Abu Dhabi Metropolis of the Future

Gentlemen, thank you so much for joining me today on this first panel discussion uh to a wide crowd during Abu Dhabi finance week. We're going to kickstart this conversation and as the MC has suggested this panel is going to be going through elements of livability, culture and economic growth that Monica had just spoken about in her presentation. Yousef perhaps starting with you I want to

direct a question.

Okay. The feedback is really bad.

Oh so we're having a little bit of technical difficulty. But your mic should be right next to you um for you to speak through.

Yes.

There you go.

So the first question that I want to direct to you is uh about Lulu and essentially you've just listed over a year ago.

Sorry, excuse me. I'm not uh

so we're getting a little bit of again

I don't know whether you are

Can everyone else hear me on the stage? Okay, great.

Yeah, I'll repeat.

Sal, are you able to hear?

Yes, I'll repeat.

Okay, maybe you can get the questions through. So, Yousef, we're going to talk about the fact that Lulu has listed on the ADX over a year ago at this point. So as the chairman of a listed company now in Abu Dhabi, I want to know how your life has changed a little bit since listing.

First of all, thank you very much for inviting. I'm honored to be here today this August distinguished panel. See we are here since 52 years and in 1966 my late father my late uncle started our business and I joined 1973 December. First of all this is a great country particular UAE and particularly in Abu Dhabi. We see the transformations, the upgradations, the new new things happened in this great city country Abu Dhabi.

We have got a strong foundation laid by Allah, Lady Susan. The foundation is strong. And now an investor perspective. What an investor need? Number one, a strong and visionary leadership.

We have got his highness Sheikh Muhammad bin Z al- Nah and president of this great country. We have got our crown prince his highness sheh bin Mohammed bin Z al- Nah. So visionary leadership second strong economy we see the petrol price came 30 40 80 120 so all this scenario we sawing but our economy Abu Dhabi is very strong economy is going on second third the infrastructure of this country Abu Dhabi's infrastructure is the and the safest place in the world. You can see in the last uh the information that we received from the international agencies that Abu Dhabi is the safest city one of the safest city in the world. M

so this is the four scenario with leadership economy infrastructure and now the new things that is we have got culture and secularism

right

the biggest temple in the Middle East is in Abu Dhabi churches mosques so the secularism let an investor see what The perspective of this place

right

is 100% secularism that also there and ease of doing business under the leadership of his highness. There is a lot of laws changed and digital transformation artificial intelligence integrated cultural district started history is there. Now people are talking about artificial intelligence and also digitalization robotic. We got history also Abu Dhabi in Abu Dhabi you can see the museums you can see including the local museum

and we'll we'll get back to you know we'll get back to talking about the environment in Abu Dhabi and everything you just alluded to but Talal perhaps moving on to you and uh you know briefly you had an announcement this morning about an expansion but you know I want you to talk about that but then I guess the second part of my question is when I was preparing for this panel, a big element that came through is when it comes to livability, affordability is a big element when it comes to housing. Now, Abu Dhabi has been attracting a lot of people from all around the world over the past few years and a big element of expenditure is housing affordability. So, how do you tackle that? Edar,

thank you and thank you to all the esteemed guests on and the organizers on this incredible event and esteemed panel. So in your first question, um Air, we're a proud offshoot of Mubadella. We're 20 years old. They remain one of our largest shareholders and backers. Um this is a series of partnerships that we've had with Moubadela.

Starting uh the last four years, we acquired ADGM, the office complex over here. We announced a series of joint ventures um last year. Last week we announced the formation of Aldar Capital with Mubad Capital. Uh that's going to be the region's uh one of the region's first real assets uh investment manager to bridge the gap between global capital that wants to come in and invest in Abu Dhabi. the remarks that we heard from his excellency Kaldun um this morning.

Um and just this morning we announced a further partnership with Mubada to develop North Al Maria. Um so as you're walking out and facing uh the Galleria Mall, everything towards your right hand side or behind active sports. uh it's a 60 billion darham uh development that will phase the next phase of growth in terms of commercial office space residential and branded residential hospitality the convention center worldclass infrastructure and and amenities um and this fits within Abuabi's urban framework the same framework that started in 2008 announcing the 2030 vision and now we're planning for the next decade or two on your second question as Abuhabi is expanding across all of these key sectors, financial sector, the culture, the entertainment, aviation, logistics, and so on. Affordability is a big deal,

and we're partnering and working very closely with the state represented by the Department of Municipalities and Transport to tackle this topic. Um, but not to tackle affordable housing, to tackle affordable lifestyle. uh what we don't want to have is housing in an area where they're underserved in terms of their retail, health care, education or transport. So I think part of Abu Dhabi's vision as we do it with everything as we saw yesterday with an incredible event at at the Formula 1, it's about an integrated community lifestyle development. So even in the affordable segment, it's important that we bring all of those aspects together and that is going to be one of the biggest areas of growth for our capital as well as third cap third party capital to invest in that theme over the next five years.

