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Mohamed Khalifa Al Mubarak, chairman of Aldar Properties on future of joint activities between real estate giants

A merger between UAE property giants Aldar and Emmar is not on the table, according to Mohamed Khalifa Al Mubarak, chairman of Aldar Properties.

Last month the developers announced a strategic alliance to develop $8bn (AED30bn) worth of projects, initially in Abu Dhabi and Dubai.

In a CNBC interview this morning, Al Mubarak said: “We want to first cement this JV… We want to finish these developments, at the highest quality we can, at the timeframe we announced, and share it with the people, and then we can discuss what the future can hold for both these entities.”

The agreement, signed by Al Mubarak and Emaar chairman Mohamed Alabbar, will see the developers initially collaborate on two UAE-based projects: Saadiyat Grove on Abu Dhabi’s Saadiyat Island, and the Emaar Beachfront project, located between Jumeirah Beach Residence and Palm Jumeirah.

Al Mubarak said of the strategy: “You eventually always outgrow your market. And as we’ve last seen, over the last several months with the announcement of the joint venture with Emaar – that is specifically focused on how we can bring in brand new clientele to Abu Dhabi. At the same time, how we can expand to Dubai and other areas where Emaar are available… I think what you get with Emaar is a fantastic track record in developing unbelievable projects.”

Al Mubarak acknowledged that 2017 saw a “difficult real estate market around the world,” but said that the company’s gross profit was “about AED2.7bn” with recurring revenue of AED1.6bn and off-market sales of AED2.5bn.

Abu Dhabi, he continued, “is still quite early in bringing international investors in the realm of real estate. But, the opportunities are quite vast. Our real estate laws continue to get stronger. The locations that we have that Aldar has are really second to none.”

He was also bullish on the UAE capital’s economic development telling CNBC: “I think it’s been clear from day one that we want to diversify from oil. And that’s been the strategy of Abu Dhabi. And you can hence see the investments – whether it’s in Medicare, in renewable energy, in culture, and infrastructure both hard and soft, space, infrastructure, and the list goes on. All these create jobs, all these create opportunities.”

Source: http://www.arabianbusiness.com/news/394330-aldar-emaar-merger-ruled-out-for-now

Lebanon is hiring management consulting firm McKinsey & Co. to help restructure an economy that’s overly reliant on remittances and banking, and grappling with high unemployment, Economy and Trade Minister Raed Khoury said.

The six-month agreement with McKinsey will be signed by the end of this week and the company will start work next week with various ministries and economic bodies to formulate a new economic vision for the Arab world’s most indebted nation, Khoury said in an interview at his office in Beirut on Monday.

“The government has been historically nearly absent in putting policies and procedures to do that,” said the former Barclays Wealth banker and founder of Cedrus Invest Bank. “The first thing we want to do is to identify our economic identity and then go to more specific things.”

With at least three times as many Lebanese living abroad than in Lebanon, the country has been sustained by remittances that have kept flowing in, especially from Lebanese workers in Gulf and African countries.

Banks use the money to buy government debt, which stands at 150 percent of economic output, according to Khoury. That is one of the world’s highest ratios, along with Japan and Greece.

Record Reserves
With foreign reserves at a record $43 billion, the Lebanese currency has been able to survive the political storms that have at various times left Lebanon without a president or prime minister, and the influx of 1.5 million Syrian refugees who have strained its resources.

But this model is “becoming very risky” and no longer sustainable, Khoury said, predicting that if nothing is done, the debt-to-GDP ratio will go as high as 170 percent in the next few years. He said Lebanon should aspire to emulate the economy of Singapore, another small country with many ethnic groups.

Lebanon’s governance has suffered from the legacy of the 1975-1990 civil war, and the country didn’t have a budget for 12 years until parliament passed one in 2017. Even now, with discussions under way over the new budget, not much thought is being given to the impact that decisions, such as imposing taxes, will have on various sectors, he said.

“We’re doing the budget for 2018, you think there is a mentality of a 3-year, 5-year, 10-year plan behind it? Zero,” he said. “It’s not chaos, it’s a culture.”

‘Tricky’
David Butter, associate fellow at Chatham House in London, said such strategic plans “might not do any harm, but in the case of Lebanon it’s a bit more tricky.” McKinsey will have to analyze and quantify various areas including services, financial flows and parallel economies such as the one controlled by the Iranian-backed Hezbollah group, which are hard to quantify, he said.

“You have a lot of gray areas which might be difficult to put into the context of some sort of a strategic plan,” Butter added.

The minister also said overall unemployment in 2014 stood at 24 percent, with rising youth unemployment exceeding 35 percent, the last year for which figures are available at the ministry. Lebanon’s trade deficit was $11.77 billion by September 2017, with exports at $2.12 billion and imports at $13.89 billion.

These figures show that Lebanon has no choice but to restructure its economy, said Khoury. “It’s not a luxury anymore,” he said.

Source:http://www.libc.net/2018/01/12/lebanon-hires-mckinsey-to-help-revamp-the-economy/