Real estate finds value in a world of turbulence

If you’ve lived in the UAE for any small amount of time, you know that property development is the booming business which all other businesses depend on. That was until the market bottomed out just over a year ago.

While headlines around the world reported of huge losses and project delays, there were some notable exceptions. Emaar, a name that is familiar to almost anyone who has ever visited the UAE, is one of those companies. Chances are you’ve been in many of the compounds they’ve designed. Maybe you even live in one.

Emaar Properties PJSC is one of the world's largest real estate companies and has recently been earning a reputation as a provider of ‘premier lifestyles’. At the helm of this development giant is Chairman Mohammed Bin Ali Alabbar, and it is his leadership that has helped Emaar find value in a world of turbulence.

Mr. Alabbar, a UAE national, is a senior aide to Dubai's Ruler and UAE's Vice President and Prime Minister Sheikh Mohammed bin Rashid Al Maktoum. In addition to his position as Chairman of Emaar, he also serves as the Director General of Dubai's Department of Economic Development, is a member of the Dubai Executive Council, and is Chairman of Bahrain-based Al-Salam Bank-Bahrain BSC.

According to Mr. Alabbar, in times of economic uncertainty the best thing to do is to focus on the consumer and make sure you deliver on your promises.

Earlier this year at Al Salam Bank for instance, Mr. Alabbar was resolute on holding the bank’s liquidity ratio at 37%. During Q1 of 2009—known worldwide as one of the worst quarters on the year’s economic rollercoaster—Al Salam earned Dhs 77m ($21m) in net profits.

In the first nine months of 2009, Emaar Properties PJSC has recorded revenues of over Dhs 5b ($1.4b), led by its strategy of strengthening customer-oriented initiatives and its commitment to project delivery. By handing over projects on time and even ahead of schedule, Emaar was able to prove to investors that despite the recession, good management could still guarantee returns. For Emaar itself, the company recorded net operating profits of Dhs 1.4b ($381m) in Q3!

That number is likely to rise as signs point to real-estate prices gaining momentum in premium areas such as Burj Dubai—the world’s tallest tower that truly embodies Emaar’s reputation as a developer of luxury lifestyles. Other projects managed by Emaar Hospitality Group LLC, an Emaar hospitality & leisure business subsidiary, include The Address Hotels + Resorts, Arabian Ranches Golf Club, Dubai Polo and Equestrian Club, and the Dubai Marina Yacht Club; many of which have also posted recent gains in property prices.

Well done Mr. Alabbar!