Put on your seatbelts, here we goJune 23, 2015 9:00
On Property: Ali Lootah, Chairman, Nakheel
“Nakheel was a different ball game, it was a big challenge and an honour,” says Chairman Ali Lootah, talking candidly with Kipp about his early days in the company and the trials that soon followed.
February 2, 2012 4:32 by Eva Fernandes
“My personal belief is, if you have a serious determination, any problem can be solved. Patience is very important, people have to be patient and we [Nakheel] have to be patient. And this is really what happened in Nakheel” says Ali Lootah, sitting in a plush office at the Nakheel Sales Office.
“I can confidently tell you Nakheel changed a lot because of our patience and also our persistence in delivering our commitments and collecting our (dues) and defending Nkaheel’s rights. Some people weren’t pleased with that, but we honour our contract and we expect the other party to honour their own contracts.”
Lootah, not so subtly, is referring to the ongoing service charge controversy surrounding Nakheel’s decision to ban non-paying tenants from access to the pool and beach. Tenants and land owners claim foul play, but Lootah, with much satisfaction, tells me that since the ban, Nakheel has managed to collect 40 percent of what is owed to them.
The current service fee struggle is just one of many challenges Lootah has had to deal with since he was appointed Chairman of Nakheel in March, 2010 replacing Chris O Donnell. And with plans to go through similar procedures in the company’s other projects, it looks like the struggle will continue.
When I ask him how challenging the appointment to the position of chairman to one of Dubai’s most troubled real estate developer was, he starts to laugh: “No comment!”
His laughter renders some of this his words incoherent for a while, but soon turns appreciative: “No comment, but I can say I am honoured to be chosen to head Nakheel. It is my duty and my obligation to help my country to recover and I was honoured to be asked to do that. That is why I committed my time and my effort to do that and I am very happy to see this happen.”
THE TOUCH GETS GOING
Nearly 18 months after Lootah was appointed to Nakheel, the company completed a $16 billion debt restructuring in August 2011. Nakheel, which was previously owned by Dubai World, is now wholly and directly owned by Dubai government. After 18 months of negotiations, Nakheel marked the last of the debt restructuring plans when the company announced a Dh4.8 billion sukuk to its trade creditors to be listed on Nasdaq Dubai.
Lootah talks of the restructuring with a weary but relieved sigh: “When the going gets tough, the tough get going. This is a great journey; it is really something enjoyable when you see a company really turning around.”
The toughest aspect to the debt restructuring? “The contractor issue was the biggest challenge. It was really the biggest challenge because we had to go through (a lot of) details to get the contractor to agree to sign the restructuring undertaking then to sign the restructuring agreement because all these were the threshold for the lenders. To get the lender to sign, we needed to get the contractor to sign. So it was the biggest challenge.”
Looking back, I ask Lootah, was the property crash in Dubai something that could have been predicted or dealt with differently? Lootah shakes his head dismissively: “I would disagree. It [the property crash] did not affect only Nakheel [but] the whole world. In Dubai there was a huge demand, even until 2007 and 2008. So to put myself at that time, in that position, it would have been difficult.
“In 2007 people were queuing here (at the Nakheel Sales Office) trying to buy property. There was an international crisis, a global crisis and Dubai is part of the globe—it is not an isolated city.”
WE CALL THEM LONG-TERM PROJECTS
As someone who has been critical observer of the real estate market here in the UAE, this interview has provided a new perspective on the Chairman. Though perhaps, Lootah is quick to gloss over the challenges Nakheel is facing (expectedly so as a media trained head of a company), he does display a somewhat brazen sense of humor. When asked about the projects that have been delayed or cancelled, without a blink of the eye and with a small smile, he says: “We call them long-term projects.”
There is also an undeniable air of exhaustion about Lootah’s manner. When I ask him about this, he tells me he goes for a brisk six kilometers walk after his daily morning prayers to relieve stress. His business mantra is to stay patient and positive-which is probably why it is unsurprising that he ends his interview with a cheeky teaser:
“You will be surprised, we will be announcing a very good profit this year!”