Khalaf Al Habtoor sat down with representatives from leading international publications on 10 April 2018 to share his view on the UAE economy, political and economic reform in Saudi Arabia, and failed US policies that have compounded the threat from Iran. The Chairman shares that Al Habtoor Group IPO is still under consideration and the Group is looking at further expansion abroad.
Khalaf Ahmad Al Habtoor, Founding Chairman, Al Habtoor Group talked with international correspondents and journalists at a breakfast briefing organized by the UAE Embassy in Berlin on a private visit to Germany on Monday 10 April 2018. Presiding over the open platform of discussion was His Excellency Ali Abdullah Al Ahmad, Ambassador of the UAE to Germany. Also present was Brian Parkin, Bloomberg political analyst; Thomas Escritt, Senior Correspondent, Thompson Reuters (Markets); Mathias Brüggmann, Head of Foreign Affairs Desk at Germany’s business daily newspaper Handelsblatt; Christian Gschwendtner, Political Scientist and Journalist at Süddeutsche Zeitung, one of the largest daily newspapers in Germany; Wolfgang Hirn, Reporter at Manager Magazin, a German monthly business magazine focusing on business, finance and management; and Richard Diesing, Freelance journalist reporting on current affairs for Germany’s weekly business news magazine Wirtschaftswoche.
They discussed a range of topics including Al Habtoor’s investment strategy, Middle East politics, Saudi reform tourism, global economy, terrorism and Al Habtoor’s views on US President Donald Trump who Al Habtoor said is “always going to be making quick decisions,” which don’t benefit anybody, particularly the Americans. [‘Donald Trump and International Trade with Asia’ starting min 24:19]
Al Habtoor told the group about the benefits of investing in the United Arab Emirates. “The UAE is the safe haven of the world,” he said. “People from all over the world come to live and work, and even retire in my country. The UAE offers a welcoming, safe and secure environment to anyone irrespective of race and religion. This is the secret of our success.”
When asked about the impact of any external pressures on the UAE, Al Habtoor said, “The UAE is resilient. We are unlike anywhere else in the region because the people of the country work hand in hand with the government. We are partners with the leaders to ensure our success.” [‘Success story of the UAE’ starting min 09:08]
Al Habtoor acknowledged that 2017 was a tough year in the UAE but said that 2018 is proving to be much better for business, “In 2017 the business climate wasn’t that great, like 2016, however, since January 2018 there has been significant growth and we believe that progress will continue.” He added, that his strategy of diversification is important to weather any turbulence “that way one company can carry another when there is pressure,” he said. [‘UAE business environment’ starting min 11:07]
The Chairman gave his view on the influx of construction in the UAE, particularly in the hospitality and real estate, and warned against irresponsible lending from banks. “I don’t encourage building unless a proper feasibility study has been conducted to ascertain the level of risk. I caution against banks’ lending without conducting due diligence first.” [‘Real Estate and Construction in the UAE’ starting min 17:35]
He said that when he embarks on a new project he conducts careful planning to guarantee its success. He gave the example of what is possible in Dubai with the successful launch of Al Habtoor City and The Al Habtoor Polo Resort & Club. “Dubai doesn’t need any more real estate developments. It needs more projects like these to attract more people.” [‘Demand for new projects in the UAE’ starting min 19:12]
Al Habtoor said that he rarely works with international banks nowadays, and says he prioritizes working with local banks in the UAE, “Unfortunately, international banks no longer provide the quality they used to as local banks are becoming very strong in comparison.” He added that global banking and financial crises have led to UAE banks putting measures in place to better protect customers, resulting in superior strategies and stronger business models than their international peers. [‘Strength of the UAE banking sector’ starting min 36:34]
Al Habtoor said he will refrain from further expansion in the UAE for the time being given the Al Habtoor Group’s rapid expansion over the past few years. “We are taking time to breathe in the UAE to finish our existing project. I am always open to investment opportunities abroad.” He said the Group will only consider international assets in the hospitality and commercial real estate sector. He said the Group’s strategy is to reinject profits back into the business to maintain the Group’s growth trajectory. [‘Expansion plans for the Al Habtoor Group’ starting min 07:24]
He stressed the importance of continuation and succession planning, adding that an Initial Public Offering (IPO) is still under consideration. “The idea of taking the Al Habtoor Group public remains a possibility in the future,” he said. “Maybe after 2020 we will consider it again.” [‘Al Habtoor Group and consideration of future IPO’ starting min 38:46]
He said he is very happy with his investments in Hungary where he owns two hotels and two commercial buildings, including The Ritz-Carlton Budapest and The InterContinental Budapest. [‘Al Habtoor Group and foreign investment’ starting min 30:46] When asked about Saudi Arabia’s plans to boost tourism and how the Kingdom’s 2030 vision could impact the UAE Al Habtoor said, “We are happy for Saudi Arabia to expand. I wish them the best of luck. I think the young leadership is doing a great job,” He added, “The UAE is different to Saudi Arabia. We have had the foundations in place for a long time thanks to our fathers and forefathers, and our visionary leaders. I think it will take a long time for Saudi Arabia to build their vision, so there will be no negative impact on the Emirates.” [‘On reform in Saudi Arabia’ starting min 02:18]
His Excellency Ali Abdullah Al Ahmad, Ambassador of the UAE to Germany highlighted that the UAE is witnessing record numbers of tourists. “Last year the UAE welcomed 21 million tourists. Almost two-third went to Dubai.” He added, “German tourists were about 750,000. It is a fastgrowing destination and the good news is that many of those tourists are repeat visitors.” [‘On growth of the tourism sector in the UAE’ starting min 23:25]
Al Habtoor invited the attending media to come to Dubai to see it with their own eyes, and not base their information on hearsay. He highlighted that the UAE is an advanced country that is always evolving, particularly Dubai. He said that tourists have so many options to choose from. He used the example of the city’s burgeoning arts and cultural scene. “It is not just about nice hotels and beaches. The UAE is full of culture. We have expanded The Arts in recent years… we have museums, world-class theatre, and the Opera.” [‘On Dubai’s as a global entertainment and leisure destination’ starting min 1:00:23]
On the topic of terrorism, Al Habtoor emphasized that Iran is the biggest threat to the world today. “Iran is supporting terrorism all over the world. It controls Iraq, Lebanon, Syria and Yemen. Four countries. This is a gift from the Americans, Mr. Obama and George W Bush. Iraq, the cradle of civilization, has been gifted unfortunately and given to people who are pro-Iranian who are ruling the country.”