  Think of how people are able to transact in this way. And also consider that large swathes of many economies depend on the development of SMEs (small and medium-sized enterprises),” he remarks. “In the past, you’d give subsidies to help that process, but going forward, there is a clear realisation that you can only help that sector and take the economy to the next level if you drive a more efficient transaction time. If you digitise the supply chain it lowers the cost.”

You only help SMEs and the economy if you drive a more efficient transaction time

Even more importantly, Malhotra says, is increasing the transparency of economic “flow”, where people can see everything that is happening, digitally and in real-time. “You start to be able to make better decisions on things like working capital requirements and micro-credits. So it allows many more players to be in that whole value change,” he says. “That’s the big shift.”

The Expo experience

Among the partners that have turned to Mastercard recently is Expo 2020 Dubai, which has named the company as the “official payments technology” partner of the upcoming event. That means Mastercard will be deploying technologies including augmented and virtual reality, face and fingerprint recognition and wearable and contactless payment solutions, and even voice shopping to create a “seamless” visitor experience.

The end result, according to Girish Nanda, Mastercard’s general manager for the UAE and Oman, is a cashless experience which is simple and safe, allowing the visitor to focus on and enjoy the offerings of Expo.

“Our own research shows that users are looking for new ways to pay. They’re optimistic about digital options. They want the flexibility to pay with any device,” he adds. “But equally important is the safety and security of personal information.

The Expo announcement, Malhotra beams, is a reflection of the importance Mastercard places on the Middle East and on the GCC, where a number of governments have announced plans that dovetail with the capabilities Mastercard brings to the table. “We have very solid Middle East business. Dubai is one of our five global hubs, our regional headquarters for 69 countries. I don’t need more proof than that,” he says proudly.

Malhotra says the second part of what Mastercard does in each of the region’s economies is to pay attention to any progressive government visions or positive policy-making changes to see what infrastructure it can adapt in these countries that might help the process.

“The economics are different in each country, so we just change the value chain a little bit in how we operate in the markets, but the principles remain the same.”

Blockchain – a solution without a problem?

When asked about blockchain – a technology for which Mastercard has filed a large number of patents with the US Patent and Trademark Office – Malhotra, a financial services veteran who previously held senior roles at Citicorp, American Express and ANZ Grindlays Bank, is quick to distinguish the underlying technology from cryptocurrencies, about which he says Mastercard “is not a great believer.”

I don’t think people understand how blockchain is broken down and where it can be efficient

“They’re speculative. If that’s how you want to use that technology, you might as well gamble or do some commodities trading. It doesn’t solve real-world problems like that,” he says, sounding vaguely perplexed at the public fascination with the digital currencies. “Blockchain is a solution looking for a problem. It’s not the other way around. I don’t think people really understand how blockchain is broken down and where it can be efficient. ”

While he is dismissive of cryptocurrencies, saying they would only work if they were transparent and regulated, which they aren’t, that isn’t to say that he doesn’t believe in the underlying technology. “We do believe it could have applicability in cross-border payments because it drives efficiency, openness and transparency,” he says. “It also could be useful in providing proof of provenance, like a car manufacturer who uses blockchain to make sure he has an authentic part. Our focus is on these kinds of cases.”

From AI to KYC

Malhotra is far more optimistic when talking about artificial intelligence (AI), which Mastercard is already using for a number of tasks, including automated fraud detection and KYC (Know Your Customer) applications. As an example, he points to Brighterion, a California-based AI company that Mastercard acquired in 2017.

“It uses AI to help to do AML [anti-money laundering] better and drive efficiency…we like to use AI in that sort of environment. And we’ve been very clear – we never store customer data and we are super clear on how our privacy works. Because we’re a B2B2C model, it makes us very defined on how we operate and what we use AI for,” he says. “We’ll keep using data at an aggregated level, so even if you apply more AI features, it’s done with that principle in mind. Nobody will ever know what an individual does or who they are – people become data sets of a thousand, and a certain segment operates in a certain way. It’s a different way of applying it.”

A bright future

Speaking to Malhotra, it quickly becomes clear that he is what one might call a ‘futurist’. Even in casual conversation, he broaches subjects as diverse as the social and geopolitical implications of improving medical technology to whether one day the DNA from fireflies might be introduced into bark to make glow-in-the-dark trees.

When it comes to Mastercard, Malhotra is weary of saying anything too forward looking – keenly aware that the future can change quickly – though he’s clearly optimistic about the direction the company is taking, especially in the Middle East and Africa region he oversees.

