GulfNews Business

Dubai developer Damac confirms Farooq Arjomand as Chairman in place of Hussain Sajwani

Property|: Dubai: Damac Properties has confirmed Farooq Arjomand, as the new Chairman with immediate effect, following the stepping down of Hussain Sajwani, the company's founder, from the role. Arjomand had been Vice-Chairman at Damac. It was last week that Sajwani confirmed he was quitting the chairman’s role, given the likely conflict of interest involved in his investment company buying up the 27 per cent stake held by outsiders in Damac. Sajwani’s Maple Invest has formally made its pitch for the takeover to the Damac Board of Directors. Sajwani did not want to be heading the Board that was to take a decision on the Maple offer. (He owns 100 per cent of Maple Invest, which is registered in British Virgin Islands.) There was some talk in the market that he may still choose as the new chairperson from within the family. Who is Farooq Arjomand? A banker by profession and standing, Arjomand was one of the founding members of the board at the Dubai mortgage services provider Amlak Finance. He currently heads the Arjomand Group, which has diversified business interests. He started his career at HSBC in 1984 and went on to spend a further 17 years. What next for Damac and Sajwani? Damac has confirmed the appointment of an independent committee of its Board of Directors to review and assess the Maple offer, which prices each outstanding share at Dh1.3. Maple has already made it clear that this price is final. The Board of Directors also approved Al Tamimi & Company as legal advisor, while KPMG Lower Gulf Ltd. as the valuer to Damac. Arqaam Capital ltd. will be the financial advisor to Damac for the purpose of evaluating the offer from Maple. Maple will shortly be issuing further details regarding the opening and closing of the offer period. It will set its target on taking Sajwani’s stake to 90 per cent at the earliest, which will allow it to initiate the process to unilaterally pick up the remaining 10 per cent.

GulfNews Business

UAE's fintech sector is getting its 'eureka' moment: Adeeb Ahamed of LuLu Financial

Banking|Analysis|: Technology has made possibilities infinite. The speed of consumer-to-market and vice versa has greatly advanced, benefitting businesses in sync with evolving social behaviors. Reaping its rewards the most is the fintech sector, which has surfaced as a destination of sorts not just for banks, finance houses and traditional FIs, but also for social media giants and tech companies, each looking to tap into new-gen consumers through one of many unsolved pain points. Identifying and solving consumer pain points is nothing new, but in the case of a sector as regulated as financial services, there are several pitstops and pitfalls towards creating a standardized user experience. This is as much a problem as an opportunity, and for every new consumer-facing fintech company basking in the limelight, there are hundreds of B2B tech companies sprouting in the background. The ones silently advancing the areas of user experience actually power the fintech engine. These B2B players, unknown to the larger public, provide the nuts-and-bolts for the industry. They may not be fully regulated, but remain aware of the industry norms, in a way that allows the popular consumer-facing platforms to rollout their services without worrying too much about the backend processes. Read More FAB’s Magnati partners with Al-Futtaim to offer Buy-Now-Pay-Later at IKEA online UAE-based payment app Ziina raises $7.5m Potential of micro-tasks How significant are they in the context of the rapidly maturing fintech revolution? For that, let us step back and evaluate where these companies fit into the larger scheme of things. Consider a payments app, where the user journey can be broadly divided into four major tasks: 1) self-onboarding and user login; 2) capturing the beneficiary and transaction details; 3) executing the transaction; and 4) post-transaction enquiry and support. In its most basic form, the first task may seem like two simple actions, but breaking it down reveals multiple micro-tasks, mostly around the areas of e-KYC, app security, user validation, etc. Each of these micro-tasks are tech-intensive and a multi-billion dollar vertical, of which e-KYC is the newest unicorn involving multiple technologies bundled into a unified ‘Software-as-a-Service’ model. A single app may act as the user interface, but businesses providing the critical backdoor processes have come to rightly hold their own within an otherwise highly competitive ecosystem. Visibly then, there are several tens of micro-jobs waiting to be solved, each of which has emerged as a potential business vertical. No monopoly in the making The good news is that the industry’s scope prevents the B2B segment from becoming a monopoly of sorts. There is no one-size-fits-all or winner-takes-it-all scenario. Building efficiency and constant innovation around these micro-tasks is a necessity at this stage, and this offers a welcome scenario for start-ups and tech companies looking to get a foothold into the sector. Public-private intervention From the perspective of the MENA region, the growth of these enabler-companies holds great potential - and greater purpose. As the pandemic has revealed, the region requires innovation at the highest level, if only to service the urgent need for accessible digital solutions that can bridge the gap in matters of financial inclusion. The region’s stakeholders know what works best for the finserv ecosystem here, and public-private cooperation in building the sector’s nuts and bolts can be an incentive to get the larger consumer-facing companies to invest in the region. Early indicators look positive in this regard, with studies suggesting that the number of fintech companies in the MENA region will leapfrog by 2022. It would of course be more encouraging if a good proportion of these have the capability and backing to build tools that can advance the sector’s grassroots. Built-in advantages In this regard, the UAE already stands tall with a major advantage. Singapore, UK and Hong Kong have been making a series of reforms to attract the best fintech talent to their shores. And similarly, the UAE’s world-class infrastructure, easy access to funds and superior living conditions put it in a position of strength to groom the ever-growing open banking ecosystem and become the innovation hub the MENA region so requires. The DIFC FinTech Hive and ADGM are already home to several companies working in areas of contactless payments, digital identification, corporate solutions, and data management. All of which are sub-sectors solving one of the many pain-points for consumer-facing fintechs. The fintech sector of 2021 is ripe for the taking, much like the formative years of the modern financial sector two centuries ago. The time is right for the UAE to exert greater influence and build on its strengths to set itself up as a regional hub of the ecosystem’s tech backbone. This will ultimately attract the right tech talent and catapult the country to a position where it can play a bigger role in the region’s vision for greater financial inclusion. Adeeb Ahamed The writer is Managing Director of LuLu Financial holdings and Vice-Chairman of FERG (Foreign Exchange Remittance Group).

