As the name suggests, SmartCrowd offers a smart way to access the prime Dubai real estate market.
Founded in 2018, the Dubai-based start-up is a digital real estate investment platform that allows investors to crowdfund their property purchase. The platform allows individual investors to take a fractional share in a rental property.
“SmartCrowd came up as a personal need of wanting to invest in real estate and realising that it was very difficult for me to do so without putting a significant portion of funds in one single asset or trying to own a property without taking on a lot of debt,” says Siddiq Farid, who cofounded the company with Musfique Ahmed.
“So, the idea of micro investments came to mind as part of a better way to allocate capital to direct real estate, without being exposed to interest rate fluctuations. This idea served as the seed from which SmartCrowd continues to grow.”
This is how it works. SmartCrowd enables people to allocate some capital to real estate without requiring a huge amount of capital to buy the whole property. They can own a fraction of it.
It identifies prime real estate opportunities across Dubai and rigorously vets each project to ensure profitability and mitigate risk. Once a project is selected, investors can browse detailed profiles, financial projections and risk assessments before committing funds, says the company’s chief executive Riz Ahmed.
“With investment amounts starting as low as Dh500 ($136.15), SmartCrowd opens the door to real estate investment for a wide range of investors, from seasoned professionals to first-time buyers,” he says.
People contribute funds to acquire property via a Special Purpose Vehicle (SPV) in the Dubai International Financial Centre, which is allocated proportionally dependent on the size of investment, ensuring legal ownership.
SmartCrowd then administers the SPV and manages investments and properties using various strategies such as long-term rentals, holiday homes and short-term rentals. Upgrading properties enhances rental value, and refurbishment and flipping deals are also pursued.
Ultimately, investors benefit from generated income and capital appreciation upon property sale.
According to Mr Farid, people’s inability to invest in real estate due to the lack of capital, their inability to source deals and their lack of information or knowledge to assess whether or not it’s a good investment are key challenges.
“We solve them by giving them access by fractions like microinvestments. Second, we source the deals and vet them, so, we present good investible opportunities on to the platform. And third, we provide them with all the market data to help educate people to make effective investment decisions,” he says.
“We don’t just support in the initial investment like some others, but we [also] manage the properties, as well as the eventual sale of the property,” adds Mr Ahmed.
SmartCrowd says it generates revenue through a transparent fee structure. It charges fees for sourcing and managing properties throughout their life cycle, until a successful exit generates returns for investors.
The company has accomplished more than 20 exits, with an average annual return of over 15 per cent, according to Mr Ahmed. Since inception, SmartCrowd’s user base has expanded to more than 5,000 investors and it has managed to raise nearly Dh200 million, he says.
In sourcing properties, SmartCrowd works closely with real estate brokers as well as some of the largest developers in Dubai, Mr Farid says, without disclosing details.
Real estate is witnessing increasing investments in the UAE, as world economies open up and more people travel.
The Emirates has also introduced initiatives such as residency permits for retirees and remote workers, in addition to expanding its 10-year golden visa programme, giving further impetus to the property market.
Developers including Aldar Properties, Damac Group, Omniyat and Sobha Group are developing new projects as demand continues to remain strong.
Crowdfunding – a type of alternative finance – refers to the practice of funding a project or venture by raising small amounts of capital from a large group of people, usually through the internet.
The UAE government in March 2022 approved the use of crowdfunding as the country aims to open more streams of funding for smaller businesses and broaden the country’s liquidity pool.
The global crowdfunding market is predicted to triple in size to $39.8 billion by 2026 from $13.9 billion in 2019, according to Statista. The concept, which originated in the US, is gaining traction in the GCC’s six-member economic bloc.
SmartCrowd says that since 2019, its assets under management have grown by 33 times and investor base has expanded 43 times.
The company has secured more than $6 million in funding so far and is gearing up for another round within the next 12 months.
“Our revenue model, which charges fees as and when investors make money, means we don’t require any additional funding to continue to grow in our existing market, except if we’re looking to expand through acquisitions or expand into other geographies,” says Mr Ahmed.
After completing more than 150 Dubai residential properties to date, SmartCrowd this year is aiming to tap the commercial real estate in the emirate. It is also aiming to launch operations in Saudi Arabia.
“In terms of our investments, we are focused on Dubai at the moment and we are expanding to other emirates in the UAE, and then, we’re eyeing Saudi Arabia as another destination that we want to unlock and give people access to,” says Mr Farid.
