Building the Falcon Economy, Part II

[Music] good afternoon everybody it's a beautiful afternoon today at Abu Dhabi Finance week another amazing Edition for this event I'm really happy to join you at this panel discussion uh of course with my esteemed guests before I start I just want to give you a quick brief of what are we discussing today so if you look at uh each of the esteemed speakers represented here today they play a distinctive yet inter connected role in shaping the Emirates economic landscape so uh when you look at Abu Dhabi economy and the resilience uh of it during the past years it became a model for the region and for the world from Real Estate and capital markets to Industry and Innovation Abu Dhabi of course is uh serving its path as a leading economic Hub so this is what we're going to be talking about today challenges opportunities for the region strategies what we've been seeing lately uh done in terms of economic strategy and I would love to start with you uh Mr jasm when it comes to diversification of course this is a headline for UAE for Abu Dhabi for the region overall and everybody is asking about the progress that we have made so far when it comes to diversification so what kind of initiative are you taking at Abu Dhabi Department of Economic Development what kind of initiatives are you taking to ensure this progress going forward and may I think to answer this question maybe if you allow me just a quick 30 seconds just to qualify the Falcon economy we've been hearing a lot about it today and I think it's important to understand the characteristics or the ambition behind the Falcon economy and it's six main things one is being resilient which is you know having an economy that is very well Diversified and you know self-sufficient second is an economy that you know Fosters a skilled Workforce and is very Progressive in terms of regulatory uh uh framework and ecosystem right just on these three characteristics if I give you two examples of active strategies that we have in in the Department of Economic Development and Abu Dhabi we've launched the Abu Dhabi industrial strategy in uh 202 22 the aim of the Abu Dhabi industrial strategy was to uh uh double the industrial sector's contribution to GDP to over 170 billion it aims as well to grow the non oil exports to over 175 billion create around 30,000 knowledge based jobs right that was in 2022 in 2023 of October we launch we launched the Savi cluster right the smart and autonomous vehicles industry cluster which targets uh contributing over 60 billion of non oil GDP by 2045 creating 60,000 skilled uh uh Workforce right but it's not just about jobs it's not just about GDP it's also about quality of life which maybe my colleagues can can talk a bit more about but from the lens of Savi right we only recently last week launched two major Partnerships one is to really bring uh commercial uh taxis to ababi with archer flying commercial taxis second one is about Robo taxis right so you know when you talk about economic diversification it's not just businesses people who are living in Abu Gabi will also see the difference that's beautiful and of course when we talk about Abu Dhabi Emirates uh diversification an important sector that has been C you know capturing the attention of media is the real estate sector and to this I would love to come to you Mr Rashad and foreign direct Investments is a huge topic globally and it's really key for insurance in economic diversification so let's make headlines today and if you can share with us the recent figures for FD attracted to the real estate sector in Abu Dhabi and if you can share with us the importance and significance of this sector in achieving economic diversification to Abu Dhabi absolutely May thanks a lot that's that's a great question you're absolutely right so let's let me just take you step back with the Inception of adri right so when the government was mandated mandated the department of municipality and town planning to consolidate the real estate function that was currently within three municipalities under ad they noticed that that was not enough to meet the expectations and Ambitions behind real estate contribution to foreign direct investment and to the overall economy and GDP right so what did we do different so if we take a step back we actually on top of the real estate function added two key roles so on one hand we have strategic planning and data analytics right so now we study supply and demand we monitor and manage the occupancy rates of you know the overall residential units in the Emirate of ababi and in the city of ababi right so we know that we have close to north of 230,000 330,000 units residential units in the emirat of ababi right so we split that down we are aware that 70% of those are within the owner occupier component right and they currently over the past 5 years have been occupied at somewhere between 85 to 90% occupancy rate so that reflects a very resilience let me take you back to resilience right it's a key word reflects a very important and resilient real estate sector in the Emirate right so that's on one hand right the strategic planning of the real estate sector as a whole whether it's digitalizing policies procedures or managing supply and demand or even looking at benchmarking the current laws to enable and promote more real estate development in their sector on on the other hand May basically have a completely new function that is investment promotion it's basically taking the real estate sector as it is and showcasing it on the international footprint our has we have our colleague Mr with us today here and aldar has done a tremendous exciting and uh promising exercise with managing investment promotion they've taken the uh International customer base of their real estate sales from a 300 million annual uh 300 million dams annual turnover sales from 2019 to today somewhere South north of you know 7 billion dams right so that's close to 20x that growth right so we want to take that success story and replicate it with the remaining peers in the real estate sector so these are two critical items that we're working on you know strategic planning and then investment promotions that we believe will really add a difference and uh make a difference to the foreign direct investment contribution into real estate and promote the real estate sector as a whole that's beautiful let's