Azizi Developments seemed to emerge from nowhere when it launched a raft of projects across Dubai in 2013. But now, for the first time, its founder and chairman is ready to tell the backstory of his journey from war-torn Kabul to a real estate empire in Dubai, where he's now one of the city's most talked about private developers
“There was war. Every day people would die,” Mirwais Azizi says calmly of a youth that was anything but peaceful in Afghanistan, a country reeling from its ten-year war with the Soviet Union. “My focus was to leave and get enough money for my family to join me.”
How the chairman of Azizi Properties not only got out, but subsequently amassed a fortune across multiple businesses and countries, could be the subject of a novel or screenplay.
It’s a story that weaves through the shattered former Soviet satellite states following the collapse of communism, and both the Russian and American invasions of his home country.
The journey led him to Dubai and, eventually, a property company that today has $1.7bn of contracts awarded, 52,000 launched units and 2.2 million sq m under construction.
I had been living here for many years and I was thankful for the safety in Dubai and excellence of education for my children
To understand how he built this empire – and where the money came from to do it so quickly – it is necessary to go right back to beginning.
And sitting in a modest, majilis-style meeting area at his head offices on Sheikh Zayed Road in Dubai, a cup of Afghan tea to his right and a mobile phone that repeatedly buzzes with messages on the sofa beside him, Azizi says he is happy to answer any question – and there are certainly many to ask. And so it begins.
Mirwais Azizi was comparatively lucky. Being from an educated family – he was the top pupil in his school and went on to practise law – he was able to leave Kabul in 1988 for Uzbekistan. His plan was to seek out an Afghan friend there who could help him further his goal of a new life.
“The trouble was I only had $700,” he says, picking up the story. “The idea was to visit my friend, who was in the textiles business, borrow $5,000 and then take my family to Europe.”
But after several days of his friend explaining everything he knew about the textiles trade the plan changed.
“He told me: ‘Lending you $5,000 is not the issue – I could give you $50,000 – but I want to help you start a business.’ So he gave me two containers of textiles worth $25,000 and told me to sell the contents over the next three months and return his money.
"I realised that I would make $8-10,000 profit if I did that. But then the next day I sold them both for $2,000 profit and gave him his money back straight away. He was shocked but also happy that I repaid his trust. After that he gave me another ten containers,” he says.
Azizi recounts how over the next six months he made $1m. He hired a Russian driver and an Afghan accountant, making a deal with the latter that they would leave for Europe with their families once they’d made $5m, which they estimated would take two years.
“But this was just after the end of communism when there was a big deficit for everything and it was easy to make money. It only took me five months to make the $5m and when my accountant said, ‘Now let’s go’, I told him: ‘I’m not going anywhere’. He stayed with me for another two or three years and I gave him $1m when he finally left.”
The government learned a lot from the 2008 crisis and we now have very good regulations from the DLD
When asked for the secret to this astonishing success Azizi offers a modest reply.
“There’s no secret. My textiles friend was importing 100 or 150 containers every week from Korea and each garment that cost $1 to buy would sell for $5 or $6. I quickly gained customers who would purchase $100,000, $150,000 of stock from me every week for a good price. So I just came to understand how business works.”
Hungry for further opportunities, Azizi turned his attention to Bulgaria, securing the rights to be the first importer of cigarettes into the post-Soviet state. He soon became the official dealer for the nascent Russian Commonwealth countries and built a network of offices in more than 20 countries.
It was this business that first led him to the UAE in 1994, after locating a Sharjah-based supplier of two cigarette brands that he thought would be popular in Uzbekistan. Azizi agreed to purchase two containers for $150,000 and had them shipped to Tashkent.
“Then I got a call from someone who saw them in customs and offered to buy them directly for $300,000. So I ordered 50 more containers.”
This buoyant trade led to an invite to visit the UAE from the cigarette distributor. Azizi was taken all over the emirates to meet various businessmen and at the end of the trip they suggested he make the UAE his home base for himself and his family. Impressed with the lifestyle, safety and ease of doing business, he readily accepted.
“And from here I controlled my operations. I had the cigarette business until 1998. After that I moved into petroleum, purchasing crude oil, having it refined and then shipped to many countries,” he says.
In 2002 he travelled to Afghanistan for the first time in 14 years, and found a country wracked by thirty years of conflict.
