AN ITP MEDIA GROUP PUBLICATION Dubai Riyadh Mumbai London New York WHY DUBAI CAN DELIVER A NEW WAY OF WORKING Hilshaw Group Chairman Lal Bhatia wants to unlock the promise of “live here, work anywhere” UAE: AED 15 KSA: SAR 15 BAHRAIN: BHD 1.500 OMAN: OMR 1.500 KUWAIT: KWD 1.200 #22/03 March 2021arabianbusiness.com 3 www.arabianbusiness.comSUBSCRIBE NOW +971 4444 3000 www.itp.com/subscription arabianbusiness #arabianbusiness arabianbusiness 5 THINGS TO KNOW ABOUT The UAE becoming the fifth country in the world to enter Mars’ orbit was a huge scientific achievement UPFR ONT 08 THREE REAS ONS WHY We take a look at how cryptocurrency is quickly moving into the mainstream C OMMENT 14 LEADER SHIP It is important for the region’s business leaders to adapt different mindsets, says Omar Najjar THE BIG INTER VIE W 1 6 REAL E S TAT E John Pagano, CEO of TRSDC, explains how the Coral Bloom concept sets a new benchmark for sustainable ‘barefoot luxury’ C OVER S T O RY WELCOME TO YOUR NEW GLOBAL OFFICE Can you sit on a beach and work remotely? Meet Lal Bhatia, chairman of the Hilshaw Group, who is investing heavily in the belief that the world will want to live the Dubai dream #22/03 March 2021 Arabian Business /Contents 06 FIR S T WORD q Our responsibility is to keep working hard to provide value for the money we ask our audience to contribute” Scott Armstrong scott.armstrong@itp.com UAE CONSTRUCTION A glut of financials from the industry showed the impact of Covid-19, but optimism remains amid profit drops 18 284042 RESILIENCE Sir Ian Cheshire urges organisations to improve workplace mental health to help people around the world REVIEW: ROLLS-ROYCE GHOST The arrival of the Rolls-Royce Ghost seems well-timed amid growing economic confidence in Dubai 22INDEP TH NEWS S U B S CRIBE NOW www.itp.com/subscriptions +971 4 4443000 AD VER TISEMENT EXPER T VIEWS EXCLU SIVE INTERVIEWS PUBLISHED BY AND © 2021 ITP MEDIA GROUP FZ-LLC. MEDIA WHEN YOU HAVE FINISHED WITH THIS MAGAZINE, PLEASE RECYCLE IT NOTICE The publishers regret that they cannot accept liability for error or omissions contained in this publication, however caused. The opinions and views contained in this publication are not necessarily those of the publishers. Readers are advised to seek specialist advice before acting on information contained in this publication, which is provided for general use and may not be appropriate for the readers’ particular circumstances. The ownership of trademarks is acknowledged. No part of this publication or any part of the contents thereof may be reproduced, stored in a retrieval system or transmitted in any form without the permission of the publishers in writing. An exemption is hereby granted for extracts used for the purpose of fair review. PO Box 500024, Dubai, UAE Tel: +971 4 444 3000 Offices in KSA, UAE, UK, US, and INDIA ITP MEDIA GROUP CEO Ali Akawi MANAGING DIRECTOR Alex Reeve EDITORIAL EDITOR-IN-CHIEF Rob Corder, rob.corder@itp.com EDITORIAL DIRECTOR Eddie Taylor, +971 4 444 3320, eddie.taylor@itp.com EDITOR Scott Armstrong, +971 4 444 3513, scott.armstrong@itp.com CHIEF REPORTER Gavin Gibbon, +971 4 444 3845, gavin.gibbon@itp.com REPORTER Nabila Rahal, +971 4 444 3466, nabila.rahal@itp.com SUB EDITOR Edward Liamzon, +971 4 444 3474, edward.liamzon@itp.com ARABIANBUSINESS.COM EDITOR Andy Sambidge, andy.sambidge@os.itp.com UK EDITOR Alicia Buller INDIA EDITOR James Mathew DESIGN ART DIRECTOR Adrian Luca STUDIO STUDIO MANAGER Abuzar Samo SENIOR IMAGE EDITOR Emmalyn Robles SENIOR PHOTOGRAPHER Efraim Evidor STAFF PHOTOGRAPHERS Aasiya Jagadeesh, Ajith Narendra, Fritz John Asuro PRODUCTION & DISTRIBUTION GROUP PRODUCTION & DISTRIBUTION DIRECTOR Kyle Smith PRODUCTION MANAGER Basel Al Kassem PRODUCTION COORDINATOR Mahendra Pawar EVENTS & MARKETING DIRECTOR OF AWARDS & MARKETING Daniel Fewtrell, +971 4 444 3684, daniel fewtrell@itp.com CIRCULATION DISTRIBUTION & WAREHOUSE MANAGER Praveen Nair