GulfNews Business

Dubai: After luxury homes and villas, will affordable homes too start seeing price increases?

Property|: Dubai: Here’s an alert for property buyers - prices of even the more affordable homes in Dubai could see a 10-12 per cent spike before year-end. Developers will have no option but raise their asking prices on ongoing projects if the cost of steel and other building materials continue to soar. New luxury villa prices have already seen fairly sharp rises since the beginning of this year, through a combination of higher demand and from the cost of construction. If more affordable homes also start turning costlier all of a sudden, it could dent demand at a time when the market is seeing a bounce back. “Prices of steel and cement have increased 35 per cent and 20 per cent, respectively, in the last eight or 10 months,” said Kalpesh Kinariwala, Chairman of Pantheon Development. “The rest of the building materials have more or less increased by the same levels. This resulted in a 6-8 per cent construction cost escalation.” So far, offplan property buyers have not felt the increases as developers refrained from passing on the costs. But if the current rate of increase in building material prices continue, they may not have that option for long. So far, “we optimized our operations to negate the effect - hence our existing project costs have not seen a major impact,” Kinariwala added. “We managed to hedge at least 70 per cent of the construction cost.” Kalpesh Kinariwala of Pantheon: "I disagree that prices in Jumeirah Village Circle have remained subdued - offplan sales are up 96% year-on-year, from 698 apartments in 2019 to 1,317 in 2020. For 2021, we can easily forecast offplan sales growth of 20% to about 1,800 apartments..." Image Credit: Supplied Feeling price pinch Over the last three years, property values in Dubai dropped by an average 15-20 per cent set off by lower demand, persistent worries about oversupply in some categories, and a slowing economy. Developers had adjusted their prices in response – which is why when building material prices shot up all of a sudden from October last, they got hit with a double-whammy. “While we were in the midst of awarding a contract, the spike was noticed in prices of steel, copper, cement/concrete and even supplies like white goods, elevators, etc.,” said Vijay Doshi, Chairman of Vincitore Realty. “In fact, on all shipments coming into the UAE. “The pandemic situation also has contributed to the price increase as there have been lots of scarcity of resources. We are left with no choice but factor the higher cost for project completion.” Suppliers won’t budge It doesn’t end there. “Fuel prices are increasing; all raw material prices, especially metal, are also higher, which creates a domino effect,” said Doshi. “There is an acute shortage of containers to get shipments from oversees. Add to that the increase in freight costs, which is directly impacting the cost of materials used in projects.” Which is why Doshi says it’s inevitable that the price of the end product – the new homes being built or delivered – will inevitably see some impact. “We have already seen a spike in Dubai’s residential project prices,” he added. “Customers do acknowledge and understand market conditions. “The market has become so volatile that building material suppliers have become conservative. They twill let the order go but they won’t reduce their prices. “There is no room for compromise in quality. So, to counter market-driven increase in costs, the change we are bringing in are cost optimization through alternative materials to keep costs down.” Vijay Doshi of Vincitore Image Credit: Supplied Take on direct control Indeed, developers are starting to take direct control of their projects. Late last year, Azizi Developments caused a stir by stating that it will do all the ordering of supplies rather than let the main contractors do it on their behalf. This was done to bring down project cost and time overruns. It helped Azizi speed up decision-making, and in more ways than one, helped stabilize their construction-related costs. Impact on new launches The higher cost of building materials will be another factor that developers have to factor in when they decide on new offplan launches. While demand for premium homes can withstand sharp increases in values, it won't be the same in the mid- and more affordable categories. Developers will have some tough decisions coming up…