By Staff writer
Not satisfied with delivering his most recent Dubai project on time, the boss of Invest Group Overseas, Dr Anas Kozbari, has his eyes set on more developments, both at home and abroad.
By his own admission, Dr Anas Kozbari is a man who likes to surprise others.
“I like to exceed people’s expectations,” he says. “Most people are surprised to see the managing partner and CEO of a company out there on site, getting his hands dirty.
“But I like to get involved; I don’t like to be passive. It’s not my style to sit behind a desk and give orders. No. It’s all about following up — they say I am a freak when it comes to this.”
Whatever Kozbari’s management style is, it seems to be working.
The company he runs, Invest Group Overseas (IGO), was originally set up as a sister company of the MAG Group — chaired by Syrian entrepreneur Moafaq Al Gaddah — with its aim being to look for and invest into opportunities outside the UAE, especially in countries such as Egypt, Syria, Jordan and Lebanon. While concentrating on real estate development, the original plan was to also diversify into investments in Islamic banking, tourism and healthcare.
As time has progressed, however, IGO has concentrated ever more on its core business — real estate. In 2013, it launched the Polo Townhouses in the Meydan masterplanned community, and a year later it followed that up with the announcement that it would be building the Polo Residence, another project featuring 29 four-storey apartment buildings. Together, those projects are valued at around $545m.
Project delivery is an area that has given some Dubai developers a bad name in the past, but Kozbari insists that both of these communities will actually be finished ahead of time.
“Hopefully we’ll start handing over the Polo Townhouses in November/early December 2015 to the end-user,” he says, adding that the clubhouse will be completed by February next year, again ahead of time. The infrastructure for the Polo Residence is also now finished, and the entire project is about 25 percent complete. Kozbari says that should be up and running by the first quarter of 2017.
Not that the process has been easy, but the IGO boss has developed a reputation for making regular appearances onsite, to keep a close eye on the construction progress.
“We have gone through ups and downs, and we’ve learnt a lot — the new product we’re introducing is the outcome of that experience,” the IGO leader says. “We faced serious difficulties in some areas, but have taken proactive measures — we know where to go from day one.
“Most importantly, our relationship with concerned government agencies is great, and we’ve never failed to meet their requirements. I believe we have a spotless record.”
Next up for IGO in Dubai are two new projects, which are being designed at the moment. The first is in Al Furjan, while the second will be on a piece of land in International City, in a nod to the concerns that many Dubai residents have about affordability.
“Housing is becoming an issue, prices are becoming an issue, rent prices are becoming an issue,” says Kozbari. “We truly believe we can build to a high quality for an affordable price. Affordable housing is not a trend any more — it’s a demand in the market right now. After a thorough evaluation of the market, we believe we can penetrate this market segment and fill the gap.”
Certainly, the IGO boss still feels that Dubai as a housing market still has plenty of mileage. After a return to form in 2012, following a property bubble burst in 2008, the local real estate sector has had an uncharacteristically quiet year in 2015. Consultancy JLL projects that average prices will fall 15 percent throughout the year, while rents are also showing some signs of decline.
The shift away from the ‘boom and bust’ trend that characterised the emirate’s housing market in the previous decade is being welcomed by both owners and developers, who see it as a sign of maturity. In particular, the government’s decision to implement a mortgage cap, and the doubling of Dubai’s property registration fee from 2 to 4 percent has helped cool the sector. While Kozbari welcomes the changes, he also expresses concern that any further regulatory moves could have an adverse impact on the market.
“Today we don’t see a lot of parasites in the market — they have been expelled, and the market is left to the big and capable players, which is making it more stable,” Kozbari says, referring to the slew of smaller developers that collapsed during the previous property boom. “I do encourage the Land Department and RERA [Real Estate Regulatory Authority, Dubai’s property regulator] to maintain their policies for the time being, and not to introduce new drastic measures that redirect the market.
“Let’s have a period where the new regulations are in place for a set period of time, and people can adjust to them. Today, the procedure is clear to all sides — to the end-user and developer — so let’s keep it the way it is, and then more investment will come into the market. I would also like to invite RERA to create an advisory board that would be appointed by the Land Department to assist in the creation of any new regulations. This body could include some of the major developers in the market, and could help RERA and the Land Department better understand the needs of the market.
“At the end of the day, with the new regulations that have been introduced, our funds and our investments are upfront. It becomes so helpful for all sides in the property market to understand each other, and that comes through better communication.”
Going forward, the CEO says he remains confident in the strength of the market, as evidenced by not only his decision to launch new projects, but the commencement of the other new developments from sister firm MAG Group, as well.
