Face to face: Abdulla Al Gurg
Easa Saleh Al Gurg Group general manager Abdulla Al Gurg says the firm will not deviate from its low-key approach to real estate development as it builds up its UAE and UK portfolios. Yamurai Zendera reports.
For a UAE family business spanning over five decades, the eponymous Easa Saleh Al Gurg Group likes to keep things quiet.
The admission comes from general manager Abdulla Al Gurg, who is the grandson of founder and former ambassador to the UK and the Republic of Ireland, Easa Saleh Al Gurg. Today, the Group has grown into a multi-divisional conglomerate with 24 companies.
When it comes to Al Gurg Real Estate, which owns assets in the UAE and the UK, Al Gurg said the modus operandi has always been to “grow organically and slowly” according to the principles laid down by his grandfather.
“We have never sold a property in our lives, we have never traded a property in our lives, we have never leveraged a property in our lives. We develop and hold.” he said. “We’re low profile, you wouldn’t know that we are there, and that’s how our family positioning has been.”
The company doesn’t go in for the “flashy projects” and broadly aims to add at least two properties to its portfolio every year. Its holdings encompass office, retail, industrial and residential properties in prime areas like Dubai’s Deira Creek, Mankhool, Jumeirah and Karama.
“We’re not in the development business, we’re in the asset development business and wealth creation,” said Al Gurg. “We don’t do those flashy things. We let the flashy people do that. We’re realistic people. We’re very focused on the ground.”
The priority for this year has been the development of two UAE projects which are due for completion in 2017. One is a twin tower scheme in Abu Dhabi and the other is a residential and commercial buildings in Dubai’s Bur Dubai area.
“Every one of them is in a different phase but predominantly I see them as design development and getting into the tendering phase,” Al Gurg told Construction Week.
One of the projects will see what was once the Al Gurg’s family home near the Gold Souk in Deira turned into a residential/commercial building.
“They (Dubai Municipality) wanted to turn it into a museum but we decided to construct, in a local authentic way that respects the traditions of Dubai, a residential building with the lower part for commercial use,” said Al Gurg.
The real estate business also has a number of Dubai projects in the pipeline including a residential/commercial building in Al Nahda, a residential/commercial building in Al Mamzar, villas in Mirdif, an open shed in Al Gouz and a factory in Jebel Ali.
“Our business requires warehousing, our business requires staff accommodation. We serve predominantly what our business requires – so we build on a needs basis, but sometimes we also build residential which is outside the needs basis like say in Mirdif,” said Al Gurg. “We see value in the area and it doesn’t need to be for our staff – but predominantly we build for the entire spectrum of the market.”
A number of acquisitions have also been made in recent times to the property portfolio. These include a showroom in Ras Al Khaimah that will be used for the Group’s furniture business and more notably, the IBM building in London’s South Bank district from Sir Alan Sugar.
“We are looking at acquiring other properties in the near future. It doesn’t need to be high income. We view those assets as an indirect fixed deposit in the bank,” said Al Gurg. “The asset value is only going to enhance because we will buy and hold. We do it in a gradual, sustainable, organic way.”
Al Gurg said the UAE residential market is in a healthy position with even more property expected to come online throughout the course of the year. He describes 2014 as the “end of the depression”.
“I see 2015 being better than 2014 and 2016 being better than 2015,” he said. “I think the prices will go up. I can’t predict what will happen in 2017/18, but I see 2015/16 being two positive years for the real estate market here.
“There’s lots of investment, the government is investing a lot in infrastructure – and those projects that were announced a year or two ago are now coming to life. From our point of view, we’re seeing a lot of that tendered and we are starting to participate.”
The firm is also looking to seize upon opportunities presented by Dubai’s hosting of the World Expo in 2020, with a warehousing project near the Expo site in Jebel Ali under consideration.
“We’re looking at evaluating our business demands to be a bit more approximate to Al Maktoum International Airport and the Expo site; and we’re also putting the Dubai future zoning into perspective because a lot of our warehousing is in the old parts of Dubai and we have to react in advance to be part and parcel of the future of 2020.”
During the economic downturn that took hold from 2008/09, Al Gurg said the business continued with its real estate projects. An example of this was Al Gurg Tower 3 – a residential/commercial building near Dubai Creek that was constructed in 2011.
“My grandfather said do not stop construction. We continued,” said Al Gurg. “If I interconnect our other business interests with the real estate business there wasn’t much of an impact. For example, we’re also a subcontractor, so all the things a contractor needs, they buy from us, like mesh, manhole covers, white goods etc. We get that payment in advance,” he added.
“We were patient with our real estate. Four years ago it took a year-and-a-half to two years to rent out Al Gurg Tower 3, but it picked up. Now we have zero vacancies.”
Al Gurg praises the strides Dubai has made to regulate its real estate market post 2008/09, but said he would like to see greater cooperation between government and private developers to find common ground on pricing and zoning.
“From a local perspective, I think developments like Dubai Canal, Citywalk, Mohammed Bin Rashid City, Mall of the World etc are a good thing. It’s only going to attract more people to come and live in this part of the world,” he said.
“There is competition currently between the private and public sectors. I don’t know if it’s healthy. There needs to be some sort of regulation which says let’s look at this, maybe zoning or maybe pricing – we need to be creative. For example, the pricing of rent so that the customer has the option or choice, here or there. Some sort of stability and not huge discrepancies in the market.
Under the spotlight
Abdulla Al Gurg represents the third generation of the family which has been in business for over five decades. The Group’s diverse product and business interests predominantly include retail, building and construction, industrial and joint ventures.
Under his tenure the Group has expanded its footprint in the GCC region; in the Sultanate of Oman, Qatar and the Kingdom of Saudi Arabia. Al Gurg has also been instrumental leading the activation of a Treasury Management System, helping establish the first in-house bank in the GCC region. He is also an active Board member within the Group’s joint ventures, namely Al Gurg Fosroc LLC, Siemens LLC, Arabian Explosives, Al Gurg Smollan and Al Gurg Unilever.
Al Gurg is a member of the board of directors of the Easa Saleh Al Gurg Charity Foundation. In recognition of the foundation‘s charitable efforts, he was the Lloyds TSB Torchbearer for the London 2012 Olympic Torch Relay.