How does RSG position itself in the Dubai real estate market, and what is its growth strategy?
After acquiring some property in Dubai in 1996 and making excellent returns, I wrapped up operations in Kuwait in 2006 and moved to Dubai. The philosophy behind RSG is to go against the market trend: when people sell, as was the case in 2008-2009, we like to buy, and vice versa. With the support of all the team members, RSG continues to win new tenders at a time when the market is silent again, as people have stopped building, even if they are just at the initial phase of their construction project. Step by step, we focus on one project at a time. We are currently building a residential tower in Jumeirah Village Circle and were recently awarded a USD126-million contract for a five-star hotel and hotel apartments project on Sheikh Zayed Road; and a four-star hotel is in the pipeline. The level of service is extremely high in Dubai. For example, in the hospitality industry, a three-star hotel in Dubai is equivalent to a five-star hotel in Europe. This is why RSG Group is more focused on the hospitality sector. On the contracting side, we only work with big local names. The level of integration one gets from locals who are familiar with the culture and way of doing business here cannot be matched by overseas contractors. It is also a matter of reputation; a foreign company can always leave if things go bad, while a local one cannot afford to let clients down.
What are the key features of the Dubai market that make it an attractive place to develop and invest in new projects?
Due to policies being undertaken by the government, major FDI inflows over the coming years will help the private sector grow even more. We are getting ready for the next boom, though it will not be necessarily tied to Expo 2020. Dubai's leadership will always have something in mind to bring investments, so one should look at the economic cycle with optimism. The strength in this city is unmatched; Dubai cannot fall. The government and the construction industry are not taking a pause, more so because Dubai is a safe place to be compared to neighboring countries. In other places, rules and regulations tend to be old style, slowing down approvals; here, everything is digital, and the infrastructure and the ways the local authorities communicate are extremely efficient and well connected. Overall, it is a professional and business-friendly environment, with a great mix and acceptance of other cultures.
Given your optimistic sentiment toward the Dubai market, is the Emirate almost risk free?
An optimistic sentiment does not mean that there are no risks. There are risks, but they come with leverage: playing with banks' money is hardly a safe choice, and developers should adjust accordingly, without overdoing and overextending themselves. As such, one can reason this to be successful in the Dubai real estate market. Equally important is to have experience and an excellent cash flow. One option is to start as an investor and buy and sell units to build up a healthy fund. Starting as a developer in Dubai is extremely risky. Instead of gaining fast returns, the goal should be to have a well-planned, phased, and balanced growth that does not stretch too far in any one direction. This is why it is advisable to go with government entities; although their ROIs are spread across a longer period of time, they will never crash.