At the moment, 60 per cent of SmartCrowd’s user base is UAE residents and 40 per cent from outside of the Emirates, “so we’re a global player already”, he says.
“Dubai’s global appeal attracts people worldwide,” he adds.
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But while the investor base has been growing, SmartCrowd continues to struggle with certain challenges.
“Our biggest challenge is finding the right opportunities for our investors and not be drawn in by speculation in a booming or difficult market – we’ve operated in both and been successful,” says Mr Ahmed.
“We look at over 30 properties before finalising just one for our platform, ensuring that whichever property we select is going to hold and increase in value over the coming years, as well as deliver healthy rental income for investors.”
Meanwhile, lack of financial literacy remains one of the biggest challenges for the company.
“A big part of what we do is create educational content, and this is part of our go-to market strategy. We aim to enrich people’s understanding of financial principles,” says Mr Farid, who has more than 11 years of experience with companies like KPMG, Deloitte and EY.
Q&A with Siddiq Farid, co-founder and Riz Ahmed, CEO of SmartCrowd
Where do you want to be in five years?
Mr Ahmed: We’d like to be the premium real estate investment platform globally, allowing investors to diversify their portfolios across multiple countries. We are aiming to have more than Dh500 million in assets under management in three to five years’ time.
If you could do it all differently, what would you change?
Mr Farid: I would be slightly more aggressive on the marketing front to raise more awareness. It’s a great model so I would’ve taken more advantage of this.
What new skills have you learnt since launching your start-up?
Mr Farid: I'm a finance professional by background, a Chartered Accountant as well as CFA holder. But through this experience I've become deeply involved in product development and technology. Also, having built a regular business, I focused on the legal and regulatory and compliance side, and then, scaling teams. So, a lot of soft skills have been developed over this period.
What other successful start-up do you wish you had started?
Mr Farid: I don't think of other start-ups that I wish I had started. I am pretty satisfied with what we have built, which is very unique. We are pioneers in the space and we have made a real impact for a lot of people, enabling them to invest in real estate for the first time ever.
Who is your role model?
Mr Ahmed: My role model is Nelson Mandela. I run a registered education charity, EqualEd, and have been doing work in South Africa. I really admire how he brought a divided country together through compassion.
Mr Farid: My role model would be my mother. She’s not a highly educated person but had built a couple of businesses on our own. That's where I get my entrepreneurship inspirations.
What is your next big dream?
Mr Ahmed: To make SmartCrowd synonymous with smart and rewarding real estate investment, not just in Dubai or the UAE, but globally.
Mr Farid: I would love to see the company I started nearly six years ago, now become a household name.
Learn more about Qasr Al Hosn
In 2013, The National's History Project went beyond the walls to see what life was like living in Abu Dhabi's fabled fort:
SCHEDULE
Thursday, December 6
08.00-15.00 Technical scrutineering
15.00-17.00 Extra free practice
Friday, December 7
09.10-09.30 F4 free practice
09.40-10.00 F4 time trials
10.15-11.15 F1 free practice
14.00 F4 race 1
15.30 BRM F1 qualifying
Saturday, December 8
09.10-09.30 F4 free practice
09.40-10.00 F4 time trials
10.15-11.15 F1 free practice
14.00 F4 race 2
15.30 Grand Prix of Abu Dhabi
Find the right policy for you
Don’t wait until the week you fly to sign up for insurance – get it when you book your trip. Insurance covers you for cancellation and anything else that can go wrong before you leave.
Some insurers, such as World Nomads, allow you to book once you are travelling – but, as Mr Mohammed found out, pre-existing medical conditions are not covered.
Check your credit card before booking insurance to see if you have any travel insurance as a benefit – most UAE banks, such as Emirates NBD, First Abu Dhabi Bank and Abu Dhabi Islamic Bank, have cards that throw in insurance as part of their package. But read the fine print – they may only cover emergencies while you’re travelling, not cancellation before a trip.
Pre-existing medical conditions such as a heart condition, diabetes, epilepsy and even asthma may not be included as standard. Again, check the terms, exclusions and limitations of any insurance carefully.
If you want trip cancellation or curtailment, baggage loss or delay covered, you may need a higher-grade plan, says Ambareen Musa of Souqalmal.com. Decide how much coverage you need for emergency medical expenses or personal liability. Premium insurance packages give up to $1 million (Dh3.7m) in each category, Ms Musa adds.
Don’t wait for days to call your insurer if you need to make a claim. You may be required to notify them within 72 hours. Gather together all receipts, emails and reports to prove that you paid for something, that you didn’t use it and that you did not get reimbursed.
