♪ francine: what do the world's tallest buildings in the middle east and commerce have in common? they are all owned by billionaire mohammed alabbar. his investments have become iconic landmarks and he has diversified in hospitality, retail, and e-commerce. he was named the most influential man in dubai and consistently ranks among the top five most powerful arab leaders. it is not all business all the time. he is also a sportsman, an

active member of the emirates horseracing community. today, we meet mohammed alabbar, the founder and chairman of emaar properties. thank you so much for joining us. you have really built a conglomerate. you have built a company that has multiple interests, muliple units, multiple portfolios, did you diversify because you saw opportunity, or because you had to? mohamed: we all look at opportunities where we don't have to do anything. looking at the middle east and the industries that i went into, with my team, i think we saw amazing opportunities in the middle east and sectors. i am glad that even though we had difficult years, the past two years have been difficult for us, still these businesses are operating well. differently it is based on opportunity sectors. francine: where do you see the

most growth coming from? which portfolio, which part will do better? mohamed: the food operating world is strong. the region as a whole. especially with the food delivery business. that's another story. last year we grew about 28% in the region. our e-commerce business is something that is very, very interesting. we have an amazing team looking at it, that is also growing fast. even with this growth, one has to be realistic. you look at the growth and what's going on in the middle east, government policies, the world economy, what changes might take place. you have to be alert. francine: what does that mean? do you expect the growth to look at e-commerce? we will talk a little bit more about that. do you expect it to go threefold. fivefold? five years?t mohamed: i would say our real estate business should continue to grow

at about 20% a year. that is shareholder expectation. it is hard work to achieve that number. costs, control, margins under control. political and macroeconomic issues in hand. i think we should be around 10% a year in the region. keep in mind, we are talking about the middle east, there is need for most industries to grow just because i think the middle east still has room to grow. look at the population and as well, and east the whol demographics in our favor. francine: because they are young, these youts, they will spend a lot more in five to 10 years. how will the economy shift? mohamed: the economy will shift positively, because the governments are working harder than any time in the past.

you see positive changes taking place. in saudi arabia. that is the same thing within the uae. i am quite interested in egypt. place in anges taking egypt. with all the other issues we have in the middle east, i believe things are going to get any worse than this. we look forward to a more positive trend in policy and politics and economic growth. francine: in terms of growth country by country, which is a country that will outperform the others? mohamed: the majority of our focus is saudi arabia, uae, egypt. i would say egypt is growing faster now. saudi arabia is optimistic with the changes you see taking place within the coming 24 months. i think you'll see quite a good trend. and the u.a.e. as well. you have the other arab countries, some are slow, some moving forward.

the majority of our businesses are in these countries. francine: you are holding an investment the pif on on e-commerce for saudi arabia. will there be more property in property for example, in saudi arabia? mohamed: they are also with us in our food business. are we going to do more together? i think there is a possibility. there is a lot of work they are doing in saudi arabia. and outside saudi arabia and the region, and outside. i would expect maybe we should look at real estate as well, looking together saudi arabia looks interesting. francine: how much can property in saudi arabia grow? mohamed: it is at it's infant stage. if you talk about pure infrastructure, retail, industrial, hospitality, you residential. just have to make sure you are in the right category of retail. there is plenty of room.

to go that way. francine: when you look at how you spend your time for each of the units and countries, how do you keep on top of it all? mohamed: i try. i still say it takes a majority of my time. francine: is that 50%? mohammed: it takes about 40%. the rest is split. you know what takes a lot of my time? the food takes the least of my time. the team that sits on top of the business is world-class. they know the industry well. a vibrant team, a new organization. i need to give it more time. my real estate business, i have an a team. i'm emotional about real state. francine: this was the foundation of it all. do you still see it as your baby? mohamed: i think my name is

