The Business Year

Makarem S. Batterjee

SAUDI ARABIA - Economy

Group Theory

President, Shababco Enterprises and The New City Company

Bio

Makarem S. Batterjee attended California State University and graduated in 2003 with a Bachelor’s of Science in Health Services Administration before acquiring an Executive MBA from London Business School in 2011. He has had a long career in a number of companies, including Solomon Smith Barney Investment Corporation and Ernst & Young Consulting Advisory Services. Presently, he is President of Shababco Enterprises and The New City Company and Vice-President of Saudi German Hospital Group & Bait Al Batterjee Medical Co.

What has allowed the group to not only grow, but diversify in parallel with the growth of the Saudi Arabian economy? The group’s main business is healthcare and real estate. […]

What has allowed the group to not only grow, but diversify in parallel with the growth of the Saudi Arabian economy?

The group’s main business is healthcare and real estate. One of our companies is the largest healthcare provider in the region, Saudi German Hospital. We are a growing organization, and have operations in the UAE, Yemen, and Egypt. We have 10 hospitals currently, and 10 more under construction. Therefore, we are growing our brand in other countries as well as other territories in Saudi Arabia. We are aligning the vision of the company with the boom here in Saudi Arabia. We are actually the only company that is using the word Saudi outside of Saudi Arabia. Meaning, if you go to Dubai, our company is called Saudi German Hospital. Many Saudis are proud to see our company’s name used outside the Kingdom.

In terms of healthcare and real estate, what has made you continue to focus on these two core pieces of the business?

These are defense industries; they are recession-proof. It has been the strategy of the family to maintain these core industries because of the stability they provide. We are also focusing on education now. We have started the largest private medical university in the Middle East in Jeddah. It is a huge project worth around $150 million.

What are your expectations for the short- and medium-term evolution of the housing market?

It is a huge opportunity for investors. However, I do not think it will last for a long time. The demand is high, and supply is catching up. Many business people are realizing the opportunity and coming in. It is a great time to invest now, but many people are not sure of the opportunities down the line in maybe five years as real estate is cyclical. Already, the banks are getting financing and they are giving it on 20- to 30-year terms. Of course, it is not as advanced as the mortgage sphere in the US, for example, but you can use a mortgage for other things, such as education. It is not that flexible, but many housing loans do exist today. Another concern now is the upcoming tax on property law. I am not so sure that will happen but we have to be optimistic.

What are the goals of Shababco, your lifestyle company?

Shababco is a subsidiary of the group, and we are proud to have it. It is a company dedicated to the youth and women especially. We started that by entering the fitness industry, as we were already a captain in healthcare. Just as we got into education and helping the sector in the country, we also felt the duty of getting into health and fitness as a preventive care element. Saudi Arabia has one of the highest percentage rates for obesity and diabetes in the world. One of the reasons for this is because it’s a hot climate, which limits your ability to go out and walk, run, and do sport—especially for women. Therefore, we felt fitness is a great solution not only to help the health of people, but also to provide sharia-compliant entertainment for the new generations. We brought in a leading franchise from the US, and now we have the largest sports gym in the world here in Jeddah. We have 10 clubs today, and our vision is to expand the chain to 200 branches across Saudi Arabia and Turkey. We started the first women-only gyms in Saudi Arabia. We have the only gym chain that is physiotherapy driven, as we wanted our gyms to have a medical emphasis and an advanced element to them. We are also the first to launch chiropractic service in Saudi Arabia. We pioneered the women’s health and medical gym business. We are proud of this as it is really elevating the lifestyle of women here and it is considered gone of the pinnacle investments of the family as far as society wellbeing impact shift.

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