Finally, consider optional extras you may need, says Sarah Pickford of Travel Counsellors, such as a winter sports holiday. Also ensure all individuals can travel independently on that cover, she adds. And remember: “Cheap isn’t necessarily best.”
The Perfect Couple
Starring: Nicole Kidman, Liev Schreiber, Jack Reynor
Creator: Jenna Lamia
Rating: 3/5
Islamophobia definition
A widely accepted definition was made by the All Party Parliamentary Group on British Muslims in 2019: “Islamophobia is rooted in racism and is a type of racism that targets expressions of Muslimness or perceived Muslimness.” It further defines it as “inciting hatred or violence against Muslims”.
Captain Marvel
Director: Anna Boden, Ryan Fleck
Starring: Brie Larson, Samuel L Jackson, Jude Law, Ben Mendelsohn
4/5 stars
What the law says
Micro-retirement is not a recognised concept or employment status under Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations (as amended) (UAE Labour Law). As such, it reflects a voluntary work-life balance practice, rather than a recognised legal employment category, according to Dilini Loku, senior associate for law firm Gateley Middle East.
“Some companies may offer formal sabbatical policies or career break programmes; however, beyond such arrangements, there is no automatic right or statutory entitlement to extended breaks,” she explains.
“Any leave taken beyond statutory entitlements, such as annual leave, is typically regarded as unpaid leave in accordance with Article 33 of the UAE Labour Law. While employees may legally take unpaid leave, such requests are subject to the employer’s discretion and require approval.”
If an employee resigns to pursue micro-retirement, the employment contract is terminated, and the employer is under no legal obligation to rehire the employee in the future unless specific contractual agreements are in place (such as return-to-work arrangements), which are generally uncommon, Ms Loku adds.
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F1 2020 calendar
March 15 - Australia, Melbourne; March 22 - Bahrain, Sakhir; April 5 - Vietnam, Hanoi; April 19 - China, Shanghai; May 3 - Netherlands, Zandvoort; May 20 - Spain, Barcelona; May 24 - Monaco, Monaco; June 7 - Azerbaijan, Baku; June 14 - Canada, Montreal; June 28 - France, Le Castellet; July 5 - Austria, Spielberg; July 19 - Great Britain, Silverstone; August 2 - Hungary, Budapest; August 30 - Belgium, Spa; September 6 - Italy, Monza; September 20 - Singapore, Singapore; September 27 - Russia, Sochi; October 11 - Japan, Suzuka; October 25 - United States, Austin; November 1 - Mexico City, Mexico City; November 15 - Brazil, Sao Paulo; November 29 - Abu Dhabi, Abu Dhabi.
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.”
Libya's Gold
UN Panel of Experts found regime secretly sold a fifth of the country's gold reserves.
The panel’s 2017 report followed a trail to West Africa where large sums of cash and gold were hidden by Abdullah Al Senussi, Qaddafi’s former intelligence chief, in 2011.
Cases filled with cash that was said to amount to $560m in 100 dollar notes, that was kept by a group of Libyans in Ouagadougou, Burkina Faso.
A second stash was said to have been held in Accra, Ghana, inside boxes at the local offices of an international human rights organisation based in France.
Who is Tim-Berners Lee?
Sir Tim Berners-Lee was born in London in a household of mathematicians and computer scientists. Both his mother, Mary Lee, and father, Conway, were early computer scientists who worked on the Ferranti 1 - the world's first commercially-available, general purpose digital computer. Sir Tim studied Physics at the University of Oxford and held a series of roles developing code and building software before moving to Switzerland to work for Cern, the European Particle Physics laboratory. He developed the worldwide web code as a side project in 1989 as a global information-sharing system. After releasing the first web code in 1991, Cern made it open and free for all to use. Sir Tim now campaigns for initiatives to make sure the web remains open and accessible to all.
Ziina users can donate to relief efforts in Beirut
Ziina users will be able to use the app to help relief efforts in Beirut, which has been left reeling after an August blast caused an estimated $15 billion in damage and left thousands homeless. Ziina has partnered with the United Nations High Commissioner for Refugees to raise money for the Lebanese capital, co-founder Faisal Toukan says. “As of October 1, the UNHCR has the first certified badge on Ziina and is automatically part of user's top friends' list during this campaign. Users can now donate any amount to the Beirut relief with two clicks. The money raised will go towards rebuilding houses for the families that were impacted by the explosion.”
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