linked to it more than anything else while all these other businesses have been with them for about two years. it is a new brand of products associated with me. francine: when you look at the ipo's and units, was it to unlock value? do you ever feel like it is high risk? mohamed: mainly to unlock value we have investors who have put in their money with us to get rewarded. at the same time it, i really like being under pressure, i know you are out there in the public eyes under pressure to perform. mainly, value creation is the business we are in. francine: value creation, what, what shareholders understand you do more, it almost focuses mind of managers more? mohamed: that is one. many of our units are under the mother umbrella. they are not fairly valued. we put them on the side and that separate entities from you create better value that way and cash out. and put management under pressure. francine: are you looking at

ipoing any other units? or portfolios? mohamed: we have india, our hospitality business, turkey, another business in saudi arabia. the reality is you can take all of these businesses public at the right time. within the coming three years, we will probably have india going public. hospitality, as well going separately. the public route. francine: how much bigger will you be? i hope to speak to you before but if i speak to you in five years. how much will your holdings be worth? mohamed: we should be double in value. we should have grown 20% to 25% on an annual basis. hopefully my management and my boards put that as a focus. i think we are capable of doing that. we just have to focus and make sure we have the right people. we do this day and night. that is how we do business.

region. francine: acquistions or organic growth? mohamed: i would say organic growth. we haven't done much acquisitions. i am expecting we do more in the coming two years. francine: coming up next, going from bricks and mortar to retail. the push into e-commerce and how his company could become the amazon of the middle east.

francine: mohamed alabbar is not only a titan of property, he is betting on e-commerce. his startup noon launched operations last year. it is described as an e-commerce platform, and is riviling amazone, looking to take over 15% of the growing market.

one of the biggest growers is saudi arabia's investment fund, which put out $500 million. he is not competing against amazon, he is also in the luxuries you he will offer a premium retail service to the middle east. mohamed alabbar, do you ever feel there is a conflict? you own dubai malls, but are trying to sell on e-commerce platforms? mohamed: they should be irrelevant. i don't think it is a conflict or not, but whether you are relevant. saudi arabia is relevant. the economy is becoming so digital. if you are not acting to do something about it, there is risk of your business being in huge danger in the coming 24 months. francine: how do you stay relevant?

mohamed: i think staying relevant - first of all, i need to talk to my kids all the time. and i learned from them. what type of world is this? therefore, i think all about this from real estate, retail, hospitality, the digital seen is changing. when you talk about e-commerce, it is moving your business to the digital scene. the economy is moving that way, from health care, education, retail. therefore, we just want to be relevant. at the end of the day there should be a collaboration or connection between the real world and physical world. can we reprise to find a solution and work together? relevant in all business. francine: how much of your sales will be done on your e-commerce

platform in five or 10 years? for the middle east, are you set behind in selling? is the potential bigger here in europe or the u.s.? mohamed: when i look at the middle east right now, e-commerce is between 1.5% to 2%, tiny compared to the rest of the world. there is room for all of us to grow. where will this be? i think it will grow much faster than the rest of the world. it will get into the 10% to 15% quite fast. graphition he demo of the region. we owe it to our society, they are a native organization that looks after the sector and participates and learns and serve. francine: what will noon become? are you nervous you are going head to head with the most successful retailer of all times, amazon? mohamed: it will be an

ecosystem. am i nervous? of course i am nervous. i am nervous for everything. in my real estate business i am nervous, in my e-commerce business i am nervous because competition is severe. markets are open, anybody can come in. more people are going to come to the region. i think it is our duty to participate in the scene. we are a bit tribal, which means i am from this society, i have a duty. be aggressive, achieve numbers and success. that is a duty that i feel responsible for. competition is good for the be aggressive, achieve numbers consumer in the region, rather than one player coming in and controlling the like of our customers. it is fair to have competition and let the customer win at the end of the day. francine: how will you go against amazon. you have to convince retailers to sell on your platform.