How moving on to you and I'm going by order here. Um covering banks is a big part of what we do at Bloomberg. Um you know Abu Dhabi Islamic Bank has had a pretty robust third quarter 14% up on profits. It's a similar story to UAE banks that are quite liquid, especially when compared to regional peers. But in your position at the bank and from the ecosystem that you're witnessing, what do you think is the role of banks in supporting economic growth momentum in Abu Dhabi and the wider UAE?

Sure. Thank you again and um very happy to be here today to participate in this panel. Um the way I look at it is that banks are uh just uh I would call it a piece in the puzzle of the wider ecosystem. Right? So banks are important to support the wider vision of the institution and and you you measure the strength of an economy with the strength of its banking system because banks are a reflection of the health of the economy and the strength of its clients.

So we have a very important role to play to ensure that we continue to support the ecosystem and we always keep two steps ahead of the equation. Um there were some discussions whether some other uh players would disrupt banking system and I would always say that uh we complement each other because the real competition is the customer expectation. You solve for customer expectation whether you are a bank or a non-bank and hence it's very important that banks continue to evolve and driving future innovations to support our partners on the corporate side to ensure that we deliver on the future ambitions.

So moving on to you this is a question that you're probably bored of at this point but I have to direct it at you. You said earlier this year that there is no timeline for it going public, but that the company remains ready. What would it take? What environmental changes would it take for the company to actually go public?

Um, thank you. Thank you for having here. Um, thank you panelists. Um, I mean we are we are in a journey, right? It's been over the past three years we we have doubled the size of the airline.

We have just announced a 31 new destinations. I mean we came from an airline that was bottom quartile in terms of profitability about three years ago globally speaking to an airline today that is top quartile. We're going to be investing about $10 billion 37 billion Ghraft to double again the airline and cash flow generation is coming very strong. So I mean opening going to becoming a public company is just another way to finance the company right and reality is that you have now is paying dividends um and we can finance our growth from our own cash flow generation. So IPO is not an endgame.

It's not a final destination for us. I mean our obligation as management is to be ready to to go public whenever the shareholder believes is the right time. But if you look at the what's going on in the world, right? I mean the most profitable airlines are buying back shares, right? And um I I think the shareholder is wondering why IPO with their line is generating cash and and self-funding $10 billion in investment over the past five years.

So in the end is going to be a shareholder decision. Ed from a governance from a governance perspective from a a balance sheet perspective um from a storytelling perspective a strategy perspective p perspective is ready to go but it's up for the shareholder to think if there is a need from their part to go public

sticking with you for a second another theme in this panel that came up was culture and you know airlines especially in the region have a big part in promoting you know the the country's cultures. How do you see the role of it? Uh h how do you view your strategy? Has it changed in terms of promoting the Abu Dhabi culture over the past few years? I would say that um ADQ is the shareholder of Ediad now and in about 2019 ADQ started to to to manage the airline and and the the mandate that ADQ gave to AIAD was really clear as a shareholder right deliver extraordinary customer experiences and at the same time make money right uh I mean airlines are very important for for cities for for economic development as you could see before I And we are we are we're growing a lot and and hiring more than 2,500 people per year.

But you can only do that if you make money, right? So I think the role of the the airline to the country is extremely important. I mean our contribution to GDP is extraordinary. Uh but we can only do that if we're sustainable, right? Financially viable and and and that's what we try to do.

improving in our product, improving our customer experience and at the same time make sure that we expand our margins so that the airlines can finance the growth ahead of us. Abu Dhabi is booming, population is growing more than 7 to 8%. So we need to be there with capital uh to be allocated at the right time at the right place so that we can support the the growth of Abraham I want to move on to you and I haven't forgotten about AI. We will give it a chunk of time towards the end of the session. Uh but again going back to the banking system and with healthy balance sheets in the UAE going around, banks in the UAE generally have had successful ventures into M&A and acquisitions into different places around the world.

Is that something you see within the next few years for Abu Dhabi Islamic Bank consolidation efforts whether in Europe, Asia, elsewhere? Is that something that you're planning on or is that something that you would say interested in? So um before talking specifically about Abuabi Islamic Bank, I think um what I picked up from the opening speech from his excellency Kaldun is that you have to believe right because the next 10 years is going to look very different than what we have envisaged over the last 20 years and um if you going to go into heavy investments particularly in the field of AI the Excel file will not work. It's not an easy investment to assess what will be the return on investment to come. You have to believe and you have to invest.

