Rising high

Dr Sulaiman Al Fahim, CEO, Hydra Properties: "A vision without action is a daydream, but action without a vision is a nightmare.”

Hydra Properties is a shining Middle East success story. Only formed in 2006, it has already signed projects worth over US$2 billion and cemented its position one of the region’s fastest growing companies. Based in Abu Dhabi, Hydra is the brainchild of CEO Dr Sulaiman Al Fahim. Barely into his thirties, Dr Al Fahim has quickly built up quite a reputation as a business leader, collecting the Visionary honour at the Arabian Business Awards in 2007. Aiming to bring individuality and innovation to every single Hydra project, the CEO is a man with big plans. BM was lucky enough to sit down with him and find out what was in store.

BM. You have recently launched your first international development, Hydra Waves in Mexico. Why have you decided to move into other markets and why did you select Mexico specifically? Does developing abroad present different challenges to working closer to home?
SAF. Hydra Properties is proud that news of launching its first international development has got the coverage it deserves. The project was a landmark in Hydra’s transformation from a local UAE company into an international player in the area of real estate development. Launching Hydra Waves took considerable efforts from the Hydra teams, both at the home, at our UAE headquarters and on the ground in Mexico.

Launching Hydra Waves was part of Hydra Properties strategy for expansion on the international level. After accomplishing a great deal in the UAE, which itself is going through a real estate or construction boom, it was time for the company to expand internationally.

Business considerations dictated that we develop property outside UAE. Capital, as you know, will be attracted to areas where stability, security and growth potential exist.

Businesses should be ready to exploit every possible opportunity. That’s why we see investments by big names in the Levant, North Africa, other GCC states, The Indian Sub-continent and elsewhere.

We gave intense consideration to investing in Mexico, a territory that might seem extremely far away from our base in the Middle East. Mexico is the second largest foreign direct investment recipient among developing countries. Foreign direct investment in Mexico between 1995 and 2002 surpassed US$119 billion.

Mexico has a strategic geographic location with direct “just in time” access to the North American market, with access to world-class inputs and technology. Mexico also benefits from the largest network of Free Trade Agreements, which grants preferential access to markets in North America, Western Europe and to 10 emerging markets in Latin America. It also boasts a skilled and competitive labour force.

In the last years Mexico has implemented reforms on its Foreign Investment Law and has subscribed to several Free Trade Agreements, Bilateral Investment For us, it turned out that the best investments in Mexico are in hotels and real estate development, on naturally attractive areas that are considered major tourist destinations.

Developing anywhere holds challenges, and there are always positives and negative sides to any situation. Ultimately, success will be dependent on picking the right choices, making the best of relevant opportunities and standing up to challenges.

BM. You see foreign investment as being a vital component in Hydra’s continued success. Why is this? Are you concerned about the effect a predicted global economic downturn could have on the business?
SAF. We envision expansion in many parts of the world. After laying foot in Mexico, the company looks to expand also in the USA, Costa Rica and Brazil. The company is also eyeing investments in the Asia Pacific region. Estimates indicate that the company's international investment will amount to as much as 90 percent of its budget in the near future.

Any successful business tries to diversify its assets. You see blue chip names like IBM, Chevron and Bank of America investing in exchange traded funds that deal in green energy. Others who are pioneers in their own area of business try to get out of the box, and exploit opportunities in other sectors. We are currently focused on property development, therefore we are seeking expansion in geographies rather than sectors.

As to the risks of a global crisis that will strike many economies in the world, all indicators show that the Middle East will be least affected by the problem. If we are talking about the repercussions of the secondary market crisis on other economies, there are risks for sure, but certain experts have pointed out that if present s opportunity too. The markets will come back, it may well take some time but they will come back, perhaps even stronger than before".

What could be said here is that no investment is risk free! As far as the current crisis is concerned, the general feeling is that our area will not be seriously affected by it.

BM. The company was only established in 2006 and yet you are already one of the regions fastest growing companies, with many high-profile projects underway. How have you achieved such a rapid growth and are you confident that you can make it continue?
SAF. Before engaging in any activity, understanding what you are embarking on and giving enough consideration for all of its aspects is crucial. I have been involved in real estate business since I was 18 years old, as it was one line of business my family was conducting. I gained considerable experience on the local real estate market, and saw potentials realized on the ground. I have experienced the change of the UAE real estate market, and its transformation from being a market only accessible nationals of the country to one which is now opening wide for investors form all around the world.

In addition to the hands on experience I have gained, I pursued my higher studies in the US, in a real estate finance field that is very close to what I know best. Returning home, the idea of establishing Hydra Properties was very much my in thoughts. The plan was to combine my local exposure to the industry with studies in a field that augmented that experience and at the same time gave a window on what is happening on the global real estate scene.