stay with real estate sector of course at D properties is the largest real estate developer in Abu Dhabi in your mind Mr talal what makes Abu Dhabi real estate sector an attractive destination for uh investors who Target the real estate sector and especially with what Mr Rashid was discussing when it comes to uh you know uh marketing and promoting the emirat as a destination for Investments so thank you very much and pleased to be here today so it starts with what makes ABAB unique and we heard from J and and rashed and our colleagues about what you get in terms of this very ambitious Falcon economy Strat of where the government's going from an economic diversification perspective from a growth perspective but you attach to that a quality of life um Safety and Security um you know people tend to forget that you know it's not a dream today you can land in the airport and in 10 minutes be in worldclass theme parks 10 minutes later be in worldclass uh cultural museums 10 minutes later be in downtown and experience true Arabian hospitality and beautiful beaches and parks where and and that's not something that's going to be here in 10 or 20 years that's where we are today coupled with Safety and Security AA economy you know dollar Peg and the list goes on so with that our job has been relatively easy we're approaching our 20-y year anniversary for 15 years we were selling a billion dollars a year of Off plan real estate last year we sold $9 billion of Off plan uh real estate it used to be one or two% to rash's point of international buyers um that's now close to 30% of non-resident expatriate buyers uh acquiring in abudhabi to live to move everything that's happening around us here in adgm this is not a place where people are subscribing a license and opening up a rep office we see real investment professionals hedge funds and others be based here attract with their families and that creates demand for not only residential but office education retail Aviation so um it's a it's an amazing vicious cycle that we're all benefiting from this is beautiful and let's talk in general now now about the investment landscape in Abu Dhabi and I want to come to lunate Mr safe lunate is a leading alternative investment manager we're talking about more than $100 billion dollar in assets under management so you are in direct contact with foreign investors retail and institutional so what do you hear from them when when you know when they see what's happening here in Abu Dhabi the diversification plans what attracts them what do you hear from them around their perspective on the economic development of Abu Dhabi I think the most important thing that that a lot of people miss this wasn't born yesterday there is a reason why we are where we are today and if you really take a straight line that would go back to the 70s where the birth of the United Arab Emirates was based on law regulations that enabled where we are today when it comes to tourism Industrials oil and gas uh uh it had airlines and all of that took this amount of time to be where we are on the asset management front it's a little bit different because it's this stability that was created over the last 45 years that allows an industry like ours which is a very shy industry to start existing in a place like Abu Dhabi Global markets today uh so with that perspective a lot of people that come and ask us this happened in the lot we tell them no this is you need to look at the laws the regulations that enabled this to exist uh today on Lunette were're an alternative asset manager we invest globally um and our capability today was was enabled by a place like adgm where we have enough rules and regulations to be able to launch properly regulated funds and go out and invest globally and be perceived as and seen as part of the global economy part of the global investment Community but also on the local side the size today unet is in allows us to offer investment solutions to the local economy and this is exactly what we're trying to solve for for the local economy so that started around 3 four years ago and we started launching ing our exchange traded funds and that gives access to the local community to invest globally in their hums on adx so just like buying a Dar today you can buy us turkey Japan China Pakistan turkey you can be exposed to different markets across the exactly and that again couldn't have happened without the proper rules regulations that allows not only us but our service providers like bny melon like S&P to come and operate here in this part of the world and then on top of that the main change that happened last year was on the end of service benefits so there is now a direction that we have enough capacity for the asset management Community to offer localized end of service benefits and this is something that we really look forward to launching next year well this is amazing and I want to stay with this uh topic and I want I come to you Rajiv uh when we look at the IPO activity globally we have seen weak IPO activity and this is mainly because we have seen some uh economic uh challenges for many countries developed and and in Emerging Markets overall but when we look at the region when we look at Abu Dhabi Market it's a completely different story we have seen one of the biggest IPOs in the region in Abu Dhabi stock exchange market so in in your mind to what extent do you believe that this is something that is going to shift and cause a progress in Abu Dhabi financial markets and what do you expect to see coming next in 2025 yeah so I think there multiple factors here number one is that the the IPO markets usually indicate the underlying health of the system as such because there has to be appetite right there's the a you need the diversity breadth and diversity of new companies coming going public number two there should be enough appetite to invest in those names right because if the markets are not optimistic nobody's going to buy the IPOs yes um and and I think that third is the overall um desire of foreigners to invest and overse local to invest in general right because I think that's a part of the savings wealth and Savings in the system and I think I think abudhabi obviously fits the bill in all of those ways and as you know we have invested pretty aggressively in abudhabi as an outsider in fact um we now have more invested into abuid than we have raised money from Abu