So going back to your question, will the traditional way of expanding the banking network still hold true in the next 10 years? I would probably say that scale is not anymore as important as smart. You have to be intelligent. So instead of looking how you expand your footprint in the traditional way, you have to think how you intelligently expand your offering and become almost like a global player with a regional and local flavor and that's what's going to define the next 10 years of bank. Tal, you spoke a little bit about education and you know in your previous answer and Aldar has had again a successful venturing out into education over the past few years as well.

Are there other sectors that you're looking at outside of the traditional uh vehicles that you've generally put your money in? You know, we've spoken about education, housing, obviously the bread and butter, but are there any other sectors and any other regions that you would be interested in venturing out into outside of the country here?

So, outside the UAE, we've had two um successful ventures. One in the UK where we have three partnerships. We own a real estate developer, we have a logistics franchise and a credit franchise. And we're also in Egypt where we majority co-own with ADQ a listed developer called called Sodic. But again back to the opening remarks when you believe what Abu Dhabi has done and what we've seen and what it is going to do in the next five or 10 years it makes it very difficult to start to allocate capital

anywhere else from a riskadjusted uh basis. So the majority of our capital is going to be dominated in the UAE and the places closest to home across all of the sectors. Um but on your first question, there are themes um for us as a business and some for the nation that we are investing in. So logistics is one that we've been very very bullish about. We've been talking about it for the last few years.

Um we've taken some baby steps. We want to take some bigger and bolder moves when it comes to logistics and particularly warehouses to fuel Abu Dhabi's economic diversification efforts, Abu Dhabi's industrial um strategy which and you know we think is absolutely important with light manufacturing with technology Stargate and and the likes. Another interesting theme a bit of competition for my fellow banks on stage and thing is is the rise of private credit. Private credit has been a globally rising theme um for us. We c we concentrate more in real estate credit and that's what we've investing with mubad and Aries in Europe and we think with everything that's going to happen over here we're going to need the banks but we're also going to need private uh credit.

So that's another theme that we're looking at as a brand new sector that we're talking to the authorities about and in an environment such as ADGM where it's conducive to investments they'll create the right frameworks to attract those sectors. So that's another key sector that we're looking at in addition to the ones that you mentioned.

So since you brought it up and I wasn't planning on asking this, but you brought up private credit and I'll bring back the question to you. Are you worried about the rise of private credit um in the region and is it do you think that the market is ripe for private credit here?

Um no actually we welcome it a lot because private credit is playing in a field where banks have not gone yet, right? So it's filling that vacuum. So uh banks complement private credit and private credit complements bank and they have different investor type. So it talks to different investors and different mechanism. So in the country we welcome that different development and we'll continue supporting it.

So we've got a few minutes left for this panel which has been really interesting so far but obviously it wouldn't be a 2025 conference if we don't speak about artificial intelligence. But I want to dedicate questions tailored to your respective companies about AI. Yousef perhaps going to you AI how does it cut cost in your daily operations?

See each sector now we are forced to go for upgradation especially in the AI sector. We in food sector we are focusing now the new innovations in the food sector like glutenfree, diet free, diabetic food and uh egg free sugar free

all these new innovations are coming in the food sector. So artificial ind is very important for us to use because this is the new new technology 8 billion company which we have got 300 hyper markets. Now the people can pick the products and artificial in AI they can go and they can pay themselves with book and not necessary to wait in the in the cashier or cash counter. So this is one one sector that we are focusing that our customers should be satisfied for that we need artificial needs to be used especially robotic plucking and in our warehouses grading and expire expiry all these AI we are using now

tal when it comes to the housing sector does AI cut cost at all when it comes to design you know the product from origination until fruition and how do you see the impact of it across your business?

Absolutely Abu. I mean first of all the theme in the past has been digitally enabling the business. Uh today it's about digitally disrupting uh not just the business but the entire sector from design to construction. Again we're going to build homes but in the how um we're not looking at it from a pure uh cost cutting measure but more from a value creation uh perspective and we're doing that in two folds. One is outward looking so connecting our customers.

Abu Dhabi has taken great steps in developing TEM connecting all the government services. We've developed our version of TEM. Since TEM has become a globally recognized brand that's called Live Aldar, which is a one-stop digital solution, whether you're in our schools, malls, loyalty program, buying, renting a property, all on one platform that's uh that's live. And the other part is uh embedding AI across every part of our business from recruitment, finance, legal, design to construction to management. Um and and we've taken steps but I think we're just at the at the nent part of what is to come.

So it's a very exciting journey ahead.

Thank you so much Yousef Hammed and thank you very much for your time today. This is all the time that we have left for this session. Uh, but I wish it would have lasted longer. I think it was really interesting. But thank you so much and I hope everyone has a successful few days at Abu Dhabi Finance Week.

Thank you guys.