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Sun 24 Aug 2008 04:00 AM

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The entertainer

Claire Ferris-Lay meets Saeed Al Muntafiq, the man responsible for the $65bn Dubailand project.

Claire Ferris-Lay meets Saeed Al Muntafiq, the executive chairman of Tatweer and the man responsible for the ground-breaking $65bn Dubailand project.

This is the only office that I know of where you have to go to work with tourists and tigers," laughs Saeed Al Muntafiq as he surveys his empire, which doubles as Dubailand's visitor and sales centre.

Below him, a gaggle of excited daytrippers shuffles through a reception area, then stops to gape slack-jawed at the two enormous Bengal tigers prowling a specially-constructed enclosure alongside the lobby.

In 15 or 20 years from now someone in Los Angeles might well be asking if they have Freej in Orlando. I am convinced it will happen.

Bus parties and big cats - it's just another day for the executive chairman of Tatweer, a unit of government-owned Dubai Holding, and the company responsible for Dubailand, the Singapore-sized development on the outskirts of Dubai which has so far attracted some of the biggest names in entertainment, retail and hospitality.

Since its foundation in 2005 Tatweer has grown to become one of the region's largest leisure developers, and Dubailand is undoubtedly the company's most ambitious project to date. Once completed, it is expected to become Dubai's chief weapon in the battle to attract 15 million tourists a year by 2015.

The 3 billion sq ft development will house a Tiger Woods-designed golf course as well as theme parks and residential areas. The project's pièce de rèsistance is the multibillion-dollar Bawadi hotel strip, which will host the single largest hotel in the world, Asia Asia, on its 10km Vegas-style boulevard.

And while we may be looking at an intricately detailed model today, out in the desert, the dream is fast becoming a reality. In the last three years Tatweer has signed strategic alliances with six major theme parks for Dubailand. And attracting the likes of DreamWorks, Universal Studios and Six Flags hasn't been an easy task, admits Al Muntafiq.

"The big gun players such as Marvel wanted proof of concept before assigning multibillion-dollar intellectual property to something like Dubailand," he says. "Over the last three years we have provided proof on the concept and as a result we have got all of them today."

Al Muntafiq adds that he is still in ongoing discussions with other major theme parks operators around the world, including those in Asia and on the Indian subcontinent. And although the big international brands that Tatweer has secured will drive much of Dubai's tourism growth, the project will have a local flavour too.

In addition to Hollywood majors DreamWorks and Universal Studios, Tatweer has also decided to try its luck with a local theme park concept based on the popular UAE animated series Freej. While few outside the UAE may be familiar with the show's 3D characters, Al Muntafiq argues that it won't be long before the brand transcends national borders - and even cultural ones.

"Why not make Freej the Disney of Dubailand?" He asks. "In 15 or 20 years from now someone in Los Angeles might well be asking if they have Freej in Orlando. I am convinced it will happen."

Al Muntafiq confirms that as things stand, all Dubailand projects are expected to be delivered on time. However, the pace of Dubai's growth is such that he will not take for granted that Tatweer will be able to keep up with the extraordinary demand for leisure facilities.

"If you take hotels, today we have only 50,000 rooms and we are running at an average occupancy rate of about 96 percent," he notes. "Tourism is growing at an average of 9-11 percent, and if you do the calculation then by 2010 we will still be running at [an occupancy rate of] 90-92 percent, because there aren't going to be enough rooms to meet the tourism growth."

Al Muntafiq dismisses the notion that the high oil price and resultant leaps in the cost of air travel worldwide, will dampen tourists' enthusiasm for Dubai.While prices are down more than 20 percent since the peak of $147 per barrel on July 11, air fares continue to rise - and yet more passengers than ever flock to the Middle East.

"The price of oil is an economic driver but when people get on a plane and travel - specifically families who have a budget in place - they don't just account for airline travel," he explains.

"They account for how much it will cost them to stay in a hotel, how much to rent a car, and how much to eat. So I think families adjust accordingly to the price of the oil."

Healthcare standards in Dubai within the next two to three years will be as good if not better than the rest of the world.

"From a tourism travel perspective, people will always want to go on holiday," he adds.

And yet Tatweer is not solely devoted to putting a smile on the face of Dubai's future tourists. As well as holding stakes in Dubai Mercantile Exchange and Dubai Industrial City, the company's inaugural project is Dubai Healthcare City (DHCC), the world's first healthcare free zone.

The first phase of DHCC, which is 4.1 million sq ft in size, features a state-of-the-art medical cluster comprised of day clinics, diagnostic centres, rehabilitation centres, transplantation centres, hospitals, clinics and a sector for pharmaceutical and equipment suppliers.

And as recently as last week, the company announced plans to invest a further $1bn into DHCC's second phase, bringing the company's total spend on the project to $3.4bn.

The additional funding will be used for a new wellness resort, situated over 2 million sq ft of land by Dubai's creek, which will include a rehabilitation centre as well as a wellness and herbal centre.

