Aswaaq rekindles expansion plans across the UAE

A supermarket chain established to encourage Emiratis into the retail sector has rekindled expansion plans put on hold following the financial crisis

Aswaaq, owned by Investment Corporation of Dubai (ICD), plans to open 15 new branches across the UAE over the next five years.

The company plans to establish three new branches each year across the Emirates.

The brainchild of Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, the company was founded in 2008 to foster national identity and to increase the number of Emiratis working in retail, from administration to front-line roles that were not traditionally filled by UAE nationals.

The group plans to open new mini local shopping centres anchored by Aswaaq supermarkets in Al Badaa, close to the World Trade Centre, and Al Barsha South, close to Mall of the Emirates, ICD said yesterday.

The company is currently conducting a feasibility study to establish further stores in new areas of Dubai such as Al Warqa, Al Khawaneej and Al Quoz.

Aswaaq currently operates seven supermarkets in Dubai, five of which are located within small company-owned and operated community shopping centres.

The announcement harks back to the ambitious expansion plans Aswaaq originally revealed in 2009 when the store said it hoped to open 30 outlets by 2013 and 40 by 2014 and ultimately to expand into other GCC countries.

At the time, the company said it hoped to eventually finance its expansion through an IPO but was waiting for market conditions to improve before going public.

It also comes as ICD, Dubai's main state-owned holding company which also holds stakes in Emirates Airline and Emaar, said it was considering selling stakes in its companies to the public as the emirate's economy recovers from the global financial downturn.

As well as employing a far higher proportion of Emirati nationals than other stores and selling fresh produce in a souq-style format, the company is known for offering Emirati entrepreneurs a 20 per cent discount on rent for three years in its neighbouring stores and help on how to establish their businesses legally and structurally.

"Our embraced shopping concept revolves around changing the pattern of customers' purchase based on shopping in large quantities overflowing their monthly needs," said Yousuf Sharaf, the deputy chief executive.

"The traditional market is another concept in which Aswaaq deeply believes. It hinges on providing the customers with an amazing shopping experience through the warm-hearted and friendly atmosphere."

lbarnard@thenational.ae

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As a vital witness, she was forced to relive the ordeal by police who needed to identify the attacker and ensure he was found guilty.

Now aged 16, Nora has decided she wants to dedicate her career to helping other victims of crime.

“It was very horrible for her. She saw her mum, dying, just next to her eyes. But now she just wants to go forward,” said Khulood, speaking about how her eldest daughter was dealing with the trauma of the incident five years ago. “She is saying, 'mama, I want to be a lawyer, I want to help people achieve justice'.”

Khulood’s youngest daughter, Fatima, was seven at the time of the attack and attempted to help paramedics responding to the incident.

“Now she wants to be a maxillofacial doctor,” Khulood said. “She said to me ‘it is because a maxillofacial doctor returned your face, mama’. Now she wants to help people see themselves in the mirror again.”

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

Aswaaq rekindles expansion plans across the UAE

Aswaaq, owned by Investment Corporation of Dubai and set up to encourage Emiratis into the retail sector, plans to open 15 new branches across the UAE over the next five years.

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