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Bloom Holding embraces international partnerships to develop integrated communities with best-in-class health and education

Interview - October 23, 2015

Sameh Muhtadi, CEO of Bloom Holding, analyzes the different real estate market trends in Abu Dhabi and Dubai, and welcomes the steps forward undertaken by the government to provide investors with protection and transparency. He also explains Bloom Holding’s unique partnerships with American and British institutions in health and education. 



What would you identify as the reasons why financial actors in the US, for instance hedge funds or banks, should look at the UAE’s real estate as a potential market to invest in right now?

We’re the most stable country in a very rough neighborhood. What the UAE offers, more than any other country in the Middle East or beyond the region for that matter, is ease of doing business, rule of law, good governance, healthy economic indicators, political stability, and security. That’s what everybody looks for in terms of investment. And the UAE now has a track record of success.

The next phase, the way I see it, would involve investments in industries and businesses that actually are more than the consumer. I’ll give you an example. Noor hospital: that was an investment here in the UAE, very successful; there was a private equity that invested in it. They restructured and improved the performance of that hospital. It was one of the first companies to be listed in the London Stock Exchange.

More than 70% of investors in Noor Hospital are actually international investors looking for an interesting place in emerging markets. And when you talk about emerging market, I don’t think there would be any other country that would provide the kind of opportunities that we have in the UAE.

We see that the example of this Noor healthcare model is just the beginning of what’s going to happen in the UAE over the next few years. I can see us implementing the same model in education, as a provider of education. We already have people that are interested in investing in Bloom Education as well as Bloom Healthcare. We see us being more and more appealing to international investors.


The UAE after the 2008 crisis ranks as the second best country for residential investment according to Savills, after the US. However, we can see different trends among the emirates. CBRE, for instance, reports an annual price slump of 12% in Dubai, while it reports a 10% increase in Abu Dhabi. What is your perspective on these different trends?

Our experience matches those numbers. We have projects in both Dubai and Abu Dhabi, and it is interesting to see that Abu Dhabi continues to grow; there continues to be solid demand for real estate at a time when you can describe the situation in Dubai as having softened over the last year. The difference is that the number of projects in the pipeline in Abu Dhabi is much lower than what has been announced in Dubai.

In Dubai, the announcement that there are no less than seven or eight mega-developments gives the investor various options, such as to choose, to wait, or to compare. Abu Dhabi doesn’t have that much in the pipeline; there are major developments but it is a fraction of what is offered in Dubai. We have seen the results of our launches; we are witnessing massive success in Abu Dhabi. I wouldn’t say we were not successful in Dubai, but certainly to a different extent.

At the end of the day, it is always a matter of supply and demand, which is linked to the economy and the stability of the market. There are common elements: a healthy economy, security and stability in both Abu Dhabi and Dubai, but the drivers are demand and supply, no question about it.

Still mindful of the bubble that burst in 2008, investors are taking a cautious look ahead towards 2020. How do you think the Abu Dhabi government has responded in the aftermath of the crisis in order to ensure long-term sustainability and investments? Does the new law passed recently in June go towards that direction? 

A hundred per cent. Anytime the government provides protection to investors, or anytime the government provides transparency to the transactions between the real estate developer and the user, it is a healthy development. We had already voluntarily implemented much of what is included in the law. We think it’s smart business, a fruitful way of building trust with our clients.

For instance, one of the new regulations regards the escrow account. It is about the money going to an escrow account that you can only spend on the project, based on your progress. That is a practice that we followed even before the law was enacted. I think this law will be a very healthy element in terms of enticing further investment in Abu Dhabi. This is also in consideration of the fact that Abu Dhabi has much less freehold availability of property than Dubai. We talk about demand, but the availability of freehold property is much lower than what is available in Dubai, and that’s a key distinction between the two markets. 

Real estate developments are linked with the growth of the population, which in Dubai specifically is around 5%. Expo 2020 is expected to attract 20 million visitors and many think also long-term investors. What are your expectations regarding this global event and what opportunities may arise from hosting Expo 2020 in the UAE?

Many opportunities: first of all, in order to prepare for Expo 2020, you are creating close to 200,000-250,000 new jobs. That means you have so many new families relocating here, which has of course a positive spillover for our industry, but it will also boost the rest of the economy in the whole country.

Expo in itself will attract the 20 million people you talked about. Dubai currently has close to 15 million visitors annually. So if we add the expo visitors to our current figures in terms of tourists in Dubai, we are talking about 30-35 million visitors.

Exposure to Dubai is going to be the biggest value that the Expo provides. A lot of people, although they hear about Dubai, will now have the incentive to actually come and see what it is all about. And I agree, these 20 million visitors are not only tourists. They are potentially decision-makers, investors, or businesspeople looking for an opportunity to move here in the medium or long-term.

The opportunities that can be developed as a result of these numbers are tremendous. Just consider the supporting industries that have to cater for Expo. The most obvious is hospitality, as you obviously need to ramp up the ability to host all of these visitors. In addition, you have the organizers, transport and catering companies, and so on. All of this is going to lead to a noticeable growth in the economy.

But on the flip side, if we look at the challenges posed by this global event, do you think there is a risk of an oversupply of properties, especially in the hospitality segment?

It’s possible, and it’s likely that you might see it in certain sectors. That’s why investors have to be careful about where they invest. They need to be more careful and look at their investment opportunities with healthy returns in the long term, rather than focusing on a target year. Real estate, by definition, is a long-term investment; you can’t plan it for a single event.