Like Dubailand, the aim of DHCC is also to attract an international crowd, explains Al Muntafiq. "[Healthcare] standards in Dubai within the next two to three years will be as good if not better than the rest of the world," he insists, pointing to a host of high-profile international partners to have signed up with DHCC, including the Mayo Clinic, AstraZeneca, Harvard Medical International, Moorfields Eye Hospital, Great Ormond Street Hospital for Children NHS Trust, and Wyeth Pharmaceuticals.

"A large piece of the project will be dedicated to sports medicine," he adds.

"Many British football teams come and train in the UAE, and we felt just on that basis that being a speciality medical sports centre would add value."

Yet while Al Muntafiq could be excused for focusing exclusively adding value through the considerable tasks facing him in Dubai, he is looking beyond the immediate horizon, and insists that when Dubailand is completed in 2016, Tatweer's journey will go on.

"The number one thing for Tatweer, which it was created for, was to deliver on its projects in Dubai - that's the reason for its existence," Al Muntafiq insists. "At the same time we also have to be prudent and responsible and think ‘what happens next?'.

"The challenge we are facing now is how to grow even further," he continues, adding that Tatweer is to launch a new company that will focus on the development of its international investment strategy.

"You cannot just wait until 2016 when everything is delivered and then start thinking about what to do next," explains Al Muntafiq.

"The new team will have the sole job of thinking what we do north of 2010."The new entity, Tatweer Investments, will be headed by the CEO of Dubai Energy, Ahmad Sharaf, and Al Muntafiq dismisses the suggestion that government-owned Tatweer or its subsidiaries may meet resistance from foreign governments when it comes to buying assets abroad.

Multibillion-dollar bailouts of Western banks such as Citigroup and UBS as well as high-profile real estate purchases, have raised concerns in the West that strategic assets such as banks and energy firms may end up in the hands of foreign - and specifically Middle East - governments.

"The UAE and the government of Dubai have no political agenda," Al Muntafiq insists.

"Besides, I think opinion has moved on from the statements that have been circulating in economic circles over the past 18 months, in terms of the fear of sovereign wealth funds."

"As far as the region is concerned there are definite perceptions that exist, but when it comes to the UAE and the practical implementation of acquisitions, we haven't met any resistance," he continues.

"Perceptions are definitely there - I'm not going to be naive enough to say they don't exist - but when it comes to actually getting on with it, we don't seem to be finding any resistance."

If foreign governments are less suspicious of the Gulf's state-backed investment vehicles, then Al Muntafiq doesn't doubt that the global credit crisis has provided cash-rich Middle East wealth funds with some excellent shopping opportunities.

And the next time Al Muntafiq jets abroad on one of his shopping trips, he will certainly face a different reception to that which he encountered on his early journeys outside the UAE.

"I remember when I made my first business travel with the government 10 years ago, few people knew where Dubai was," he recalls.

"Now, I cannot go anywhere where a doorman, a concierge or a taxi driver doesn't know where Dubai is. That alone is an indication that those perceptions have changed."

Beating the 'flippers'

Last week Abu Dhabi's largest property developer Aldar Properties followed the example of Dubai government-owned Nakheel, and banned the practice of 'flipping'. The procedure, where investors buy property and then quickly sell it on at a higher price, has been blamed in part for the soaring price of real estate in the UAE.

"The one sad thing about the real estate sector [in Dubai] is that sometimes real estate is being looked upon as stocks," says Al Muntafiq.

"Real estate is not stocks - you cannot buy something today and say I am going to turn it around tomorrow and make a 50 to 40 percent margin on it, because real estate doesn't lend itself to those laws."

The contracts for Tatweer's own real estate projects in Dubai Healthcare City (DHCC) and its real estate development in Dubailand, Mizin, adhere to new government laws which will not allow the practice to go on. Apartments in DCHH must be paid for 100 percent before being sold, while those in Mizin can only be sold after six months.

Real estate is not Tatweer's core business - "We use the real estate to actually fuel our industry," says Al Muntafiq - but he is not concerned about reports that suggest Dubai's property market is headed for a crash.

While Morgan Stanley issued a report earlier this month that predicted property prices in Dubai would fall by 10 percent in 2010 as supply of real estate units outpaces demand, Al Muntafiq is confident that the market can defy expectations.

"It is very important to listen, hear, discus and pay attention to what the experts are saying. But it is also important for an economy not to be reactive to one or two analysts' reports," he says. "There isn't a project that you put on the market [that] doesn't get sold out."

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Cutter 12 years ago

The report by Deloitte & Touche shows that Dubai achieved the highest occupancy rates of any city in the Middle East at 85.3 percent. Yet Saeed Al Muntafiq is claiming an average occupancy rate of about 96 percent??? Just another case of facts being distorted in tourism and real estate in Dubai. Surely I would think that a (hopefully) independant report by report by Deloitte & Touche would be accurate. How then could Saeed Al Muntafiq, a Chairman of Tatweer, be so out of touch with the actual occupancy rates in Dubai? Unless he's just blowing more hot air in an industry that is already based on smoke and mirrors with no substance.