Mr. Dream Builder

Rashid Galadari has branched out from the powerful Galadari family to start his own empire. As he tells Anil Bhoyrul, it’s going pretty well so far.

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By  Anil Bhoyrul Published  May 14, 2006

|~|45-TP-71-200.jpg|~|WINNER: Rashid Galadari is hoping to change the face of property development in the Gulf with a series of specially branded projects.|~|Rashid Galadari has branched out from the powerful Galadari family to start his own empire. As he tells Anil Bhoyrul, it’s going pretty well so far. Rashid Galadari describes himself as a man who “builds dreams.” When it comes to himself, his track record is pretty impressive: five years ago, at the age of just 24, he dreamt about becoming one of Dubai’s hottest property tycoons. He dreamt of property stardom. And he has managed to do just that. Galadari now owns and runs Galadari Investment Office (GIO), the real estate arm of the massive Galadari Group. GIO is behind the fabulously innovative G-Tower project, it has its fingers in a Dubailand pie, and has found a nice market in branded properties. Only eighteen months old, many experts are already tipping GIO to become one of the region’s leading property players in the coming years. “I realised sometime ago that to succeed in this business, you have to be different. You have to do something better. And that’s what we’re doing with the concept of branded properties – attaching a famous name to the design, and giving it some kind of theme. At the end of the day, investors want to make money. Why does it work? It’s very simple. Think of it as having two black shirts, exactly the same quality, everything is the same. But one goes for ten dollars, the other for a hundred. It’s because one has a designer label attached to it. That’s the same philosophy that we’re using,” he says. So far nearly US$400 million has been raised through a mixture of pre-sale and debt finance. GIO’s current flagship development is the 45-storey G-Tower, described by GIO as the “ultimate” in luxury living. Three more branded towers are on the way, and there has been no shortage of buyers. It probably helps that young Galadari comes from the family that built the first ever five star hotel in Dubai in 1975, and is still involved in retailing, automotives and industrial plants. The “Galadari” family name has usually been synonymous with success. Galadari himself admits that it helps open doors, but once inside the rest is up to him. He explains: “I’ve never had any kind of feeling that I have to prove something to my family. My family already know what I’m capable of. I’m not here to prove anything, but I’m at the age now where I feel where I can take advantage of the situation. I have been coming up with concepts for many years before this. But it’s difficult to convince people of your ideas when you’re so young, so now I guess is the right time.” Galadari adds: “It’s not a power trip. It just goes back to that satisfaction of creating something that’s right. I would like to be noticed in the sense that we have managed to do something that made a difference. I guess that’s as close as it gets to power trips.” GIO is now in talks with a number of the world’s leading architects to produce more branded projects – not just the exterior, but interior of buildings. Although their names are been kept under wraps for now, Galadari admits it is similar to producing a “Harvey Nicholls” residential tower. And he is confident that this is the way forward for the market. He explains: “When we started looking at the whole thing we we had one of our Saudi investors looking at the G-Tower, and he said “so what’s so special about it?” I told him all about the interior design and so on. He said I’m really happy for you, but what’s in it for me? He said I want to make maximum return on it. It doesn’t matter whether I’m buying a property for 600Dhs a square foot or 1600Dhs a square foot. I just want the maximum return. So it all evolved from there, the whole branding concept. We realised then that having a property branded is definitely the future.” Although Galadari insists there is money to be made on branded developments, many observers are now questioning whether the whole property market has reached its peak. Is there really room for the new kid on the block? Take Emaar, the world’s biggest property developer, which has seen its shares crash in the past three months, despite making record profits. The entire region’s stock markets have fallen this year, largely because of the downturn in property shares. Add to that, comments from the likes of Kanoo Group deputy chairman Mishal Kanoo that another increase in US interest rates will have disastrous effects for this market, then, in theory, Galadari should be a worried man. But he certainly doesn’t appear so. He says: “Let’s talk about the property market and how it’s going to crash. Well, it’s not going to happen and I’ll tell you why. Not because the market is so great, everything is so rosy and it’s selling just the way it was four years ago. I’m not going to lie to you and pretend that. But what is different is that you have the government supporting this boom, you have the government supporting this industry. When you have the government backing a city, it cannot crash. At the end of the day the government is making an effort in trying to court international investors to Dubai.” Galadari also dismisses the argument over US interest rates, explaining: “Okay, interest rates in the US can’t be controlled. But there is a flipside to this. You look at the laws that are coming out in Europe, especially in banking. What’s happening is that a lot of investors in Europe are now trying to find a separate place to invest.” He adds: “Dubai is becoming the ideal location for a lot of people. There are always articles on Dubai and the uncertainty and whatever else. But which country is going to say, oh yes please take your money out of our country and put it somewhere else. Everyone is going to find something or the other to put the place down, because at the end of the day we’re competing against the world.” So the key question is: would Galadari himself by shares in Emaar. He has no hesitation, explaining: “I don’t play the stock market, but if I did, yes. I would buy Emaar shares. They are low now but they have been high and will be high again. Everything that’s going on at the moment, whether it’s the stock market or the real estate market, everything is relatively young. Everything goes through some sort of a correction phase where things do stabilise. That’s happening in the stock market as well, that’s the way I look at it.” Galadari says he blames much of the negative publicity aimed at developers on the lack of quality construction. GIO has been in talks with banks over providing a unique “performance bond” – whereby the quality of the finished product would be guaranteed. Not surprisingly, the banks haven’t been falling over themselves to fund the idea, but he says it may be the only solution in the long term. He says: “What’s happening is that a lot of developers are coming into this market with absolutely no experience whatsoever. They think that they are the gurus of property. I would just say that people should start becoming more selective. The buyer definitely has to have greater diligence, in terms of who are the people involved in the company, who are the consultants, who are the sub-contractors.” Galadari adds: “My father once told me that if you ever get into the real estate industry and you build something, than build it as if you’re going to be living in it yourself. We’re selling homes to people, not a product. That is what makes us different from the rest of them.” At this rate, Galadari is likely to be selling thousands more homes in the years ahead.||**||

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