“What we do see, on a broader scale, is this whole secular shift moving away from cash to much more efficient electronic forms. And I certainly see us playing a very large part in that transition. I also see us playing a huge role in ensuring that the right safety and security layers are in place when you create this digital infrastructure,” he says. “We’ll also play an increasing role partnering with governments and creating infrastructure that allows for efficiencies, whether it’s for the SME side, supply chain digitisation or financial inclusion… I see us playing a much bigger role in the Middle East and Africa.”

Mastercard and Expo

The recently announced partnership between Mastercard and Expo 2020 Dubai will see the company deploy its latest payment technology, including augmented and virtual reality, biometrics, facial and fingerprint recognition as well as contactless and wearable technologies.

“World expos have always offered people their first experience of technologies that will go on to change their everyday lives,” says Reem Al Hashimy, the UAE Minister of State for International Cooperation and Director General of the Dubai Expo 2020 Bureau. “In the future, people will grow to expect seamless experiences whenever they make a payment. Our partnership with Mastercard will not only make cashless payments easier for our visitors, but also allow them to try new and exciting innovations that enhance and become part of their Expo experience.”

Mastercard in Saudi Arabia

Earlier this year Mastercard announced a partnership with mada, the kingdom’s domestic payment network, to enable online payments using Mastercard technology.

The partnership with mada allows more than 28 million mada cardholders to transact online, and in August was expanded to allow contactless payments at hundreds of thousands of NFC-enabled terminals on the kingdom.

Utilising Mastercard to facilitate online payments via the network will enable Saudi businesses to increase their e-commerce sales, said Ziad Al Yousef,  director at Saudi monetary agency.

Mastercard and bockchain

In a June conference in Amsterdam, Mastercard vice chairperson Ann Cairns said that the company has “built a blockchain that can run the whole” of its network, part of a larger effort to develop blockchain integration “at scale” and finding “real use cases.”

“You just don’t replace existing technology with blockchain because you may not create a better user experience,” she added, according to media reports.

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Gulf funds could reap rewards of Indian infrastructure crunch

A large number of Indian infrastructure project developers and promoters are expected to rush to international markets including the Gulf region to tie-up long-term funds to finance their upcoming projects, according to industry players and market experts.

The move comes in the wake of an expected liquidity crunch in the short-term, coupled with a possible further regulatory tightening in the Indian financial sector, following the repayment crisis in ILFS (Infrastructure Leasing Financial Services), the leading infrastructure financing institution here.

This could be a big opportunity for equity funds and lending institutions in the UAE and Middle East, analysts say.

“With the unfolding saga at ILFS, uncertainty in the stock market and the continued downward spiral in the Rupee exchange rate against the US Dollar, plans of several infrastructure groups to hit the stock market with their IPOs (Initial Public Offerings) have gone haywire. These promoter companies will now be forced to tap the overseas markets to tie-up funds for their new projects or expansion plans,” said Kameswara Rao, partner, Energy Infrastructure at PwC India, told Arabian Business in an interview.

Infrastructure projects, mainly in the renewable energy, airports and road and highway sectors are the ones which are expected to approach long-term investors from the Middle East and other overseas markets for financing of their new and expansion projects.

“There is already talk of several project developers in sectors such as renewable energy and road and highway construction sectors, scouting for overseas investors to tie-up both long-term debt as also equity,” an infrastructure sector analyst at a leading investment bank said. He sought anonymity as his firm is involved in negotiations by some of these companies.

Market players said that with the government aggressively continuing with its bidding process for several projects in the renewable energy and airport sectors, there will be a scramble among the bidding companies to ensure finances upfront for the projects if they succeed in their bids.

These are the companies which are now hurrying their plans to look for long-term investors in the overseas markets.

The Government of India last week averted a major crash in the domestic financial sector and stock market by moving swiftly to supersede the board of the debt-ridden ILFS by appointing a six-member expert committee comprising of eminent bankers and administrators.

“In the wake of the developments in ILFS, greater regulatory control is expected in the financial sector, especially in the NBFC sector, with the freedom of lending by NBFCs getting curtailed to some extent,” said Ashok Jha, former Finance Secretary, Government of India, who is currently an independent director on the boards of some of the private sector companies.

The Indian Government had to step in the wake of a string of repayment defaults by ILFS and some of its subsidiaries in the recent weeks, creating a near panic in the banking sector and markets, leading to both Sensex and Nifty, the flagship indexes of Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) plunging hundreds of points in consecutive sessions.