ADVERTISING GROUP COMMERCIAL DIRECTOR Amit Chopra, +971 4 444 3463, amit.chopra@itp.com SENIOR SALES MANAGER Pankaj Sharma, +971 4 444 3510, pankaj.sharma@itp.com SALES MANAGER Farah Kanaan, +971 4 444 3175, farah.kanaan@itp.com DIGITAL GROUP COMMERCIAL DIRECTOR Sarah Doherty, +971 4 444 3243, sarah.doherty@itp.com ITP GROUP CEO Ali Akawi CFO Toby Jay Spencer-Davies CORPORATE WEBSITE itp.com CIRCULATION CUSTOMER SERVICE +971 4 444 3000 WEB arabianbusiness.comThe 2021 virtual addition of The Retail Summit – Retail’s New and Resilient Future will discuss the new rules of engagement and the decisions the industry must take now to accelerate its recovery. Book your free pass online today www.theretailsummit.com THE PREMIER MEETING PLACE FOR GLOBAL RETAIL EXECUTIVES Featured speakers: SIMONE DOMINICI, SVP Western Coty LANCE PATTERSON, CEO, Penhaligon’s CAROLINE RUSH, CEO, British Fashion Council ROBERT BROZIN, Nandos ANDREA FRABETTI, CEO, Sunseeker International MARK JOHNSON, Molton Brown KATIE HUNT, JEREMY HODORA, Co-CEO & Founder, Jumia JAUME MIQUEL, CEO, Tendam 9-10 March 2021 online In partnership with:FIR S T WORD / Scott Armstrong, Editor-in-ChiefFI RS T WOWOOWOOWOOWOOOOOOWOWOWOOWOOWOWOWOWOWOWWWWWOOWWO RDRRRRRRRRRRRRRRRRRRRRR/ Scott Ar 6 Vol. 22/03, March 2021 Q OUR RESPONSIBILITY IS TO KEEP WORKING HARD TO PROVIDE VALUE FOR THE MONEY WE ASK OUR AUDIENCE TO CONTRIBUTE, WE’RE DIRECTLY ACCOUNTABLE TO THAT” It’s getting unsociable in the digital world Facebook and Google are back in the headlines after picking, and largely losing, a fi ght with the Australians, and it’s important Australia’s parliament passed the world-first law to force digital giants to pay local publishers for the news content – a move that may unleash more global regulatory action to limit the power of “the Duopoly”. Saving Face Nick Clegg, Facebook’s vice president of global affairs, tried to put a brave face on it, petulantly pointing out that only 4 percent of content in its feed is news. So if so small, why fight so hard Facebook, you made $86bn? Google, seriously $184bn? That’s because it’s time to see these platforms for what they are: huge, global, very successful, very powerful businesses. Despite the marketing, they are not first and foremost social enablers of change, they are not primarily in this to make the world a better place, they are in this for profit – and is it time we all grasped that narrative. Of course, so are we all to smaller or larger degree, but there is a balance to be struck. One strong reason for Arabian Business to go behind a paywall in the first place was to find a business model that could invest in, and sustain, our journalism as the Duopoly (Google and Facebook) dominated digital revenues. We were the first to do so in the region, but I note with interest other titles announcing they will soon be heading down that path too. Our responsibility is to keep working hard to provide value for the money we ask our audience to contribute, we’re directly accountable to that. If we don’t deliver accurate, fair, balanced, relevant and interesting content then our readers will simply cancel their subscriptions. That accountability provides balance between the supplier and end-user, do you think is true of Facebook or Google? Consider this reported on Bloomberg – the “lesson for regulators and governments around the world is, Facebook is a formidable foe that’s willing to pull out the big guns to get what it wants,” former Facebook Australia and New Zealand CEO Stephen Scheeler said. Perhaps Australia has taken a small step towards restoring the idea of their being balance. How much is enough? For us at Arabian Business it’s $5.99 a month for a wealth of insight, opinion and balanced reportage. We hope you agree that is a small price to pay for an independent and accountable news provider. HOW MUCH IS ENOUGH? It’s a relative question of course depending on your perspective. To