Humaid Al Dhaheri is a fiercely proud 34-year-old, Emirati. As a bachelor, he has the time to wear two hats. In his day job he has a senior capacity with National Bank of Abu Dhabi looking into the key sectors of the country’s economy such as construction and tourism. And from 4pm he oversees his family’s property business, Jauan Salem Establishment, from an office in Sky Tower on Reem Island.
The business is not a simple case of ensuring the rents are paid on time. For a start it is based across two countries – the UAE and the United Kingdom; six emirates – Abu Dhabi, Dubai, Sharjah, Al Ain, Ras Al Khaimah and Fujairah; and covers commercial and residential properties.
Mr Al Dhaheri does not just buy properties and wait for the rental yield to rise. He also refurbishes and sells them. The company searches for properties that are within its price range and will bring in a healthy yield after an investment in renovation.
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The business revolves around property development and spotting properties being sold below market value that are ripe for enhancement. The operation has been running since his father began it in the 1970s, when the business dealt with mostly residential properties in the UAE and both residential and commercial sites in London because of his father’s fondness for the UK.
It involves a knowledge for construction, an eye for a property and a good sense of what yields are possible over what time frame, he says. Mr Al Dhaheri has run the business since his father’s passing in 2013 and predicts a bright future for any Emirati that decides to move into entrepreneurship because of the support shown by the government.
A number of government-backed initiatives such as the Khalifa Fund look to support entrepreneurs and small business by offering financing and expertise to a sector that accounts for more than 90 per cent of registered companies in the UAE. Last year Sheikh Khalifa, President of the UAE, approved a federal law that included a requirement for federal authorities and ministries to contract at least 10 per cent of their procurement budget for purchasing, servicing and consulting to SMEs.
Mr Al Dhaheri is part of a trading tradition that has helped the UAE become an international hub, and he sees the economy, with its aid for Emiratis in housing, education and utilities, as positive and progressive.
Abu Dhabi’s property market may not have been growing as fast, but compared with other parts of the UAE and other parts of the world it is a stable environment to do business in, he says.
“Abu Dhabi does need to look at its real estate legislation,” he says. “Compared to Dubai, where there is a law that stops landlords from applying an ad hoc increment on tenants after staying two years – the increment can only be [applied] determinant on the location. Abu Dhabi got rid of the rent cap, which of course as landlords helped us because we canraise rents at whatever pace we see fit. However, it is not healthy because everybody increased the rent to unreasonable rates. I think the government is now looking to bring back the cap, but at a reasonable rate for both parties.”
Because of the business’s long track record and because it owns a reasonable number of properties in the UAE and London, it was able to withstand the economic uncertainty that hit global markets in 2008, he says.
“The drop in property prices when the global financial crisis hit was a boom time for our company. It was a buying opportunity, as many people were distressed and had to sell. We have increased our property portfolio by about 40 per cent in the past seven years. We hunt [for] people who want to exit the market.”
Mr Al Dhaheri’s business is now expanding into other sectors such as hospitality.
“We are now into hotels in the UAE, for long-term investment. We target 3- to 4-star hotels with a team of investors. We construct, it goes up and we let it go. But we are now looking at keeping a hotel on and generating revenue that way. Dubai and Abu Dhabi are on a growth curve for the world. In London we like to buy studios and smaller spaces because they are very easy to rent out and not so hard to buy.”
However, there are fresh day-to-day challenges, including rising costs.
“I would say that the cost of running a business is now getting very expensive because the cost of fuel, materials, labour and rent is all increasing without the same increase in business or profit,” he says. “If I increase the wages for my employees then I must regain those costs from the supply chain or from the end user. That’s the way it is.”
Mr Al Dhaheri is sanguine about the rising costs of business because his bottom line is covered and the spread of his business across the UK and the UAE offers a safety net, but he sees opportunity for all his counterparts in the support from the government.
“In the UAE you can be what you want. I think for local entrepreneurs this land is incredibly fertile because the government will support them in whatever endeavour they choose, be it trading, construction, services – there are huge opportunities out there. For Emiratis the biggest impediment to success is the character of the individual concerned. Realise what our fathers have built and try and emulate them. That is what I do in business.”
ascott@thenational.ae
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