The total outstanding liability of ILFS and its subsidiaries are estimated to be about $23 billion.

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Dubai set to show its wild side in new TV documentary

The Government of Dubai Media Office and Discovery Channel have held a media screening of Wild Dubai, a new one-off documentary that examines the diverse array of wildlife that Dubai is home to.

The documentary, the product of a collaboration between GDMO and Discovery Channel, reveals that the global metropolis is a natural home for a range of unique animal species.

The 45-minute film will premiere in the Middle East exclusively on OSN on October 9.

Mona Al Marri, director general of the Government of Dubai Media Office, said: “We are very happy to have collaborated with Discovery Channel to make this project a reality.

“‘Wild Dubai’ explores a lesser known side of Dubai – its diverse array of wildlife. Preserving the nation’s biodiversity is a key part of the environmental vision of Vice President and Prime Minister of the UAE and Ruler of Dubai His Highness Sheikh Mohammed bin Rashid Al Maktoum. I hope this documentary will inspire more people to explore this unique aspect of the emirate.”

Discovery Channel was selected as a partner due to its substantial track-record in producing and broadcasting documentaries, a statement said.

“This documentary reflects Discovery Channel’s commitment to telling stories of people and places from all over the world that make our planet extraordinary. ‘Wild Dubai’ is a unique documentary that unravels a new side of Dubai and compels us to look at the emirate from the perspective of its natural ecosystems,” said Amanda Turnbull, vice president general manager, Discovery Middle East and Africa. 

Wild Dubai journeys through the traditions of camel racing and falconry, reflecting the impact of heritage on the commitment to protect the wider environment and its wildlife.

The documentary also uncovers an array of unexpected – often hidden – species, such as the Arabian horned viper, flamingos, scorpions and mice.

Apart from OSN, Wild Dubai will also air internationally in several markets across Europe, Africa and Asia on Discovery’s network of channels, following the Middle East premiere.

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Why the past points to the future for Issam Galadari

Ithra Dubai might only have existed as a standalone entity for 18 months but its vision is bold, judging by its website manifesto. “To be renowned as progressive visionaries who are set apart by our bold and fearless approach in the creation and enrichment of communities in Dubai, to ultimately transform the legacies of our past into landmarks of the future,” it proudly states.

These words could be mere platitudes were it not for the passion of Ithra’s founding CEO, Issam Galadari. A vastly experienced civil engineer, Galadari has launched some of the most recognisable real estate landmarks in the city. In a career spanning 30 years he has served as real estate director at Investment Corporation of Dubai (ICD), CEO of Emaar Properties, where he oversaw the development of Downtown Dubai, and managing director of Emaar International where he expanded the business into 11 countries in Asia and North Africa.

High flying roles these might be, but his conversation with Arabian Business begins in a small, windowless conference room in the offices above Ithra’s new Waterfront Market before moving to a rooftop carpark that overlooks the company’s ambitious Deira Enrichment project. Galadari is keen to share details on this ambitious plan, along with Ithra’s wider mandate to connect Dubai’s heritage with its future development.

Same but different

“Deira has always been the hub for commerce in Dubai,” says Galadari over coffee at the Waterfront Market, which opened in 2017 as a long-awaited replacement for the older markets that, while much-loved, lacked the necessary infrastructure for future growth. “But of course Dubai got much bigger and the businesses here also grew, but no one did anything to extend the area. The last big development was in 1980 when the Hyatt Regency opened. Since then we’ve only had the Fruit and Vegetable Market and the Fish Market in Al Ras, which was supposed to be a temporary building for two years. I was involved in that project when I worked at the municipality, and that was in 1987.”

The businesses in Deira grew, but no one did anything to extend the area. The last big development was in 1980 when the Hyatt Regency opened

For this reason he admits that “the project is very close to my heart”. In fact, he reveals that a plan to develop the whole area was supposed to happen all those years back but never did “…so I’m so glad to come back and finally do this.”

Personal sentiment aside, the plan is clearly important. Galadari shares the extraordinary fact that the Al Ras area, a tiny portion of Dubai’s landmass, “contributes eight or nine percent of Dubai’s GDP.”

Yet Galadari understands that this is not just about economic growth, and that expansion must add to the area’s unique charms. “Yes, it is about heritage as well as business. Tourists want to see it. And after the government cleaned the area and covered the souks, it made the area more popular. So now we need to expand both the heritage and business zones. We don’t want to create something different, we want to keep the same feeling.”