However, he does express concern over the rising cost of living. For much of this year, inflation in the UAE has been at a six-year high, helped by the high cost of education, housing, utilities and transport. Earlier this year, the country abandoned its fuel subsidy programme in a bid to balance its books after the fall in the oil price.
“The economy has to go through a cycle — and this is worldwide, by the way,” Kozbari says. “What’s going on in the region doesn’t make you feel comfortable and it’s putting a lot of people on the edge. The UAE is always seen as a safe haven. In saying that, however, certain businesses are starting to feel the heat — and that is a fact. Without a doubt, low oil prices are having an effect on certain economies in the Middle East, but I’m hoping that it’s not going to be for a long time.”
It’s certainly the case that the oil price is putting pressure on the economies of every country in the GCC. Saudi Arabia faces a budget deficit of $120bn this year, according to projections from the IMF, while every other country is racing to right-size budgets that were drawn up during a period of relative prosperity. Of the six GCC nations, Oman and Bahrain are expected to fare worse, with their breakeven oil price over $100 and a relative lack of foreign exchange reserves.
The answer, says Kozbari, lies in diversification, specifically away from hydrocarbon-based industries, and education.
“I look at the issue of low oil prices from a positive angle. This is a wake-up call, you cannot build your entire budget on one industry,” he says. “We need to look for other alternatives. For the first time, in my opinion, I see politics leading economics. Nowadays, politics is the driving force behind the economy, not the other way round.”
The CEO cites the UAE as having a “magic formula” in that regard. While the country is also facing a budget deficit this year, it has managed to diversify into trade, tourism and transport, as well as a host of other sectors such as finance and light industry. Moody’s estimates that the oil sector accounts for only 39 percent of GDP in the UAE, although it is divergent depending on the location — in Abu Dhabi it accounts for 55 percent, for example, while in Dubai it is much less at around 2 percent. Speaking earlier this year, UAE Deputy Prime Minister Sheikh Saif Bin Zayed Al Nahyan, said the overall country figure would fall to 5 percent by 2021.
“When someone talks about the Middle East, the first thing that comes to mind isn’t IT, or cars, or aeroplanes — it’s oil,” Kozbari says. “Education can change all that. I don’t see the price of oil jumping in the near future, and if politics stays the way it is today, I believe that prices will maintain their present status. If we don’t find the right formula, and if we don’t tighten our belt — we are going to have poor economic growth soon.
“If you look at the wider Middle East, the three biggest problems that have had certain effects on the current instability in the Middle East are deprivation of self-respect and self-dignity by the ruling authority, a lack of education and poor distribution of wealth. When you are deprived of your own dignity and you don’t have a say, as your voice is no longer important and it is not worthy of being heard, then expect the unexpected.
“The fight against extremism was not born yesterday, we should impose the weapon of education as an effective tool to fight extremism. And we must start now. I do see the initiative of Sheikh Mohammed Bin Rashid Al Maktoum to introduce a set of global initiatives as a major step in the fight against poverty and illness, spreading knowledge and culture, and empowering the community and driving innovation.”
Outside the region, IGO also has a project in the US well in hand. The development — estimated to be worth about $500m — is based in the booming city of Frisco in Texas, and Kozbari says there has been some Gulf investor interest in the project, which was signed off by local regulators last month.
The Gate is a mixed-use development on 41 acres of land close to the heart of Frisco, containing office space, prime residences, a boutique hotel and retail space. IGO is working with Gensler to finalise the design of the Gate, and Kozbari is hopeful that construction will start at the beginning of next year.
“It’s a sophisticated and stable market,” he says, of his experience in getting the project signed off by American authorities. “There are no big surprises, and you know what’s coming.
“The city manager really drove me crazy about the requirements we needed — until we got to the point where we had to present the project before the city council. At that point, the city manager became our advocate — the guy who was defending the whole thing — and I loved that.”
With regard to any further moves in the US property market, Kozbari says that he will be focusing his efforts on the Frisco project until at least the end of 2016.
“Yes, we are looking for other opportunities in the US — I believe in that market. So by mid-2016, we will reevaluate the project on the table and by the end of next year the decision will be taken as to whether we move forward to another project.”
But over the long term, IGO’s main focus will remain on the UAE, especially as progress towards the World Expo 2020 event in Dubai gathers pace.
“That doesn’t mean we are not looking for other markets,” Kozbari says. “We are going to be in the US and we are thinking seriously to go into the Egyptian market. So we have those three markets we are concentrating on. When the time comes, and the situation stabilises, we will be getting into new markets, too.”
The aims may be ambitious, but IGO’s track record so far suggests that this is a horse worth backing.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.