The tower being built at Dubai Creek Harbour will be a smaller, more elegant structure than previously planned, Emaar Properties founder Mohamed Alabbar has said.
Speaking at this year's Sharjah Entrepreneurship Festival, he also said while there are no plans to list ecommerce giant Noon in the immediate future, it will happen in the coming years.
Mr Alabbar announced in August that the cable-tied tower, designed by the Spanish-Swiss architect Santiago Calatrava, that was due to be 100 metres taller than Burj Khalifa, was being redesigned.
We are creating one of the most interesting avenues and I hope that it will be the first time that cars can enter the mall
Mohamed Alabbar,
Emaar Properties founder
Speaking at the festival, which was held at the Sharjah Research Technology and Innovation Park, Mr Alabbar said the new design had been approved and construction has started on the tower, which will not be as tall as Burj Khalifa.
He described the new tower, the centrepiece of the six square kilometre project, as an elegant version of the famous building.
"We build these beautiful towers because we make money out of the apartments that look at these towers. The [project] tower doesn't make any money," Mr Alabbar said in an on-stage conversation with UAE content creator Ahmed Al Marzooqi.
"Everybody wants to have an apartment in Paris overlooking the Eiffel Tower, right? So we said 'listen, our buildings are only 50 storeys tall, why do we have to build something one kilometre tall?'
"We changed our minds and we redesigned. In the coming months we will show the tower. I think we did something like male and female [towers], so Burj Khalifa will be the male and Creek Tower will be the female."
The Dubai Creek Harbour site is twice the size of Downtown Dubai but will not have a shopping centre comparable in size to Dubai Mall.
"We are also building a new mall [at Dubai Creek Harbour] ... but I think we are going do a new generation," he said.
"We are not building the biggest in the world but definitely we are creating one of the most interesting avenues and I hope that it will be the first time that cars can enter the mall. This will be very, very unique – [cars will be] electric only."
Noon evolving
The discussion on Saturday, under the headline 'Towering Success: What it Takes to Build a Business Empire’, covered all aspects of Mr Alabbar's businesses.
He launched the $1 billion e-commerce platform Noon with the help of Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, in 2017.
He described setting it up as "one of the most difficult challenges of my life".
"I started at the age of 60 – I wasn't exactly 19 years old so I had to understand the difference between iPhone and Samsung, which is a big challenge for me," he said.
Mr Alabbar said he was lucky to find good people to help him build the company, which has evolved from ecommerce into a super app that offers grocery shopping, food delivery and peer-to-peer payments.
"Noon today is an incredible story," he said. "Actually, it's not even ecommerce company anymore because ecommerce has changed. If you want to do ecommerce, I don't think you will make it anymore because Amazon do not make [big] profit out of ecommerce; they make profit out of the cloud business.
"So that's why we reinvented ourselves. Today the company is still growing 30 to 40 per cent year on year. It's probably one of ... the only companies in ecommerce that in five to six years be profitable, which is very rare but then our model is so different."
Mr Alabbar said Noon, which operates in the UAE, Saudi Arabia and Egypt, sells four million products and attracts one billion visits a year.
While he again ruled out an initial public offering for Noon, he did admit it was under consideration.
"I think at the end of the day we have to list," he said.
"I'm not really sure [when it will be], the board have to decide but definitely in the coming few years. It looks very interesting."
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THE BIO
Born: Mukalla, Yemen, 1979
Education: UAE University, Al Ain
Family: Married with two daughters: Asayel, 7, and Sara, 6
Favourite piece of music: Horse Dance by Naseer Shamma
Favourite book: Science and geology
Favourite place to travel to: Washington DC
Best advice you’ve ever been given: If you have a dream, you have to believe it, then you will see it.
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.”
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