Having driven from the Waterfront Market to the multi-storey carpark roof offering views of the development site, Galadari is in his element out in the sweltering summer sun as he explains the progress of phase one of the two-part project. “I don’t care if it is winter or summer. I enjoy it out here on site,” he says at one point during the morning.

“Phase one is over 680,000 sq-ft with  approximately 176 retail units and 225 offices, in addition to 289 residences and eight hotels, six of which will be managed by Wyndham and Accor. And we have two metro stations already in place. One of them will be a proper transportation hub, with a bus station and hotel above the metro. So everything is in one place. There will be a shuttle service so you go wherever you want.”

Galadari explains how the whole neighbourhood is arranged with pedestrians and living spaces in mind. The carpark roofs will have sky gardens, play areas and restaurants. The buildings all have basement rather than podium parking, leaving the ground-level spaces free for retail and FB. There are also plazas, shaded walkways designed to catch the breeze, plenty of green spaces and low-rise waterfront apartments. There will also be water taxi stops so that people can use the Creek to travel along the length of the district. “We are giving it the facilities that are missing in Deira – simple things like bathrooms and parking – but keeping the things that people like. We like to create communities. People should be happy and be able to prosper and enjoy doing business,” he says proudly.

From the ground up

Galadari has made a huge contribution to the development of Dubai. After studying for his A-Levels, degree and post-grad in the UK, he returned home to a post at the Municipality where he helped develop the city’s major parks and roads. During a subsequent 14-year stint at Emaar he travelled the world finding inspiration for projects at home. One of his recent favourites is the Kings Cross revamp in London. “I was amazed at what they have done,” he says. “They have kept the heritage but made it modern.”

He refuses to be drawn on his favourite project over the years (“They’re all favourites, big and small”) but when pushed will say how proud he is to have managed the construction of Burj Khalifa “which was completed on schedule”.

Four years ago he left Emaar to work for Investment Corporation of Dubai, the principal investment arm of Dubai government. At first he headed up ICD’s real estate arm, steering the Deira beautification project and Waterfront Market development. When ICD decided on a major expansion of Deira towards the waterfront, the decision was taken to spin off Ithra into an entity in its own right. “These are very long term projects that require a lot of effort and hard work. We reached a position where we needed to be independent,” he says of the decision.

Ithra now formulates a strategy with ICD and gets its funds from the parent company, along with bank finance to complete the large multi-year projects. The remit is to fill in the gaps that other real estate companies overlook and to take a longer term view on Dubai’s development as a major world-class city.

Starting from the beginning

It’s obvious that Galadari is a true engineer at heart as he enthusiastically points to various construction sites on all four sides of the rooftop carpark. “We are doing the infrastructure first and it’s very important it happens like this,” he says, explaining why the biggest challenge has been working around the existing underground services. “They were done a long time ago so we didn’t have proper records. And the other challenges is working near the metro. We had to fix sensors in all the tunnels to monitor the vibrations, and you only have three hours per night to do this. So we’re using the latest solutions, but it still slows things down as you have to get it right.”

We are giving Deira the facilities that are missing – like bathrooms and parking – but keeping the things that people like

He stresses that safety is the “number one” priority in every process. “Those workers are the most important people on this project. They are precious. I never claim that I have done anything myself. We are building this together. We are a team.”

From a rooftop vantage, the scale and potential of Ithra’s project is obvious. This incredibly valuable patch of land stretches from the mouth of the Creek right up to and beyond Hyatt Regency. In the medium term this will be boosted by the RTA’s ambitious AED5bn Shindagha Corridor plans, including a bridge over the Creek, slated for completion in 2021. And in the years to follow, the tracts of land that form Deira Islands just a hop across the water will provide increased footfall to the area for decades to come.

This is clearly a long-term play. Ithra will be the asset manager as well as the developer and there are no plans to offer freehold sales. Instead, it will focus on building schools, mosques and clinics so that it can become a proper community in the heart of old – or perhaps that should be ‘new’ – Dubai.

Asked whether he is proud to be leading the project he once again stresses that he is only proud to be a member of the team. “I cannot take any credit alone. I never have done and I never will. So many people have helped make this city a safe and peaceful place with world class standards.”

He is clearly proud of the city itself though, speaking with admiration of Sheikh Rashid Bin Saeed Al Maktoum, the late father of modern Dubai, and his decision to dredge the creek in 1959, which allowed deeper vessels to use the port, paving the wave for the city’s trading boom. It was also Sheikh Rashid who insisted on expanding the original plans for the port that bears his name from four to 15 berths prior to its opening in 1972.