someone living on the breadline in developing nations this can be as little as three square meals a day (or one), and perhaps a roof over their heads? For me, it’s the odd night out, keeping a roof over my family’s head and the tuitions fees paid, and possibly enough left over to get my old tank of a car through its next RTA registration. But to Facebook, for example, $86bn profit amid a pandemic somehow isn’t enough – despite it being $16bn more than 2019. Likewise over at Google, their $184bn revenue also wasn’t enough, apparently. So strongly did both these companies believe this, that when the Australian government moved to introduce a law that forced the tech giants to pay for any news content they share, they threw their toys out of the pram in perhaps the most spectacular of fashions. At one point, Alphabet, the company which owns Google and which embraces with no hint irony the motto “Do the right thing”, threatened to switch off the internet, or at least its own search engine, if our Australian cousins went through with the law. Google ultimately backed down and began conversations and negotiations with media publishers. But Facebook – being Facebook – took it a step further, basically shutting down all news on their platform in the country. This included any media entity but many other pages that were nothing to do with the media, including some government pages used by health and emergency services. The country’s Prime Minister Scott Morrison called it a move by the social media giant to “Unfriend Australia” and “as arrogant as it is disappointing”. Anyone familiar with the Aussies will know they don’t take kindly to be pushed around, especially by two tech companies making billions in ad revenues while media titles close and journalists lose their jobs. That is a reality felt the world over. In the end the PR-gaffe made little difference, Bloomberg reported how r Facebook earned $86bn profi t amid a pandemic $27.19bn Facebook’s total advertising revenue in the fourth quarter of 2020LAST CHANCE TO BOOK YOUR SEATS TUESDAY 16TH MARCH 2021 JW MARRIOTT MARQUIS HOTEL, DUBAI WWW.LOGISTICSMIDDLEEAST.COM/AWARDS #LOGMEAwards CATEGORY SPONSORS FOR TABLE BOOKINGS, CONTACT: ANTHONY CHANDRAN TABLE SALES EXECUTIVE TEL: +971 4 444 3685 EMAIL: ANTHONY.CHANDRAN@ITP.COM FOR EVENT ENQUIRIES, CONTACT: EBONIE PLATFOOT EVENTS MANAGER TEL: +971 4 444 3689 EMAIL: EBONIE.PLATFOOT@ITP.COM FOR SPONSORSHIP ENQUIRIES, CONTACT: LINDSEY ALBA COMMERCIAL MANAGER TEL: +971 4 444 3524 EMAIL: LINDSEY.ALBA@ITP.COM FOR NOMINATION ENQURIES, CONTACT: JOE PESKETT GROUP EDITOR TEL: +971 4 444 3305 EMAIL: JOE.PESKETT@ITP.COM8 Vol. 22/03, March 2021 UAE start-ups Kuwait expats The UAE is witnessing an unprecedented momentum in the seeding of start-ups A ban on non-Kuwaitis entering the country has been extended by authorities “until further notice” Upfront NE WS IN NUMBER S Investment boost Khurram Shroff, chairman of Dubai’s IBC Group, said he has pledged 100,000 Bitcoin – current value of $4.8bn – to set up the Miami 2.0 Blockchain Strategy Foundation and other related joint venture projects. Shroff added that he hoped his backing of Miami 2.0 Blockchain could turbo-charge the use of the cryptocurrency. Market size According to research fi rm MarketsandMarkets, the global blockchain market size is estimated to rise from $3bn in 2020 to $39.7bn by 2025. While research from DMCC's Future of Trade found that blockchain could help reduce up to 20 percent of the physical paper costs associated with global trade, estimated at $1.8 trillion. Popular backers Tesla has added $1.5bn in Bitcoin to its balance sheet, while Mastercard and Bank of New York Mellon have moved to make it easier for customers to use cryptocurrencies, and Morgan Stanley is reportedly considering adding Bitcoin to its list of possible bets. Paypal’s Peter Thiel recently made it possible for users in certain jurisdictions to buy bitcoin. GOOD