The Dubai real estate market has seen a significant appreciation in land prices since Covid. What is leading to this escalation?
I think during Covid a lot of people from all over the world discovered Dubai. Whether from Iran, Russia, England, Africa or India, they realised that the city has proven that it has great policies, while infrastructure is robust with good healthcare and quality of life. So, we have a lot of people coming in from all over the world, including from India, and it was a big discovery for people.But remember, Dubai is a very small town, it has 3 million people only. So if we have 500 people from Africa and 500 from India, 500 from Russia, we do not have enough homes or stock. Because it’s a tiny place, we were overwhelmed.
Several well-heeled Indians have made Dubai their second home. Some estimate 30% of buyers are Indians…
The integration between UAE in general, specifically Dubai, and India is historic. The benefit of this long relationship really continues to grow. Dr Mahathir Mohamad (former Malaysian prime minister) said, look East, and where do we look in the East? Is there anything better, bigger, more stable, and keeps growing than India? There is nothing.I think one needs to be reasonable that the relationship is deep, the understanding of cultures between us is deep, the trust is deep. The leaderships (on both sides) are really integrating their thoughts. I think, the relationship, trade and business will continue to grow and I hope it does, because we need that grand global economy, which is India, to be part of us.In Dubai, Emaar Properties is seen everywhere, but that is not the case in India. Despite entering the market in 2005 with a Rs 8,500 crore investment plan, the journey hasn’t been smooth. Could you share your perspective on the experience in India?
We were a very young company when we came to India 20 years ago and since then we have been learning. We made a mistake. We are not good as partners because we do business differently. We do business long term. We don’t want to make money tomorrow, the day after and sometimes you end up with partners who want to make money tomorrow morning. That is their right, there’s nothing wrong with that. So that really created a lot of obstacles for us. So it was a bad partnership. But we have learnt. We have issues that we have to deal with every once in a while and this is unfortunately one of them, but you know we are moving forward. India is our future.
India is among the largest economies of the world, among the most populated, most stable, and that makes me optimistic. I really think I am doubling down on India because everything is about leadership in my country and in your country. I really think with Mr Modi (Indian Prime Minister Narendra Modi), we have once-in-a-lifetime leadership and we want to take advantage of that. You have seen how he was received in Europe and America. It really tells you that India is serious about business and India under PM Modi is very serious about business. So I am very positive about tomorrow.
You talked about doubling down, but with several legal cases and pending arbitration, what gives you the confidence to move ahead and invest more?
First of all, thank God all our cases are looking good. We won most of them. And we know that our books are clear, we don’t have anything to worry about. Let the cases take their space, but our business is completely in a separate vehicle and I am not going to really sit down and wait for government rules and regulations to be 100% perfect. I would rather go in right now, plan for the long term with India, and as regulation improves, I want to be upfront. A lot of investors want to wait till everything in regulation becomes perfect. I think, with almost 30 years of experience, we have learned many things in our lives to minimise the risk going forward. But that does not put any shadow of doubt on where India’s going in the future.
How is Emaar planning to maintain its reputation while navigating the complexities of the Indian real estate sector? Very few global developers have succeeded in India.
We operate in about 15 countries and if we do the deal in Riga (Latvia), we will get to the number 16. We only do large projects. I’m looking at buying out the old port in Riga, that will give us about 20,000 homes. Good people is the key issue. If they believe in your thoughts and they follow the same policies. Number two, when it comes to homes, this is interesting business — anywhere in the world, you deliver homes to your customers and if you maintain them, I don’t care who is in that market, you will do very well. Buying a house is the most important decision in one’s lifetime. It is the biggest investment and the most expensive purchase, but unfortunately most real estate companies make the money and then leave the customer. I give my customers 10 years’ guarantee. I have fixed their homes and we go back to them anytime they have problems.
Can you provide insights into Emaar’s growth plans and future investments in India?