Dhabi uh in fact we have more in Abu Dhabi now than China in our Global portfolio so it's actually pretty significant bet and it's and and as the breadth of the investment opportunity increases here you know it was real estate Focus but now Industrials are coming in in the banks and and we're seeing diversification of sectors overtime insurance companies so on so forth so there's the breadth increases I think I think the opportunities will expand you'll get more IPOs also what would you like to see in terms of Abu Dhabi financial markets well I think I think there are two things one is is uh the more bread the better it is because if you get other Industries which are less dependent on for example um just the local uh economy as such so less cyclical businesses which is always good so I think I think that's a good thing the second thing is the the depth is still a little bit on less Lower Side in other words it's hard to deploy a lot of capital so as the free float increases you'll get more depth the Valu are still very attractive actually so it's kind of interesting that uh it almost seem like what what I remember seeing in Asia in the '90s when the Big Bang have a lot of things opened up it seems like that in a similar way fundaments are very attractive but the world hasn't paid fully attention to it yet yes and I think part of the story here is the political economic stability for the region for UAE and for Abu Dhabi as well that is a key factor in attracting foreign investments I want to come back to you JM and when you look at um the economic strategies at Abu Dhabi Department of Economic Development when you put the economic strategies for Abu Dhabi to what extent do you align it and Benchmark it to what's happening globally in order for Abu Dhabi to stay competitive because this is an very important and crucial factor to remain to uh you know sustaining your position as a falcon economy I think may this is a great question right and you know I I I want to tell you that we're very meticulous deliberate and structured when it comes to economic planning or planning in in general whether it's you know at the Abu Dhabi economy level or whether you know my colleagues here and the entities they're responsible for right and we look at the world two ways inside out and outside in right so we look to see what kind what sort of Industries are reshaping the world we look to see you know what industries are being disrupted by geopolitics by Innovation by technology and then we look inwards to see what are our competitive advantages right so today Abu zabi if you think about it we have State ofthe art connectivity and world class infrastructure right we have a stable access to energy source that is reliable right but I don't think we want to be competitive anymore I think what we want to be is a trend set right and you know we look at these Trends and and that's happening around the world and the question for us is how to turn headwinds into ta ons I'll give you two examples right one you know let's go back a bit to the pmic right there was an economic theme back then there was de globalization countries trying to Nearshore you know be more uh reliant on themselves rather than each other right but when we came out of the pandemic as as the UAE we signed our first comprehensive economic partnership agreement with India right to increase non oil trade in the last two years we've almost signed 10 comprehensive economic partnership agreements with a value of approximately how much I can't recall the uh but I can tell you that we're championing free trade and fair trade right another important uh uh bet that we're making I think is on the Agri growth and water abundance cluster right we know the population of the world will you know be north of 9 billion by 2050 it means you need 50 50% more increase in agricultural production means you need to tap into 15% more of water reserves right and you could think of this as a challenge but for us this is an opportunity in Abu Dhabi when we launch this cluster we want to be a trend Setter and we want to bring the world together and solve these problems I love what the idea that you mentioned that we no longer looking at only staying or being competitive we are Trend Setters and this is true actually when you look at what Abu Dhabi has made and achieved during the past years it actually gave a lot of lessons uh to many governments around the Globe when it comes to weather digitizations weather Government policies and so on talal I I want to come to you to a topic that is really crucial it's capturing headlines in different sectors which is sustainability and because you are the largest real estate developer in Abu Dhabi I'm sure that and your a publicly listed company as well I'm I'm sure that this is something that captures the attention of your strategies because it's something that the investor is focusing on so how are you integrating sustainability within your overall econ economic and uh long-term strategy so ababi has been at the Forefront of sustainable development projects like mustar um 15 years ago were well ahead of their time uh the success that the UA had at cop 28 um last year um um and the announcements and the commitments that came out of that Thea fund um that's there it's sustainability is core and it's it's real I'll put her on the spot with our ex-minister of climate change is um in the crow and today she leades one of the largest investment vehicles in abudhabi because there's a clear path between sustainability and investment we don't see them as different it's not just a buzzword it's core to everything that we do uh real estate has one of the largest carbon uh Footprints out there so it's imperative on us to make sure that we're we're doing the right thing and we take that very seriously not only from an environmental uh perspective but from a social and a governance perspective um so I think Abu DHI is you know again Trends Setter Jim said is going to be a a lead and a benchmark when it comes to overall sustainable investment sustainability is good for investment um and that definitely applies in the sector that I'm in which is which is real estate with this uh I want to wrap it up because we only have like one minute left uh thank you so much for joining us today I want to thank our audience as well and and have a great day ahead at Abu Dhabi Finance Suite thank you [Music]