MONTH BAD MONTH The top news and business headlines from the region MAR CH 2 0 2 1 THREE REAS ONS WHY 8.4% $3bn+ STOCKS POPULATION Investment by KSA’s PIF in three US video-game makers The decline in Dubai’s population last year, S&P Global Ratings said With giants in the business world turning their attention to cryptocurrency, there are several reasons why it should no longer be considered simply as a volatile asset class Abu Dhabi residential real estate sector Despite the relative improvement in transaction activity in H2 2020, the general market sentiments remained subdued Why cryptocurrency is quickly moving into the mainstream r Bitcoin is estimated to transact $200bn per day by the end of 2021 0 600 800 1,000 1,200 1,400 CAPITAL VALUE TREND AED / SQ. FT, HIGH-END VILLAS/ TOWNHOUSES MID-END VILLAS/ TOWNHOUSES HIGH-END APARTMENTS MID-END APARTMENTS Q1Q1Q1Q2Q2Q2Q3Q3Q3 201820192020 Q4Q4Q4 Source: SAVILLS RESEARCH arabianbusiness.com 9 UPFR ONT Saudi Arabia has thrown down the gauntlet to Dubai with its latest announcement that its government and state-backed entities will not be signing contracts with companies that do not have their Middle East headquarters based in the country. For those familiar with How Saudi Arabia is throwing down the gauntlet to GCC countries Scott Cairns, managing director of Creation Business Consultants, discusses the effects of the kingdom’s move to increase pressure on international fi rms to shift their Middle East hubs to the country business in the Middle East, this is an obvious step towards bolstering KSA’s standing as a regional business powerhouse. We anticipate that the move will pose a direct challenge to those companies currently headquartered in Dubai, interested in winning Saudi government work. AB ONLINE S OCIAL AND DIGITALS U B S CRIBE: VIDEO Private wealth held in Dubai is estimated at $517bn According to New World Wealth data, 35,000 high net worth individuals are thought to have migrated to the UAE in the past 20 years THE STORY Saudi-backed health app ends China deal, focusses on US growth UK-based mobile medical consultation service Babylon Healthcare has pulled back from China after ending a partnership with Tencent Holdings COMMENT q Dubai sure will live up to the real estate challenges effectively than most other nations” Arabian Business reader NV Reddy, on his views on the story ‘Damac reveals over one billion dirhams in losses for 2020’ ArabianBusiness THE EXPLAINER MAR CH 2 0 2 1 Dubai-headquartered companies will need to re-evaluate their regional presence and do the math on what this announcement could mean. Those companies that are budgeting to profi t from awards out of the giga-projects over the coming 5-10 years will need to do a calculation on what u One factor to consider is the ability to attract talent should a company’s headquarters be moved to KSA, Cairns says work they will be potentially foregoing if they shift. It will be interesting to see if there are counter- announcements made from Dubai, in which case multi- nationals will have a tough decision on their hands. One large factor to consider, outside of the monetary value of contracts, is the ability to attract talent should a company’s headquarters be moved to KSA. Dubai has long been a favoured location for expatriates due to its more Western-like approach to foreigners. While the kingdom has been making its environment more liberal, it remains to be seen if that will go far enough to attract some of the top talent that has called Dubai home for a long time. If many of the large multinationals do look to relocate, we would anticipate that those Westerners not willing to move will boost the local talent pool as they wish to remain where they have called home for years. Overall, it is a bold move that will see multinationals re-evaluating their projects pipeline and talent pool to see if they make the large step in the coming years.Next >