Our company really depends on three businesses. We are big in hospitality, we have over 50 hotels that we have built, manage and operate. We are big in shopping malls business and on the residential side — where we build apartments, villas or golf courses. And we believe that we should repeat the same in India. I think hospitality in India has a great future as the supply and demand situation is very encouraging. Residential, I don’t need to tell you, the demand in India has no limits. When it comes to shopping malls business, India is just at the beginning. So, I believe that we should really focus on these sectors and we should focus on the main cities of India first.
The Indian government is also talking about smart cities as well as mega urban (slum) rehabilitation and redevelopment projects. Is that a space that is of interest to Emaar?
Yes, you are right. We do projects of scale and such projects of urban redevelopment are not only interesting from a business point of view but also have an emotional connect. I grew up quite modestly. In Dubai, most of us not too long ago lived in huts. And I think now there are new ways to deal with this. We have done one such project in Turkey and delivered 8,000 homes. It was an incredible experience. I can assure you if I get a project like that in India I can shock everyone and show how it is done. People will get a (land) title and the way I do it is I give them the title the day they vacate the site so they know they are getting economically empowered the day they get their 70 square metre house in two years. At the same time you clean the city, you build new development but you also keep the people who are from there, at the original site. You do not relocate them.
You said retail is going to be a key focus for you. Emaar has announced a project in J&K. There are also plans to build a museum in Gujarat we hear.
The museum project, which is just at the beginning, is under the guidance of the leadership. It’s a very exciting project. In Kashmir too we are progressing. I do not have the exact details of where we are but we are moving forward. We also are likely to announce a sizable project in the resort space in the next few months in the hills of India that I am exploring quite seriously. Arabs run away during summer and we always go north, which is Europe. But India is so close to Dubai and it has at least 40 destinations which can be great summer spots. And trust me, 400 million Arabs are looking for a destination. We are looking beyond Kashmir for that – maybe in the Northeast or South.
Other than real estate, you have several other business interests as well. Noon.com competes with Amazon in the GCC region. Any chance of bringing Noon to India or partnerships with Indian retailers that have aspirations in the GCC countries?
You will laugh if I say it took a 58-year-old guy to start a technology business. I could not even decide between a Samsung or an iPhone, so it was a big risk for me. But I was concerned that foreign companies were controlling the space and I built it to compete. That’s what many in India have done too. I think I have done something nationalistic. I didn’t want one American company to sell milk to Arab children. So first I actually approached Indian companies to partner with but they were busy with their own efforts so I built on my own. I think Amazon is feeling the heat. We are focussed on dominating the Middle East and we are not far away from that. Even in ecommerce, there are a lot of changes we are seeing – quick commerce, etc. We will need 1.5 years to solidify our position in the Middle East. India is the place we want to be. It is the economy. We have great friends in India and will be open to work closely with these companies.
After ecommerce and content (Diwan), you are now one of the key actors behind digital bank Zand, where you have Kumar Mangalam Birla as one of your co-investors. How do you scale that up further?
When it comes to banking or payments, the business of physical branches is so old fashioned. Who goes to the bank, writes a cheque anymore? It’s only a small group perhaps. We have to take the jump right now and learn along the way. This is a new investment for all of us. We are just starting out with Zand Bank. It’s a fast-evolving, changing space with newer disruptive technology.
India’s startups have seen a significant correction in valuations and new opportunities to invest are cropping up. Are you evaluating prospects in any particular field?
The Indian startup ecosystem is really our future. This startup scene is the future of Silicon Valley. The engineers are either located in India or they travel to the US to write code. Trust me, it’s the Indians and not the Americans who are building the technology. So yes, I am very keen to look at prospects. Globally valuations have corrected, so it’s a great time.
The trade agreement between India and the UAE is a little over a year old. How is it translating on the ground?
The two sovereigns have been doing business for a long time. But they never had the care that they have been having. Every time PM Modi lands in the UAE the excitement is palpable. UAE’s great friend is India, so when a man representing 1.4 billion people comes visiting, it’s a very serious business for us. Our leadership (UAE President Mohammed bin Zayed Al Nahyan) knows this and the two have deep trust and belief in each other. I really believe both of them are once-in-a-lifetime leaders. The trade ties and now the FTA are a fallout of this common bond and it’s cementing our relationships for a long, long time.