“I’d helped a lot of relatives and school friends – about 300 people – with money every month over the years. They all came to see me but when I sat with them I felt something different between us. And I kept thinking: did I change or did the people change? After a while I realised that they had seen so much blood and death and there was a physiological problem. So how could I help?”
Azizi began by building petrol stations and fuel storage facilities, which he says created 5,000 jobs in a matter of months. Then he built the American University of Afghanistan in Kabul, the first non-profit higher education institution in Afghanistan.
All the money from my businesses would come here [in Dubai] and I never had to worry about it being stored here
Next he established the Azizi Foundation to help underprivileged families, an initiative that included sponsored education placements for students to his university.
And in 2006 he spotted another opportunity.
“There was no private banking sector so I started one,” he says of Azizi Bank, which opened with 22, mainly foreign, employees due to a skills shortage.
“I then built a training centre that has trained 10,000 students, 4,000 of whom are now employees at Azizi Bank and Islamic Bank of Afghanistan (which he purchased from the Central Bank of Afghanistan).”
In 2006, he also moved into construction with Azizi Union Construction Company (AUCC), which, according to its website, “serves a broad spectrum of organisations and businesses, government, NGO and military sectors.”
And this led to the business in Dubai for which he is now best known.
“I had been living here for many years and was thankful for the safety in Dubai and excellence of the education for my children,” says Azizi of why he embarked on a mission to build a property empire in the UAE.
“All the money from my businesses would come here and I never had to worry about it being stored here. So I felt that Dubai had given me a lot. What could I make that was nice for the city?”
He purchased his first plot of land in 2007 and launched the first development at Cityscape in October 2008.
“We sold over AED1bn of properties. The customers paid 10 percent so we had AED100m in deposits. But then one month later there was the financial crisis and I chose not to start construction. By the first quarter of 2009 I had given every deposit back, in full, except for one customer who we could not contact.”
Asked where he got the money to repay the deposits he replies: “My other businesses were doing well. I hadn’t started to build so I only lost my design costs and marketing spend. In business you cannot make money every time.”
In 2013 Azizi decided the time was right to start again, first on the plot he’d purchased in 2007 and then in a splurge of other projects as the property market regained pace.
Today Azizi Developments has a pipeline of projects worth $12bn and more than 200 ongoing projects across Dubai. The portfolio includes plans for the world’s fifth-tallest skyscraper, located on Sheikh Zayed Road which will be ready by late 2021 or early 2022.
“The design has been completed by one firm and is being reviewed by Atkins,” he says of its status.
Azizi Developments strives to promote world-class sports locally and internationally
Last year it handed over 13 projects and seven more are set for delivery from Q4 2018 onwards, adding 2,268 units across various Dubai locations to its growing portfolio. The list includes Azizi Mina, its second development on Palm Jumeirah, and Azizi Aliyah Residence, the developer’s first project at Dubai Healthcare City.
Azizi Developments also recently announced an important milestone at Azizi Riviera, valued at about $3.2bn, after it passed the 20 percent completion mark.
The Meydan development will eventually house over 15,000 apartments and feature an integrated retail complex that has a mix of high-street shops and leisure and entertainment amenities. Plans to build a marina on the canal are also in the pipeline.
“We want a nice environment for people to live and work. The apartments are low-rise and it’s close to Meydan Mall. We are also building a four or five star hotel. The design is very good, the materials are very good. Everything is top quality,” Azizi says proudly of the flagship project.
There are two obvious questions to ask any developer who embarks on a development spree of such scale. The first is perhaps most pertinent to those unaware of Azizi’s history in business: where did the money come from to build such a large supply of stock?
He replies that Azizi invests in a project using “historic and current unit sales”. Dubai Land Department (DLD) rules state that developers must have 100 percent ownership of the land and must complete 20 percent of construction before they can use offplan sales money stored in the escrow account.
“But I always have three options so that construction never has to stop. Once construction has reached 20 percent, funds are released from the escrow account. If further finance is required in order to keep the construction running to schedule we may use bank finance, though this is rare. And following that, and if necessary, we will inject our own money to ensure timely completion of projects. But until now I have rarely needed the second two options.”
The second big question is whether he is worried about oversupply.
Once again Azizi seems untroubled by the notion, noting the continued strength of offplan sales which he says remain buoyant and are currently rising again after a brief lull during August. More generally he points to the many hundreds of cranes dotted around the city as proof of confidence in the market.
