Dubai's billionaire investor Mohamed Alabbar focuses on succession planning

Exclusive: preparing the future cadre of leadership to steer his companies to the next stage is his 'passion' now

Mohamed Alabbar's business interests include e-commerce platform Noon and Americana. Satish Kumar / The National

Dubai’s billionaire entrepreneur Mohamed Alabbar, whose business interests span from e-commerce platform Noon to food retailing business Americana and digital bank Zand, is busy with succession planning.

The founder and managing director of Emaar Properties, Dubai’s biggest listed property developer by market value, is spending most of his time preparing the next generation of leadership that will steer these companies into the future, he told The National in a recent interview.

“All our companies have fantastic balance sheets, fantastic people, fantastic operation and now I am spending my time on leadership,” he said on the sidelines of the Future Investment Initiative in Riyadh last week.

“I am spending my time so that companies have a core [team] of 25 people each that can [lead] these companies to the next level.”

It is time to think how he can “guard” the businesses he has built over the years, he said.

“I can be a little wiser at this age [and] make sure I guard my companies. I have more than 200,000 people working for me,” said Mr Alabbar, who turns 66 on November 8.

However, the question is how can “I leave them in good hands in years to come? That really is my passion now. I am talking about succession”, he said.

Mr Alabbar set up Emaar in 1997 and grew the company into one of the leading real estate developers in the region, with projects such as the Burj Khalifa, the world’s tallest high-rise.

Emaar, which is listed on the Dubai Financial Market, currently counts the Investment Corporation of Dubai as its top shareholder, with a stake of more than 24 per cent.

However, the entrepreneur has also built a business empire spanning sectors such as e-commerce, food retailing and production, hospitality, technology, financial services and venture capital.

Mr Alabbar’s property ventures also include Dubai-based developer Nshama and Abu Dhabi-based Eagle Hills.

He is also a shareholder in Americana, the largest quick service restaurant operator in the Mena region, along with Saudi Arabia’s sovereign wealth fund, the Public Investment Fund.

The food retailing business, which operates brands such as Pizza Hut and KFC, runs 1,950 restaurants in the region.

On Wednesday, Americana unveiled plans to sell 30 per cent of its share capital in a public offering and list dually on the stock markets in Riyadh and Abu Dhabi.

Mr Alabbar is also a joint partner with the PIF in home-grown e-commerce platform Noon, which competes with Amazon in the UAE, Saudi Arabia and Egypt.

In August, Emaar sold its online fashion platform Namshi to Noon in a $335.2 million deal.

The entrepreneur, who backs Dubai’s digital bank Zand, is also a significant investor in technology fund Middle East Venture Partners.

Through his investment vehicle, Alabbar Enterprises, he holds stakes in several other companies, including global online fashion retailer Yoox Net-a-Porter Group.

Leadership delegation and business succession planning are important issues in the six-member GCC economic bloc, particularly since the beginning of the Covid-19 pandemic, as entrepreneurs and family businesses holding vast amounts of wealth prepare to hand over the reins to the next generation.

About 87 per cent of high-net-worth investors in the Middle East believe their family businesses are set up for an efficient wealth transfer to the next generation — but only 24 per cent actually have a full estate plan in place, according to a survey by Geneva's oldest private bank Lombard Odier.

Family businesses and those run by wealthy investors dominate the GCC region, contributing about 60 per cent of gross domestic product to their respective economies and employing more than 80 per cent of its labour force, according to a March 2021 blog by Washington-based think tank the Atlantic Council.

In the UAE and Saudi Arabia, the Arab world's two largest economies, family businesses account for about 90 per cent of private companies, it said.

Mr Alabbar, who in 2019 described the launch of Noon as “the biggest risk in my life that I have taken”, said the e-commerce platform was looking for expansion opportunities elsewhere in the region.

“We also have to remember noon is a young company — five years in the UAE and Saudi Arabia and a few years in Egypt — so we need to take market shares first [as] these are big markets after all,” he said.

Noon’s growth has been exponential in the past few years and “we are challenging the global incumbents every morning”, he said.

Mr Alabbar said expanding his portfolio of investments is not a priority at the moment and he remains focused on the companies in his “areas of expertise”.

“I’m not 42 years old anymore to [be able to] learn a new trick,” he said in response to a question on whether FinTech and the metaverse were areas he would be interested in investing in.

“I don’t think so. I have friends talking to me about [FinTech], but I said, 'Guys, I have these companies I’m responsible for, so why don’t I guard them [first]'.”