“Our development is much faster than anywhere else in the world,” says Galadari. “The things that take many generations in other countries take only one generation here to complete. Of course we follow the vision of His Highness Sheikh Mohammed [Bin Rashid Al Maktoum Vice President and Prime Minister of the UAE and Ruler of Dubai]. He pushes us always to develop to the highest standard and make the city a home for all the nationalities. Dubai is now a world leader thanks to his efforts.”

Returning to timescales for this project, Galadari says that Gold Council members from the old souk were last week invited to view a leasing event, with orders for spaces opening by the end of the year. By October 2019 the buildings will start to breathe with new life as Deira prepares to expand on the role it has held for decades.

“When I was young my father would bring me here,” says Galadari pointing over to the old Gold Souk. When I go there now it still smells the same as it did back then. It is a nice feeling and we want to give this back to the next generation. From my heart, this is a passion.”

Ithra: key projects

One Zabeel

Two luxury towers, linked by the world’s largest cantilever, will stand next to Zabeel Park. The towers will feature offices, apartments and the first urban OneOnly resort. “This will be a proper community where you can live in one tower and work in another,” says Galadari. “And you can cross the road by footbridges to go to Zabeel Park or the Trade Centre.”

Mixed-use Community, Jebel Ali

The affordable housing project features SOUL housing – Single Occupancy Urban Living. “There are people who sublet because they can’t afford the whole place. So now we are creating an option where even someone earning below AED5,000 per month can have their own space. There will be different units – a bed and a desk with shared amenities, or a studio with all your own facilities. We engaged architects and ran an international competition to come up with some good ideas. We have chosen the winner and he is coming up with the first concept. Hopefully by next year we will be able to hit the ground with a first phase that will accommodate around 4,000 people.”

Waterfront Market

Opened last year, the market builds on the heritage and status of Dubai’s traditional fish market (which has been demolished) in upgraded facilities that now include shops and FB outlets together with cultural activities and extensive parking.

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Opinion: Has real estate finally turned a corner in the UAE?

At last year’s Cityscape the focus was on affordability, which was a welcome step given that whole swathes of investors had for too long been priced out of the market.

This imbalance has largely been addressed, with studios in Dubai now available for less than AED500,000 (though fear not, money-bags investors, a Burj Khalifa penthouse can still be yours for AED100m).

But as one CEO told me recently when we were having the perennial State of the Economy conversation, simply dropping prices is not enough. “You still have to be offering a product or service that people want,” he said.

New ideas

Last week’s Cityscape was encouraging for exactly this reason. Imkan’s Aljurf was one of the most striking. For starters, it has been conceived as a second-home destination, which is a relatively new concept. (Kleindienst is billing its Heart of Europe as a staycation homes project, but with prices from AED15m-100m).

Whatever the price point, developers must offer something new that people are actually excited to buy

Then there is the location in Ghantoot between Abu Dhabi and Dubai, which is a beautiful and underused area. Spread along 3.4km of beachfront, and featuring two marinas, a wellness resort and serviced residences, it will have all the ancillary facilities needed to make it a real community.

Also up that end of town, Marsa Meydan, in Jebel Ali, will have a climate-controlled marina to make it a year-round attraction. Waterfront villas with private pontoons will sit by a network of canals and the seafront, with hotels, shops and cafes lining the canals and boardwalk.

Aljada in Sharjah might offer apartments for less than AED300,000 but is far from a budget location. Arada, the developer, announced Central Hub as its focal point, designed by Zaha Hadid Architects. Larger in scale than London’s Green Park, the car-free zone is designed to be walkable even during the summer and will include a public square, along with an outdoor cinema, food-truck village and skate park.

And finally, Madinat Jumeirah Living is Dubai Holding’s pedestrian-centric, residential development, with shaded walkways, green spaces and limited car access. The project will include a community centre, daycare centres and parks, all connected to Souq Madinat via a footbridge.

Clear objectives

These projects have a few things in common. They’re all attempts to build real communities, with year-round, family-friendly attractions and outdoor spaces that have multiple uses. They are not characterised by endless blocks of towers, identikit suburbs divided up by busy roads, or golf courses accessible only to the few.

Here are some other factors to consider. Second homes, located in vibrant communities, will be an attractive Airbnb option, making them a more profitable asset, and also widening Dubai’s tourism offerings. They’ll also be great locations for active retirees taking advantage of the new visa options.

