Sharjah bids for slice of UAE tourism pie with Sir Bu Nair hotel project


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Shurooq, Sharjah's investment and development authority, has unveiled plans to develop a five-star hotel resort on the emirate's remote wildlife paradise of Sir Bu Nair Island.

At a briefing yesterday at the Arabian Travel Market, Shurooq announced that it would be developing part of the Unesco World Heritage Site island famous for its turtle nesting sites as a 100-room five-star hotel, 70 serviced apartments, private villas, a souq and an education centre.

Marwan bin Jassim Al Sarkal, the chief executive of Shurooq, said the scheme would cost Dh500 million to build and would be located around a natural harbour traditionally used by pearl divers to shelter from storms.

He added that Shurooq was currently looking for investors to help finance the project but said the authority would press ahead with development whether or not investors were found.

Mr bin Jassim Al Sarkal said that construction work was due to start later this year and the scheme was scheduled to be completed in 2017.

It will also include a tent village, coffee shops, restaurants an amphitheatre, a museum and an activity shop.

He said the island would be likely to attract tourists for stays of up to 10 days looking to enjoy the natural environment.

Mr bin Jassim Al Sarkal said that the new scheme would not harm the turtles and other wildlife present on the 13-square kilometre island. He said it would promote activities such as diving, cycling, hiking, sailing, canoeing and snorkelling.

"We're not developing this project to just create a new destination," he said. "We're developing it because we believe in eco-tourism."

According to Shurooq, visitors will be able to access the remote island, which lies 65 kilometres off the UAE coastline in the Arabian Gulf, via a two to three-hour boat trip from Sharjah or by air from Abu Dhabi, Jebel Ali or Sharjah.

Also speaking at the event, Hana Saif Al Suwaidi, the chairman of Sharjah Environmental and Protected Areas Authority, said that the island, also known as "Sir Al Qawasim" was home to 385 turtles as well as many rare species of marine birds such as peregrine falcons, alasards and alwaraqas. It is also home to rare fish, coral and seaweed species. She added that it had yielded archaeological finds dating back to around 3,500 BC.

"Sir Bu Nair is one of the most important environmentally protected areas in Sharjah," she said. "Biodiversity and the natural environment tops the list of priorities and interests for His Highness the Ruler of Sharjah [Dr Sheikh Sultan bin Mohammed]."

Development of the island would boost Sharjah's tourism sector, which despite growing visitor numbers, remains dwarfed by its larger neighbour Dubai.

This week the emirate announced that during the first three months of this year the number of guests staying in its hotels increased by 8 per cent compared with a year earlier to 466,218. It said that average occupancy increased to 80 per cent compared with 78 per cent the previous year.

French business

France has organised a delegation of leading businesses to travel to Syria. The group was led by French shipping giant CMA CGM, which struck a 30-year contract in May with the Syrian government to develop and run Latakia port. Also present were water and waste management company Suez, defence multinational Thales, and Ellipse Group, which is currently looking into rehabilitating Syrian hospitals.

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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.”

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