Talal Al-Bahar interview to VISÃO 25 th July 2013

Transcription

1 by Paulo M. Santos A bet from the Arabias Talal Al-Bahar is the largest investor in the artificial island of Dubai and one of most influent in the Middle East in the real estate area. In Portugal, he owns Pine Cliffs in Algarve, and is prepared to invest hundred million euros in other projects, amongst which a Deluxe Resort in Serra do Caldeirão. Madeira and Lisbon will be the next targets. A long time passed by 10 Years, 3650 nights. From the moment the initial paperwork was submitted for the licensing of a new resort in Algarve,until its approval five governements passed by: Durão Barroso, Santana Lopes, two by José Sócrates and one with Passos Coelho. There were nights during which United Investments Portugal, owner of the Pine Cliffs Resort, had to wait prior to initiate a new investment in Loulé Council. No wonder that when asked the Kuwaiti businessman Talal Al-Bahar, which was the greatest obstacle to foreign investment in Portugal, the response was immediate: "Bureaucracy." It is one of the majeur problems to any Investor. In the majority of the countries where we invest we are able to licence and materialize a project within 3 years. Here we had to wait ten years for the licensing. And now we have before us the time needed to build the venture. It's too much, he regrets. Now that the paperwork has gone through, Talal Al-Bahar can reveal to VISÃO what he intends to build in the 380 hectares of land, bought to Quinta do Freixo in 2002, near Benafim, Loulé in Serra do Caldeirão. It will be one more Luxury Resort, for clients seeking longer stays. The project itself is more orientated for a tourism within a special environment, wellness and in contact with the nature. The new resort will have an unobstructed residential area, where the country houses will prevail, and the hotel, which will provide the services will be a medium size hotel. The Entrepreneur considers an investment, in the first phase, of circa 250 million euros, which will generate 350 new employments in the area. Destination Lisbon But the bet in Portugal it is not only this project in the Algarve countryside. Talal Al- Bahar admits being very interested to invest in the Lisbon area. This will be however in different projects from the ones in the Algarve, where the facilities were built from scratch. In Lisbon the group will seek resorts that were bankrupt and which are now in the hands of the bank. To the banks these are toxic assets, that will only generate problems in the balance sheet. For a group like ours they might be a good opportunity to invest. We are in a phase of meeting with the Banks and study the various projects, but nothing of concrete yet, Talal Al-Bahar says. Upon the acquisition the group will have to invest in adapting the existing buildings to Page 1

2 the concept of the other resorts. However, this might be a lot more inexpensive than building from scratch. And why Lisbon? It is a market that can bring diversity and complement our offer. At this moment, in Portugal, we can only sell beach. In Benafim we will have the nature, the wellness and environment. The city is missing, culture, history Our experience tells us that there are lots of tourists who like Lisbon. For example, the Brazilian, an interesting outbound market, who want city destinations, not Algarve beaches. Also Portuguese speaking citizens from Africa prefer Lisbon, as well as Asians. Lisbon can be a very interesting investment to our group. But our bet does not end in the capital. Talal Al-Bahar opens the game and says that he is negotiating the acquisition of an important project in Madeira It is not yet known, however, whether or not the business will be realized we will present a proposal to the bank and wait for their acceptance. In the four corners of the world Based in Kuwait and quoted in the local Stock Market, IFA Hotels & Resorts is the real estate and tourist part of the family s business. With investments spreading all over the world, it continues its growth despite the international crisis. Therefore, at the beginning of this year there was the inauguration of the luxurious Fairmont in the Palm Island, Dubai. Comprising 381 rooms, with a ocean front of 460 mts, this new hotel had an investment of circa 300 million euros. But more: the compay acquired the YOTEL in New York, a business of 275 million euros. It is a new hotelier concept the industry call it the Ipod of the Hospitallity Furthermore, the group also has touristic and real estate projects in Seychelles, Tanzania, South Africa, Thailland, Lebanon and London, amongst other countries. And it is still looking for new investments. China and Singapour, are some of the markets to which we are open to opportunities that may arise. Talal Al-Bahar revealed to VISÃO that, by the end of this year, a time-sharing company will be borne, to work with all resorts of the group, spread all over the world, in a business model that has not being explored. it can be a very interesting business, due to the large variety we have on offer in the different countries, the entrepreneur explains. The Group pretends to capture those clients who would like to have a luxury property but also like to change the destination from place to place every year. A Family Business Talal Al-Bahar is the oldest of the four children of Jassim Al-Bahar. He was 6 years old when his father came to Portugal in 1984, to look for plots to buy. He found what he was looking for in Algarve, in the cliffs between Albufeira and Vilamoura. At the beginning he was not sure what to do with the land. There were various alternatives. He considered to construct villas and sell the plots but decided on the resort which originated the Pine Cliffs the first touristic investment of the Group outside the Middle East and, as he admitted in an interview to Visão in 2004, that Page 2