There’s been a rush to build hospitality outlets, hotels and resorts. There are still opportunities out there especially in the two-star, three-star front as well as on small boutique luxurious hotels. But I would not be investing in a four-star or five-star hotel in Dubai or Abu Dhabi at this stage to be honest.

If we talk about Bloom now, what is the common dominator of your landmark developments such as Park View, Abu Dhabi Marina and Stella Maris? How do they fit into Bloom’s strategy to tap into the new opportunities that the market provides?

It’s a good question. Our vision is to provide the highest quality of services to our investors. We believe that we can’t limit that to a roof over your head, or a nice living room and a nice kitchen. It’s about your life experience as a whole. So, in addition to providing the best-in-class housing units, we offer the best services that go along with the unit itself, and the community we want to create all around it. We provide the best health care services for our clients, and the best nurseries for the children. Moreover, our clients can also send their kids to the best schools from childhood through graduation.

In order to do so, we partnered with the best-in-class partners in each of these industries. On the education front, we’ve partnered with three entities that are, without doubt, the best in class: Brighton College is our provider of British education. They were rated last year as the number one co-ed school in the UK. Their results were the highest ever in the UK, historically: in the graduating class, the number of students that attained A and A+ grades was the highest ever by any school.

It’s very easy to bring a franchised educator that basically gives us the name and then becomes an economic or a financial investor. But that’s not our idea. The idea is to truly provide the very best of education by bringing the operator. The operator is fully empowered on how he sets the curriculum, which books students need to buy, the teachers they employ, and even what salaries they pay to those teachers. We don’t interfere in that. We provide the facility with the related services. We are not the experts in education; we give the privilege of delivering that service to the experts in that field.

Moreover, we have reached an understanding with the Dwight School of New York. It is probably the top-rated private school in Manhattan. They have an American curriculum with IB. We feel that that segment of education is in the highest demand here in the UAE, and we are embarking on establishing two schools with Dwight. The first will be in Dubai within a month hopefully; and the following school will be here in Abu Dhabi. It’s a market segment that has tremendous demand, and again, we are bringing one of the best-in-class operators also for the American curriculum. We are very happy to have Dwight as one of our potential partners.                     

And we apply this same principle to everything that we do, because we feel that’s how the experience should be with our clients.

With hospitals now we’re bringing some of the best eye care ophthalmology hospitals. We’re on the last stages of finalizing a deal to start a greenfield hospital in Dubai, within Dubai Healthcare City. We have an understanding with Boston Children’s Hospital and Brigham and Women’s Hospital, Harvard University. Once again, best operators in their field: Boston Children’s Hospital has been rated number one in the world for the last 10 years.

These are the kind of partners that we engage with. We would like to bring that quality to the UAE. The emphasis on improvement is natural here in the UAE. But there’s always room for the best of quality and that’s what we’re trying to do.

The UAE is really pushing forward the Smart City agenda. What kind of sustainable or smart measures do you take into account during your master plan for your developments here in the UAE?

In the UAE, the regulatory framework for the construction industry in terms of sustainability is very well developed, and it’s rated as Pearl 1 or Pearl 2. Pearl 1 is probably the best you would find in the US or in Europe. Pearl 2 goes beyond that, to even more demanding and more sustainable construction practices and products. We’ve implemented that on all of our projects. The least we have would be a Pearl 1.

We are developing a hotel now in Al Bateen district; it’s an Edition hotel. I was looking at some of the construction technology that was utilized there – it’s pretty amazing. From the size of the foam walls to bring down the cost of energy consumption to the recycling of the water for landscape irrigation; all of these practices we implement are smart and they go hand in hand with our vision to provide the highest quality possible.

You’ve been appointed also to drive Bloom’s international expansion. What would you say are the markets with the highest growth potential and what can the US market represent for Bloom’s expansion?

I read there are $30 billion of investments from the GCC in the United States this year. That is because of the same elements that would encourage anyone to invest in the UAE, would encourage UAE business people to invest in the United States.

The reason why we decided to invest in the US is that we’d like to provide the experience that people have in the UAE to those same groups of individuals who go to the United States for something like healthcare attention. The development that we have in mind is in Rochester, Minnesota. It is a town of 110,000 people, of which 60,000 work for an institution called Mayo Clinic. It provides some of the best medical services in the world; but we found through our study that it’s lacking in other areas. It’s lacking in leisure, entertainment, quality of hospitality and so on.

Rochester recognized that and they’ve embarked on a five-year program to improve the image of the city. Associated with that, there are a lot of tax incentives, and for us that was an opportunity. We have many clients that go from here to Rochester for attention; we take care of them while they’re in the US. At the same time, we can provide Rochester with some services to help it to become a world city that can compete with the likes of Singapore, with Cleveland Clinic in the US, United Methodists, or John Hopkins in Baltimore. That’s an example of an opportunity that we have seized.

Dubai is now one of the most recognizable cities in the world, but its brand is mainly associated to opulence and luxury. What else can the UAE offer? What are the aspects of living here that surprised you the most?

The progressive attitude of the government, in its interface with the citizens, facilitating the services, and expediting licenses is very unique. I think it’s a model for the rest of the world. Yesterday, I was at the Notary Public. I finished signing a document. Within two seconds I got a message on my smartphone saying: “Thank you for visiting and conducting business at the Notary Public.” You can pay your bills in the mall, renew your license anywhere you want. This ease of living and the perfection of the services that are provided by the government and the private sector is truly something special.