Before I start a business I study it, I think about it. I take an idea and develop it before I begin
“Sure, there are businessmen who make mistakes, there are good and bad projects. But people are still purchasing. Dubai is a strategic and prestigious place where people with money want to own a house," he says.
"For example, all the rich people in India have a business and family here. And then the Arabs come for shopping and investments – I see many Saudi customers. And the Chinese are starting to arrive, so this keeps the market going.”
When asked about his confidence in the economy more generally he responds: “There is a very simple answer. This is a city without metal, copper, crude oil, or even drinking water. But it has prospered because we have the best leadership in the world who have built beautiful things in the desert. You can find anything you need close to where you live. This is very attractive to many people.”
Asked whether the real estate sector has any reputational issues due to unfinished projects not being satisfactorily cleared up after the 2008 crash, he says: “The government learned a lot from the 2008 crisis and we now have very good regulations from the Land Department. Whereas a developer could previously pay 10 percent of land costs and then open an escrow account, they must now own 100 percent of the land. And in addition to the 20 percent escrow project value, they must continuously verify ownership of a project, benefiting all parties involved. If the project fails then it is easy to manage.”
As the conversation is taking place almost ten years to the week since Lehman Brothers collapsed, it feels appropriate to ask what would happen here if a comparable event were to happen again.
“If something bad happens in America it is damaging everywhere. And in Dubai it is also the case, but we have customers from so many other countries so it is not so bad,” he replies.
When asked what does keep him awake at night, Azizi says he frets about more immediate events that are under his control. “I always want to build and handover to the people. That is my biggest concern.”
Azizi’s current pipeline runs through to 2024. While no further projects have been announced, Azizi reveals that the company is set to build and manage its own, as yet unnamed, hotel and hospitality chain that it will roll out to other countries.
Asked whether Azizi will go to the market for debt to finance this or any other ventures, he says there are no plans. “Now is okay. If I feel I need it I will organise one year before, not at the last moment.”
He also reveals that an IPO for the hospitality and development businesses is being discussed. “We are waiting for the audit report at the end of the year. When this is finished we will see whether to apply.”
I always want to build and handover to the people. That is my biggest concern
His ultimate aim, he admits, is to be “the number one private developer and not just here but everywhere. I want to build a unique tower or building in every major city; something to make people happy.”
And he says he will “always support Afghanistan in business and education. It is where I was born.”
Clearly he shows no signs of taking a backseat. In fact, we are told his son, Farhad Azizi is still CEO – a post he has held since 2013 – though he is no longer listed as such on the company website as he is currently managing Azizi interests overseas. Another son, Fawad Azizi remains as deputy CEO. Clearly, Mirwais Azizi will be busy steering the ship for some time to come.
But before he resumes his day, there is just enough time to ask again what he thinks has been the key to his success over the decades.
Azizi thinks for a moment and then replies: “Before I start a business I study it, I think about it. I take an idea and develop it before I begin. And then it is important to have the right team to follow up on the idea to build it. You must have trust in business and in normal life. This makes you successful. You need trust and you build it by the work that you do.”
The same kind of trust that the Afghan textiles trader in Uzbekistan showed to him so many years before? Mirwais Azizi smiles. “Yes, like this.”
Azizi Developments this month said it would deliver seven projects from Q4 2018 onwards, adding 2,268 units across various Dubai locations to its growing portfolio.
These planned handovers include units in Shaista Azizi, Samia Azizi, Azizi Star, Farishta Azizi, and Azizi Plaza in Al Furjan. The development brings the total number of projects by the developer in Al Furjan to 17.
Azizi Mina will be Azizi’s second development on Palm Jumeirah, housing 174 residential apartments and four penthouses. Azizi Aliyah Residence will be the developer’s first project at Dubai Healthcare City, offering a total of 346 residences.
Azizi Developments has created a strategic partnership with Shabab Al Ahli Dubai Football Club for the 2018/ 2019 season in the hope of steering the club towards a repeat of their 2015/16 title. This is the second year that Azizi has sponsored the club, which he considers part of giving back to the community that has provided him so many opportunities.
It’s not just football. As part of its partnership with Meydan, Azizi is committed to the growth of equestrian sports in the region by sponsoring the Sheikh Mohammed Bin Rashid Al Maktoum UK Endurance Festival.