3 became the inspiring model for the future investments. Jassim Al-Bahar passed away in 2008, in his algarvian resort. Talal who was at the time in the Administration of the company assumed the control of the business. And it has diversified since then. For example, the Family is a shareholder of Banco Comercial Português, a long term investment. I am not so concerned with the value of the shares. I think the bank has now a good management. The entry of the new shareholders was important, as it brought in money, but this is not a favourable time for banking business, in Europe and, above all, in U.S.A., he says. In what regard Pine Cliffs, the place where he spend his holidays during his childhood and youth, Talal refers that during the 12 years he spent in the administration of the company, the business declined, specially due to the competition with other destinations. We started losing market, as we were no able to compete with Turkey, Croacia or even Marroco, who were a lot more competitive than Portugal. Neverthless, he kept his bet in our country, despite the fact of giving up other business in Quenia and Namibia. Why? We consider Portugal a good investment. It is part of the EU, has a fantastic weather, good infrastructures and excellent staff he says. But is it the only reason? The reply we had when we asked what kind of relation he maintains with our country. I come to Portugal twice a year and I regret not to come more often, because this country is very special to our family. Talal Jassim Al-Bahar, The Entrepreneur Portugal needs more attactive fiscal laws What do you think of the economic measures of the Portuguese Government? Let me tell you that I do not feel a foreign investor in Portugal. The Group is here for almost 30 years. This is also my country. And what is your evaluation of the Government? I am a big supporter of this Government. They are making the necessary changes. They are proactive in the policies to attract foreign investment. The Golden Visa is a good example. In fact, I can say that this will be our best year since this crisis began. And, in large part, this growth is due to the actions of this Government, as the Golden Visa. There is still a long way to go, but I think this is correct. Many people in Portugal will not agree with you I admit that. I know that harsh measures have been taken. There was another way, which might be less painful, but more lengthy in time. In my opinion, this is correct. O Golden Visa has attracted many investors, but will it be enough to relaunch tourism and real estate sector? No. Other improvements need to be made, special in a fiscal level. One measure that penalizes more the industry is VAT for the restoration. It is very high and makes the country less competitive with very strong competitors. Times are tough for the hospitality and real estate. There is a lot of competition. The question is: why choose Portugal over another country to invest? To be competitive, Portugal has to be one step ahead of others. And that's why I think there is still much to do. Page 3

4 Can you give us some examples? For example, in air transport policy. Take the case of Faro airport. TAP canceled direct flights from London to the Algarve. In my viewpoint, should open more routes to Faro, instead of closing them. The Algarve requires direct flights. TAP, as a state company, should not be focused only on the routes that are profitable. You have to look at other country's interests. With the privatization process underway, it will be difficult to practice these policies... It is undoubtedly a problem. But that's where the government should intervene. Tourism is an important sector to create jobs. And generate jobs is currently the biggest challenge of this Government. But it is not easy to generate employment, in this conjuncture, even in tourism... You have to create a favorable environment for investors, especially with attractive tax laws and policies that strengthen the creation of wealth, Moreover, tourism is perhaps the industry in which it may be easier to do something. Why? Because many of the infrastructures are already built. You only need to create policies to develop and make it profitable. And a bad transport policy can, over time, ruin the industry. How so? The Algarve cannot be controlled by tour operators and charters. This reduces the market rates and the money ends up in the hands of the intermediary. We need to focus on customers who will eat at local restaurants, who buy in stores in the area, who visit cultural venues, who play golf. In short, those who spend the money that enters in the economy. When the bet is on tourism operator, the customer comes with all included and most do not leave the resort. This is a big mistake. And that is why, in the Algarve, we see each day more five-star hotels to practice the 'all inclusive'. The sector starts going in a wrong direction, which could ultimately bring higher costs to the national economy. What are the major obstacles that a foreign investor faces in Portugal? Bureaucracy. Without a doubt. I waited ten years to license a project considered of national interest. BI Talal Jassim Al-Bahar Chairman & CEO of da IFA Hotels & Resorts At the age of 35, the entrepreneur, born in Kuwait, accumulates various senior positions in multinational companies that operate in various business. With a degree in management by the University of Loyola Marymount in the U.S. presides over United Investments Portugal and is the CEO for Drake & Skull, a corporation with interests in various sectors such as construction, engineering, petroleum, aviation, health and railways, among others. He is also Member of the Board of Directors of Commercial Real Estate, a leading real estate company in Kuwait. Page 4

5 30 years investing in Portugal Since they bought the land where Pine Cliffs would be built, the Al-Bahar family has invested many hundreds of millions of euros in this project, contributing to the capture of foreign investment and the development of tourism in Portugal. Here are some figures: 4,5 million euros Cost of a top residence in Pine Cliffs. It has four bedrooms, Jacuzzi pool and garden. The cheapest is circa euros 250 million euros Initial investment in the new venture in Benafim, Loulé, which spreads over an area of 380 hectares. The project comprises a housing component, a hotel and an agricultural one. Lisbon and Madeira These will be the new bet of the group. The projects will be developed by purchasing enterprises that are in the hands of banks. Beach and jungle South Africa There are two projects in this African country with a differentiated offer. One next to the beach, the other surrounded by the jungle, where there is one of the most famous golf holes in the world. Pine Cliffs Algarve It was the first international investment in the tourism sector of the family Al-Bahar. The project was developed in an area of 70 hectares on the cliffs between Albufeira and Vilamoura Yachts Middle East The company operates a rental business of luxury boats, intended for tourists who want to spend part of the vacation aboard a yacht, where you can find almost all refinements of a true five-star hotel. Palm Island Dubai The IFA Hotel & Resorts Group is the largest international investor in this artificial island. In January this year was inaugurated the Fairmont Hotel, the first luxury hotel located in the trunk of the palm tree. The project involved an investment of about 300 million euros. Page 5