By Anil Bhoyrul www.arabianbusiness.com
In less than six months, Mohammed Alabbar has delivered two of the world’s most eagerly awaited projects. How did he do it?
It’s been a good year for Mohammed Alabbar. We’re barely into June and the charismatic chairman of Emaar has already delivered two of the biggest projects on the global stage. The iconic Burj Khalifa tower opened in January, and four months later came the first ever Armani Hotel, built within the tower.
“When you start building something, you can either build the same boring environment or you can do more. What’s important is whether that single piece of stone is really affecting human life. Some things are very easy to do and some things are very hard. But that’s our job, we get it done,” he says.
Few could argue with him right now, particularly Emaar shareholders. Last month the property development company announced first quarter 2010 revenue of AED 2,886 million ($786 million), underpinned by the robust performance of the company’s hospitality and shopping mall subsidiaries.
This was an impressive 87 percent higher than the first-quarter 2009 revenue of AED 1,540 million ($419 million). Net operating profits for the first quarter of the year reached AED760 million ($207 million), 152 percent higher than the first-quarter 2009 net operating profit of AED302 million ($82 million).
But this, it seems, is just the beginning. Key construction contracts have been awarded in Egypt, Jordan and Saudi Arabia that will drive Emaar’s integrated community developments in these countries. “Several of these projects will be handed over this year, including homes in Egypt; and commercial offices in Syria at The Eighth Gate development,” says Alabbar.
While the likes of Syria’s Eighth Gate represent where the action will be later this year, it is the past few months that has really seen Alabbar and Emaar capture the headlines around the world. After many delays, the long awaited opening of the Burj Khalifa finally took place on January 4th. From a construction standpoint the project broke almost every record there is to break, and the industry has universally agreed that the end product is indeed a world-beater on every count.
For Alabbar however, it marked the end of several years of being extremely hands-on, many sleepless nights and keeping and eye on practically every detail of the construction process.
“The only thing was I was anxious and impatient, then it was almost done and it was dusty and I wanted to see it shine, like a little boy. This is my global wonder that I want to enjoy. I am always looking. I was so lucky to be able to do this. There have been a few sleepless nights, problems with contractors and quality issues that we had. Things we agreed on and in reality they don’t look good.
“The hardest thing is the ability to deliver it and not compromise on quality – especially the finishes and installation,” he says.
On January 5th, as the big clean up was underway following the spectacular fireworks display to mark the opening of the Burj Khalifa, Alabbar was back at his desk planning the next “biggie.” It happened to be in the Burj Khalifa tower again, as the finishing touches were being put to the first Armani Hotel in Dubai.
The 160-room hotel was personally designed by Giorgio Armani and finally opened its doors to the public on April 28th. Despite several delays, the general consensus is that it was worth the wait – in addition to the rooms that occupy the first eight floors, plus levels 38 and 39 of the tower, it boasts eight restaurants, retail outlets and a spa. The buzzword is “luxury”, with Eramosa stone floors and zebrawood panels.
“Now, for me, as I enter this building, everything that I look at feels “Armani”. I feel the Armani comfort and elegance from every angle. Armani tried to design this well and we tried to execute it well,” says Alabbar.
The hotel is the first venture between Armani and Emaar, but it looks like being the first of many. The two companies are also working on a hotel project in Milan, while the first ever Armani Resort is penciled in for Marrakech, and the first Armani Residences Villas for Marassi in Egypt. Other destinations including New York, Tokyo, Shanghai and London are also being considered.
“Our journey has started here in Dubai. What next? Well there are a lot of projects on the drawing board, but we are being meticulous in choosing the type of city we want,” says Alabbar.
So where will this journey take Emaar next? The company’s growth strategy for 2010 is to focus on the larger Middle East, North Africa and South Asia (MENASA) region, which is home to more than 30% of the world’s population, of which some 800 million people are below the age of 25.
“Our strategy is to develop integrated lifestyle communities in these markets that meet the growing demand for affordable luxury,” says Alabbar.
Emaar made rapid progress in its various projects in different stages of completion during the first quarter of 2010, especially the residential and commercial developments in Downtown Dubai. Boulevard Plaza and Marina Plaza are also nearing completion, and work on other residential towers
Emaar Hospitality Group recorded strong occupancy levels at all five Address hotels in Dubai in the first quarter of 2010, and Emaar Malls Group hosted more than five million visitors during the month-long Dubai Shopping Festival at its flagship mall, The Dubai Mall. Weekly visitor footfall during the festival month was up an average 30% as compared to the prior month.
Emaar Retail, the entertainment and retail business of Emaar, opened the region’s first KidZania, the award-winning edutainment concept promoting the physical and intellectual growth of children through professional role-plays. Along with Dubai Aquarium & Underwater Zoo, Dubai Ice Rink, SEGA Republic and the 22-screen Reel Cinemas, Emaar Retail strengthened its leisure portfolio in The Dubai Mall in the first quarter of 2010.
Within the healthcare portfolio, the healthcare subsidiary Emaar Healthcare Group opened a new clinic in The Meadows, complementing the Dubai Mall Medical Centre, the region’s largest out-patient medical facility, which opened in 2009.
Among international milestones for the company in the first quarter of the year are the on-schedule progress on projects in Saudi Arabia, Egypt, Jordan, India, Turkey, Syria and Pakistan. In India, the company’s joint venture Emaar-MGF is on course with its planned initial public offering of AED 2,790 million ($761 million).
Alabbar says: “India is one of our key markets in our global expansion strategy, and we are today one of the largest foreign direct investors in the country’s real estate sector. We have a large land reserve in India of approximately 11,340 acres across 26 cities – 96% of which is fully paid for, and we have total development plans for about 437 million ft2, of which nearly 335 million ft2 is proposed to be residential projects.”
Talking to Alabbar, you often have to stop and ask yourself whether we really have just been through the worst financial crisis in living memory. His passion and enthusiasm appear greater than ever – as does his optimism for the future.
“When you talk about the financial crisis you have to look at the global situation. What you see here today at the Armani Hotel is much better than what was originally designed. When you walk around the whole site you can see with your own eyes the quality we have developed. Projects like this are built to last for hundreds of years. But financial cycles, they come and go. And I think the world is now telling a positive story about Dubai,” he says.
So how does Alabbar himself see the future panning out, particularly in Dubai which has been badly hit by the real estate market crash?
“You need to keep in mind that Dubai is an icon within 500 million people that can never change. This is the city of the future for 500 million people.
“With respect to all other cities, this is the one. It will grow, growth is coming back. I think, with respect to everyone else, there will be one player. Other players are a little injured. It will be an interesting time for us. The market changed, we are tight and we have learned from our mistakes but this city will move on. Other friends of mine are hurting and I wish them well, but we will be the player,” he says.
Alabbar has in recent years become a major figure on the global stage, and is widely seen as one of the few “stars” who have continued to shine in Dubai, despite the financial crisis. He is largely credited with not just building up Emaar into a world class property developer, but crucially, expanding the company into many different areas, long before the property crash. He talks freely and comfortably about the various different sectors and achievements. But at heart, he will always be a developer.
As he explains: “My friend said to me recently that ‘Mohammed, when you graduated from university the first thing you did is you got your job, you borrowed some money to renovate your mother’s house. And I saw you detailing and thought you were a developer from that day’.”
Few could argue with that.