So there are lots of firsts here, which just leaves the six-million-dollar question: is there enough demand?

Other issues addressed

As noted on page 22, the topic on everyone’s lips at Cityscape was ‘oversupply’. Rera CEO Marwan Ahmed Bin Ghalita addressed this directly, saying it was for developers to judge. “There is always an economic cycle and this industry is in the hands of the developers and whatever they want to offer to the investor.”

That’s not passing the buck. Property CEOs are grown-ups who have to make their own decisions about the market.

And it seems they have concluded that there is long-term demand. Judging by these projects they have also realised that you cannot just throw more of the same at the city – they must be inventive, bold and also realistic about what investors are prepared to pay.

I’d argue, then, that Cityscape moved us on from last year where the focus was simply on price. Finally there is an acknowledgement that, whatever the cost, developers must offer something new that people are actually excited to buy. Simple, right?

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Property price drops in UAE cities among world’s biggest

Residential price declines in Abu Dhabi and Dubai are among the most pronounced in the world over the past year, according to a new report by Knight Frank.

The real estate consultancy’s Global Residential Cities Index, which tracks the movement in mainstream residential prices across 150 cities, showed values had fallen by 6.9 percent in the UAE capital in the year to the end of June.

This made Abu Dhabi the second worst performing city in the index with only Turin, Italy showing a biggest price drop of 7.1 percent in the same period.

According to Knight Frank, prices in Dubai fell by 6.5 percent compared to an average rate of annual growth across the 150 cities of 4.3 percent.

Indian city Ahmedabad led the rankings this quarter, registering a 19 percent rise in values as Asia was named the strongest performing world region.

Two other Indian cities also made the top ten this quarter, Hyderabad (16 percent) and Pune (14 percent) as the Indian economy grew by 8.2 percent in the year to Q1, with this filtering through to housing demand and consumer confidence.

Budapest was the European city with the highest rate of annual growth while Turin had the weakest rate of annual growth globally.

Of the 150 cities monitored, 123 (82 percent) recorded a rise in residential prices during the year to June.

“With some already registering negative annual growth, we expect any further tightening of monetary policy to be slow and steady.In some cities, the performance of the mainstream and prime market is diverging,” said Knight Frank.

“A lack of prime supply is cushioning the top segment of the market in Sydney and Dubai where annual prime price growth is closer to 5.7 percent and -0.8 percent respectively.”

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Revealed: how Dubai homes are becoming more affordable

Getting on to the housing market ladder in Dubai is getting easier with affordability levels rising, according to the annual Bloomberg Global City Housing Cost Index.

The UAE city fell 29 spots – or, rather, rose – in the affordability ranking, one of seven cities to drop more than 10 spots from last year’s list, including Moscow, Istanbul, Rio de Janeiro and Mumbai.

Last year it took 71 percent of the self-reported average income of just over $3,300 to get shelter in Dubai. This year’s proportion was 47 percent.

The only cities where housing was cheaper relative to income than in Dubai were Houston and Riyadh, Saudi Arabia.

Globally, Toronto’s costs posted the biggest jump from a year ago in the index, which analyzes more than 100 municipalities worldwide.

Canada’s financial hub surged 18 places to rank 28th globally in the survey, while Vancouver had the second-largest leap – 16 spots to 16th overall.

Canada was a bargain, though, compared to Hong Kong and San Francisco which maintained their positions as the world’s two most expensive cities, based on four equal-weighted factors that comprise the index – the average monthly mortgage on a 1,000 square-foot home downtown, payments for a similar unit in the suburbs, and rents for a three-bedroom apartment in the city-centre and on the outskirts of town.

New York, London, Geneva and Singapore rounded out the top 6 in total costs, though there was minimal movement from a year ago in the top tier.

But no city was close to Hong Kong for breaking the bank accounts of loan-assisted buyers.

A typical 1,000 square-foot home in the city centre commanded an average mortgage payment of nearly $8,000 per month, according to Bloomberg-analyzed statistics from, a database of cost-of-living statistics contributed by users.

China’s capital Beijing and financial hub Shanghai each moved into the top 10 this year thanks mainly to surging prices faced by buyers of downtown units.

In 15 of the 100-plus municipalities surveyed, the monthly housing cost for units used in the analysis would be at least double an average income. Buenos Aires, Kiev and Mumbai led the “impossible dream” pack.

* With Bloomberg

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