I mention those reasons because they aided greatly in the company's advancement and growth over the relatively short period of time since its inception. The vision of the company played a significant role in its fast growth. Our vision is that we are not only adding more buildings in this construction rush, but developments that have a peculiarity, and a character, making them stand out in the crowd.

As with any other successful venture, the right resources were pulled together to work with a vision of building. So we gathered the best experiences in design, construction, management, marketing, and the whole team was moving ahead to fulfil one goal: build so that people enjoy living on our properties.

And I am sure this will be sustained, because the team we have built is a wonderful one. It adds creative touches to every new project we undertake, especially the ones that accentuate their authenticity and suitability their chosen location. Our current team understands the need to address our vision for property, and executes along those lines.

BM. What are the realities of doing business in both the UAE and across the Middle East region? Are there particular advantages to operating there and are there any major difficulties that you would like to see resolved?
SAF. Every type of business, wherever it is practiced, will have advantages and disadvantages. That is a fact of life. But the UAE in particular and the Middle East in general, are areas of high growth potential. That is just as true in other sectors, and is not limited just to real estate development. For instance, the area is characterized by its young population, therefore the adoption of new technologies developed in the ICT sector will have great potential for IT and technology vendors. UAE and the GCC area are also areas with high-income levels, therefore vendors of high end and luxury items have a good opportunity to do business here.

As far as real estate development is concerned, there is a significant demand on residential and commercial property. This is to satisfy the needs of a population that is growing extremely rapidly, due both to a high birth rate and the flood of an expatriate community that is looking to get involved in the region’s growth.

BM. Do you think the recently established GCC common market will have an effect on your business? What are the long-term benefits of the move likely to be?
SAF. Establishing the GCC common market is a happy event for all GCC citizens. The market will bring in more prosperity and opportunities to the markets and will also establish further stability in the long run. This move has been long anticipated by citizens of the GCC, and I’m very glad that the moment has eventually arrived.

Although trade barriers do not really exist between GCC countries, and there is a situation similar to a common market status, the new decision will facilitate further economic growth in the area. The movement of commodities will be facilitated further, so that if there is a shortage in cement in a certain market, for instance, market forces will work to retain equilibrium in a manner that will benefit all segments.

The same thing applies to capital, other commodities, the utilization of ports and transportation systems, labor movement and so on. With the common market in place, we expect this area to achieve higher economic growth, stabilize prices, reduce unemployment rates and improve competitiveness among regional businesses in all sectors.

BM. Do you employ large numbers of foreign workers or do you make an effort to recruit from within your own borders? Are you in any way worried about the region’s reliance on foreign labour?
SAF. Hydra Properties is keen to recruit talented, experienced, and energetic people regardless of where they come from.
   
BM. Your projects are all undertaken with an eye on environment and sustainability. Why are these concerns so important, both for the company and for the region as a whole? 
SAF. These concerns are not only particular to this region. They are new guidelines adopted on a global level. With escalating energy prices, increased fear of inducing damage to the environment and the need to provide a healthy and comfortable environment where people can live, these issues have gained significant importance in recent years.

You may be familiar with the new Leadership in Energy and Environmental Design certification. LEED encourages and accelerates global adoption of sustainable green building and development practices through the creation and implementation of universally understood and accepted tools and performance criteria.
 
So if creating ‘green’ buildings and maintaining a sense of the environment is important in other parts of the world, it should be crucial for our area. With the prevailing climatic conditions, energy saving becomes a must, as does proper heat insulation and the provision of green areas.

Hydra Properties has taken developing eco-friendly properties as part of its vision, taking into account all criteria that guarantee our developments satisfy environmental needs.

Prime time
Hydra’s interests don’t end at property development. They have recently been involved with ‘Hydra Executives’, a television program that seeks to unearth the next generation of business leaders. This is the first time a Middle Eastern company has undertaken such a project. Dr Al Fahim explains:

“The very idea of the show is something new. Similar shows have been produced before, but this is the first one specifically centered around real estate development, design, marketing, and so on. Sponsoring the reality show is conceived as an approach to reach out to people in different parts of the world, stimulate them to come up with creative and innovative ideas that could be used and implemented in real time.

The competition is a mental exercise. It is targeted at having people with different cultural backgrounds prepare executable ideas in an environment that is unfamiliar to them. Using their creativity and experience I am sure we will generate some innovative ideas. It should make for an interesting contest as well as providing great benefits to the winner and other participants through allowing them to see there dreams come true.

It is a TV show, but it is rooted in reality. Contestants will have the chance to experience a new environment, where a construction boom is happening, and where their ambitions can become real projects on the ground in Abu Dhabi, the land of opportunities.”

Dr Al Fahim’s three vital questions for business success:
Where do you stand?
Where do you want to go?
How do you arrive at your destination?