DUBAI: Mohamed Alabbar, chairman of Dubai’s giant global developer Emaar Properties, is an optimist and a strong believer in the attributes of positive thinking. The brain behind Dubai’s new vibrant and upscale downtown district and the world’s tallest skyscraper, Burj Khalifa, argued that the Gulf emirate had weathered the 2008 property crash and said he was determined to look into expanding Emaar’s presence in volatile Lebanon.
Speaking to The Daily Star on the sidelines of this week’s “Vogue Fashion Dubai Experience,” an event that brought together celebrities from the fashion world and emerging Arab designers at the gigantic Dubai Mall – another one of Emaar’s projects – Alabbar said the emirate had “learned lessons” from the global financial crisis when property prices nose-dived.
“The United Arab Emirates tried hard to learn from the crisis,” Alabbar said. “The Central Bank is exercising a lot of pressure on all banks and placing restrictions on real estate lending.”
Five years after the economic downturn, Dubai’s property sector is booming with demand and prices steadily increasing. The recent rush, however, has triggered fears of a repeat of the 2008 scenario.
But Alabbar is optimistic, explaining that banks too have become “very conservative” in lending to real estate while the state was keeping a watchful eye.
“I am very happy that the government is in constant contact with us,” he said. “Before that sort of discussion was not in place, now every month or so they give us a call to consult.”
Dubai’s big property developers have also taken a series of measures to avoid a new bubble, Alabbar said. Emaar, for example, is working to minimize flipping by selling to end customers and increasing brokerage and commission rates.
Alabbar boasts the qualities of his establishment’s “strong and sophisticated” computer system, which is capable of busting flippers and blacklists them in future transactions.
“For example if you’ve sold your property in the first six months, you will not be able to get into the system again because we want to minimize the number of people who want to flip,” he explained.
According to Alabbar, human beings were all “greedy” and “born traders.” “You should not discourage this dynamic; this is human nature, but you should regulate it and make it as safe as possible.”
Alabbar also opposes the theory that the Dubai market has become saturated, maintaining that Emaar’s philosophy was based on “building communities and comprehensive environments” rather than building housing units.
Founded in 1997, Emaar specializes in creating value-added, master-planned communities that meet the full spectrum of lifestyle needs. Dubai’s new downtown area, which comprises landmarks such as the Burj Khalifa, the Dubai Mall and the performing fountain, demonstrate the firm’s philosophy.
“In our part of the world – the so-called developing world – the quality of life for human beings is not good,” he said. “Yes, you have electricity, you have water, you have sewage, you have all that but how can you create a civilized environment where you can live, walk the kids to school and ride a bike?”
Alabbar said that Dubai and the region were in need of more comprehensive concepts that marry real estate with lifestyle.
Emaar does “a completely different work from developers who construct one building and sell it,” the businessman said. “We don’t like to do that. We like to do the roads, the landscape, figure out where you can park your car or bicycle and in which coffee shop you’ll buy your morning coffee.”
Experts in developing planned communities, Emaar operates in key global markets with projects in the Saudi Arabia, Syria, Jordan, Lebanon, Egypt, Morocco, India, Pakistan and Turkey.
In Lebanon, Emaar is currently executing a single project, the Beit Misk residential community, which spreads over 655,000 square meters in the Metn area above Beirut.
Alabbar, who talks passionately about Beit Misk, recalled that he signed the contract for the $800 million project in 2008, the same week Hezbollah and its allies took over large swathes of Beirut after a government decision to dismantle the party’s private communications network.
“It’s a well-known fact that land value in Lebanon is ascending despite temporary slowdowns,” he said. “Incidents always happen in Lebanon, but the Lebanese are resilient and they get over it and I believe in that spirit.”
Alabbar argued that not all the Lebanese would get a chance to immigrate and that projects ought to be developed to enhance the quality of life of the Lebanese.
“I am still bullish on the Lebanese market,” Alabbar said, adding that if the right opportunity presented itself, Emaar was ready to develop more projects in the country.
As for Emaar’s investment strategy in the Middle East, Alabbar said that in light of the political turmoil several countries in the region were going through, several “difficult” decisions and delays had ensued.
He explained that although business in Syria –where Emaar was building a residential community on the outskirts of Damascus – was “doing very well,” his establishment was forced to freeze works and shut down offices there when the unrest erupted some two and a half years ago.
“I’d say in certain countries we’re growing and in certain countries we have to put the work on hold because the situation is unclear,” Alabbar said.
He added that while in Egypt Emaar had plans to expand, in countries like Libya, which is in need of all types of infrastructure, Emaar was in a “wait-and-see mode.”
“Libya needs time to breathe and organize itself, but I hope it doesn’t take them too long,” he said.
In the meantime, Alabbar is eyeing projects in Morocco and India, but Baghdad looks to be his favorite destination for the upcoming period.
“I know that talk about Baghdad might be surprising, but you know the city needs big development, so I look to Baghdad with interest,” he said.
“If there is really something really sizeable at the right place I don’t mind to venture.”