Ammar Shata on Saudi real estate | Al Khabeer Capital

Transcript

The government of Saudi Arabia has enacted the third of five regulations announced to shake up the country’s underdeveloped real estate sector. Ammar Shata, Executive Director and CEO of Al Khabeer Capital, and World Finance Man of the Year for 2012, joins World Finance to discuss.

World Finance: First, what is the Saudi government hoping to achieve with these reforms?

Ammar Shata: They are hoping to achieve reforms in terms of competitive advantage. If you want to compete in this kind of world, you have to be sure that you have the right reforms. We’re still yet at the beginning of what we need in terms of social reforms, political reforms, and even human rights reforms, and for that reason I think it’s a good start. If you heard the news recently, we’ve changed the weekend from Thursday and Friday, to Friday and Saturday, women’s rights is improving in terms of allowing them to be part of the political system, and obviously the mortgage finance which was announced earlier in the beginning of the year.

“What we need is an improvement in terms of social needs”

World Finance: And there’s still some work to do?

Ammar Shata: Definitely. We’re a bit slow, we need to move a bit faster, the world is not standing still. What we need is an improvement in terms of social needs, in terms of people sharing in the political system, in terms of human rights, and definitely women’s rights. We see improvement, but definitely, I do not believe any nation can sustain this economic progress and improvement without having its people sharing in the decision making.

World Finance: So what can investors expect from the Saudi real estate sector in both the medium and long term?

Ammar Shata: Well it’s usually between the supply and demand of real estate, there’s about 3-4 years gap. We’re in the beginning of a serious demand for housing, because 65 percent of the Saudi society is below the age of 20, and that means that there is a lot of need for housing in the coming 10 to 15 years. The worry is about euphoria so you want to be sure that in the coming 3-4 years, you are part of the supplying side of the chain of properties into the market that is needed by the society. And this is why Al Khabeer is focussing on asset under management that is real estate basically development, and income generating, because we see this part of the expertise for the Saudi market is an important topic.

“Islamic finance is about fairness, you have to put fiduciary duty into perspective”

World Finance: Now tell us a bit about your background, World Finance has named you Man of the Year in 2012, but you actually got into economics by accident?

Ammar Shata: Yes it’s true. What happened was my advisor at University of Southern California, while I was studying Electrical Engineering, forced me to take an economics course. It was a graduate course, and I did so well I was actually number one in the class, and I amazingly found out I’m pretty good at this topic and I’m enjoying it, so this changed my career to start my Masters degree in Economic and Financial Planning, and here we go, I’m here.

World Finance: And here we are, you’ve created Al Khabeer to offer shariah-compliant investment vehicles- how important are Islamic finance principles to you personally?

Ammar Shata: There’s two dimensions to it, for me, developing the community is an important issue, and Islamic finance is part of that requirement. Islamic finance is about fairness, and for me financing you have to be fair, transparent, and you have to put fiduciary duty into perspective. For that reason, Islamic finance is an important element to Al Khabeer to its people and to its shareholders, and we think it will definitely help in developing the community, which is the final and most important aim for all of us.

World Finance: And now the firm manages assets worth $500m, what would you say is your greatest achievement so far?

Ammar Shata: I think it’s three elements, the first one is the fact that we’re growing at a difficult time. We’re growing at 40 percent per year for the last three years, at a period when a lot of companies are going bankrupt. It’s also an environment where a lot of people have recognised that it’s the best environment to work for- we won for the third year consecutively the best environment to work for in Saudi Arabia, and lately we have been ranked one of the top in the middle east in terms of people management and taking care of our people. And obviously the third one is to lead into the Islamic finance, and that’s Alhamdulillah, we will be successful.

“Hire the right people, and to allow them to perform”

World Finance: And finally, being our incumbent Man of the Year, tell us the best piece of advice you have ever received?

Ammar Shata: It’s to hire the right people, and to allow them to perform. If you don’t have that, you really can’t be calling yourself a good CEO.

World Finance: Ammar, thank you

Ammar Shata: Thank you.