Emaar’s Alabbar describes a property slowdown and a cash cushion

Bloomberg’s Guy Johnson asks Emaar Properties founder Mohamed Alabbar what he sees after decades of development in Dubai. Alabbar credits many contributors and says the city’s built environment also reflects administration and leadership, while acknowledging mistakes along the way.

Alabbar says mall traffic and retail sales in his businesses were about 10% lower after several years of roughly 10% annual growth. He says hospitality occupancy fell from around 80% to about 65%. He presents those figures as his company’s experience, not a measure of every business in Dubai.

Emaar’s policy is not to discount property sales, Alabbar says, and sales fell by more than 50% after a period of rapid growth. He notes that the previous year was unusually large for the company and says real-estate cycles require preparation for a downturn.

He describes the current global environment as a kind of winter. Because real estate is cyclical and land supply can expand, he says his company keeps substantial cash and low debt. After reassessing its cash flow and sales, management decided its cushion was large enough to return additional money to shareholders.

Alabbar says construction continues and contractors are moving on time; he estimates material costs have risen about 5% and says the company would help contractors. He is holding back the tender for one large tower until conditions cool, rather than stopping all development.

Operating in many countries exposes a developer to political and policy changes, he says. He describes one episode in which contractors’ funds were stuck when a bank closed, and argues that developers should contribute to local economies and manage cash carefully.

His practical test is whether a country and a project are healthy enough across people, cash flow, markets, supply and demand to withstand an unexpected problem. Alabbar says he prefers to use his own cash and limited debt, and feels a personal responsibility when investing other people’s money.

Asked to compare technology and property returns, Alabbar says early technology investments can deliver high returns but can also lose their value. He believes his real-estate approach performs well because he tries to acquire large parcels at attractive prices and with manageable payment terms.

He says many of his land agreements involve a share of profits rather than a large upfront cash payment. His confidence in the approach is a view of his own deal structure, not a guarantee that property investments generally avoid losses.

On whether Dubai property is in a bubble, Alabbar argues that recent regional stress has already tested the market. He credits tighter central-bank real-estate lending rules with reducing risk, while acknowledging that private payment arrangements between developers and landowners can still create exposure.

He says he has looked for distressed opportunities but had not found an attractive purchase. His outlook for the next year depends heavily on geopolitical developments; if tensions ease, he expects the market could recover over the following 12 months.

Alabbar says the company has roughly 160 billion in backlog and reports that customers continue making installments on time at rates comparable to before the war. He presents this as a sign of resilience in his own customer base, while saying he hopes other developers see similar results.

Looking five years ahead, he expects to continue in property and could expand in India, where he sees economic and population growth. He says the group also continues to look for large deals in Egypt, Syria and the UAE, while recognizing that suitable large parcels are not always available.

Alabbar compares evaluating a country with assessing a company: look at leadership, debt, policy consistency, human resources and cash flow. He praises the UAE as a place to operate, an assessment informed by his own experience and business interests.

Johnson asks about taking a previously listed development business back into the parent company and whether that weakens local capital markets. Alabbar says the board judged the valuation multiples and transaction in light of shareholder value; he agrees the region needs deeper capital markets.

Asked where investors might find opportunities, Alabbar points to his businesses in real estate, technology and food. He argues that the UAE can serve as a base for operating across the wider Middle East, including logistics, agriculture, data centers and food businesses.

He expects regional opportunities to grow if geopolitical conditions improve and says he sees potential in Syria’s agriculture and natural resources. These are his investment views and hopes, not a prediction that conditions will improve on a particular schedule.

On succession, Alabbar says senior leaders run his businesses and that several potential successors sit below the real-estate CEO. He says succession planning is less advanced in the food business and wants senior staff treated and rewarded as partners based on performance.

Johnson asks how a new generation can retain an entrepreneurial instinct instead of merely managing what exists. Alabbar says some people will be more inclined to build and grow than others, and leaders should give younger colleagues chances, support and room to make manageable mistakes.

Despite continuing expansion, Alabbar says he is worried about the state of the world and the position of middle-income people. He argues that visible disparities in wealth can deepen frustration, and that healthy societies matter to long-term business success.

He says his investment decisions increasingly consider local economic contribution, including taxes, training and work experience. Alabbar calls for responsible investors and governments while saying he remains focused on shareholder returns.