ONE STEP AHEAD

Kuwait 2018 | CONSTRUCTION & REAL ESTATE | INTERVIEW

TBY talks to Ibrahim Al Soqabi, Group CEO of Al Mazaya Holding Company, on creating and implementing value-adding projects, always delivering on promises, and the value of middle-income housing projects.

 Ibrahim Al Soqabi
BIOGRAPHY
Ibrahim Al Soqabi holds a BS in civil engineering from George Washington University, an MBA from Maastricht University, and has participated in Executive Training Programs at Harvard Business School and INSEAD. He has 18 years of experience in civil engineering, project and construction management, risk analysis, enterprise and corporate governance, and compliance, and has been CEO for the past 10 years. Al Soqabi was successful in transforming a pioneering Kuwaiti contracting company into a holding entity (Kuwaiti Manager Company, a subsidiary of Kuwait Finance House) with a successful presence in Gulf Cooperation Council (GCC) states, Turkey, and Hong Kong.

How do you assess Al Mazaya's contribution to the development of Kuwait?

We started operating in 2004 and have always tried to bring something new to the market. Since the company's inception, we have developed a number of unique and distinguished projects. For example, we were the first company to deliver an entire building of clinics for a municipality featuring the best doctors and equipment. Since its inception, Al Mazaya has delivered more than USD3 billion worth of projects, while expanding internationally and working in eight countries over the last 10 years. In the UAE alone, our investments are worth around USD1.6 billion. These have been landmark projects, such as the first residential building in Dubai International Financial Centre (DIFC). We come up with projects that have an added value. We want to offer something special in every project. For example, our residential project in DIFC was fully furnished by Fendi, which made us the DIFC pioneers of premium furnished apartments. At the same time, Al Mazaya builds mid-range housing that meets our customers' design and payment requirements. We focus on what is important to the customer and enhance their experience.

Over the past few years, Al Mazaya has implemented a 10-step strategy. What does this strategy entail?

Al Mazaya works under a five-year strategy that is updated every year. We have a unique business model comprised of two main components: income-generating assets and health or trading assets. Income-generating assets are where we focus on covering our fixed expenses and creating a steady cash flow, whereas health or trading projects are where we make our major margins. Al Mazaya has outperformed the market, and for the past five years, we have maintained a compound annual growth rate of around 20%. One of the main goals under our strategy is to maintain a two-way relationship with our clients and governmental entities. For example, the Capital Markets Authority (CMA) named us one of the top-10 companies to deliver its requirements. We have our systems ready before it even asks and aim to be as transparent as possible with information. This has inspired trust between us, our clients, and other stakeholders in the real estate sector. We capitalize on this by issuing reports every year from two independent research companies. Although we are not required to do so, we have also taken the initiative to obtain a company-wide equity-credit rating from Capital Intelligence. We have always been a trustworthy company that delivers what it promises. Al Mazaya is a dual-listed company, in Kuwait and Dubai, and we work with regulators in both. Being listed in our local markets gives us more credibility, though we do not seek investors as we have enough working capital already. Our relationship with banks and our portfolio are great. We are always pursuing a situation in which not only the investors and Al Mazaya make money, but also the third party buying for us.

In which markets do you see potential for Al Mazaya to unlock new growth opportunities?

Al Mazaya works in every GCC country, though our main markets in terms of asset allocation are Dubai and Kuwait. In 2017 we also launched Phase I of a middle-income residential project of around 300 units in Oman. We sold 20% of those units within the first few months and have launched Phase II because sales have been so successful. Turkey was part of our growth plan, and sales there have gone well. We have sold around 90% of the units, while 70% of the mall is rented. We are pleased with our experience in Turkey, although we faced many challenges there. In Dubai, we launched four new middle-income projects. I personally prefer middle-income housing projects because the units are affordable enough for living or investment purposes. About five years ago everyone was doing high-end luxury projects in Dubai; however, we focused on middle-income, and this paid off well. Al Mazaya is now an established brand in the region.