instead of amazon platform. is it a price war? how do you see the fault line? mohamed: we are working with local retailers as their partners. how other international players do it, it is sourcing overseas, or working in some other matters. that is their business. we differ, our partners are local retailers. maybe our margins will be smaller, but that is ok. we would rather win on the long-term. rather than alienating the local retailers. will there be a price war? there will be, customers are winning. everybody is 20% off, 15-10% cheaper. in some of the products. i am happy people in my region don't have to buy a meal for the kids that is 10% more expensive when there was one monopoly controlling human life. this is good for all of us. there'll be competition. the amazing thing is the world is open. so much new

technologies are being provided to everyone that wants to go into this scene. are you planning long-term? do you have good people with you? it?you serious about are you willing to provide a quality service? francine: is it the service or product? how does the middle east shop? what is selling at the moment, what will sell in 5-10 years? mohamed: when you look at the mix of what is happening with the e-commerce scene, it is an different from what is going on in the world. people want delivery, quality. francine: will they pay for delivery? mohamed: for the time being we are subsidizing delivery. as i said, people are just learning it. that's what global companies are doing, we give it to you first, then it takes margin, may be controlled market. people want it all, quality, value, consistence, delivery time that is fast, and a product they want with changes from one month to another.

if we have to provide that and get ready to provide the new thing. that may happen next month. francine: how important is market share at the beginning so people get used to your platform and not amazon? mohamed: market share is important. at the begin, you have to get aggressive, and probably provide the best service ever. you will be cutting prices. we see it. it is a live competition. there's nothing wrong with that. the good thing is the market is big enough. two players can come in. imagine if you do business in the u.k. and there is one operator. how fair is that? francine: isn't there amazon here? mohamed: there are many other players in the u.k., i prefer more than one player in the market. in the middle east, there will be more than one, we will be major players. francine: we talked the leadership skills it takes to create both the largest and tallest building in the world. more with mohamed alabbar, next.

♪ francine: alabbar properties has grown more than threefold since 2011 and expanded in the middle east and north africa, despite political instability. what kind of leadership does it take to shepherd a global company through turbulent times? mohamed alabbar, the chairman and founder, is here.

what kind of leader are you? throughout the program, we were talking about encouraging your leaders and regional and portfolio managers to be aggressive. do they always need to be on their toes? mohamed: they have to be relevant, number one. changes take place in the world. are you relevant? other thing i like, we also have to believe in the reset. we are upgrading everyone month because there is so much happening. do we really act? we have to be relevant, we have to act, we have to have discipline, we have to believe in the best people, we have to take care of society. these are the elements i depend on to manage my business. francine: what does it mean being relevant? in traditional times, you can ask a customer what they want, now the change of pace is so fast. mohamed: are you watching social media, what is going on with your customer?

on with your oing business. there is no way to search in 30 days. how alert are you? how alert are you about your customer feels, what's going on in the industry, politics, economy, youtube's management, how fast can you go? are you awake? francine: what do you need to be awake for more? for your clients, politics, how your business interest are going? mohamed: my people,, the society, politics, what might happen to interest rates. you almost have to have all the construction risk in my business. on technology, what is going on digital. you always have to be alert of all this. number one, people. you have to make sure that you share with them this environment and are they fit in this environment. francine: what do you see your role? are you putting the fire under

your manager's feet to keep them going, or do you micromanage? mohamed: i don't think i micromanage, but there are situations where i have to. we should be able to go down if we want to. i came from my mom's kitchen, we were all 15 kids living in one room. i know how to do that. i can pull back and be the chairman of the organization. if there is need to move in, i can comfortably. reasonably, good qualified people with me. i really think that i am the guy who does the multi-performance reviews, who pushes the limits. i want people to work hard. i think we as human beings, our productivity is low. francine: you spend a lot of time in property, that was the first company. what excites you the most in all

of the others that you are doing? hospitality, retail, e-commerce? mohamed: e-commerce excites me because when i look at how the digital world is changing our lives, i come back to my real estate business and say maybe this office is not required anymore. not this is old and required any more. if you look at the digital guys and see how fast they work, or the process they use, or the age of people, the younger generation are running the world and are doing it well. so much learning in the digital side of e-commerce. i think in my investment in a private equity firm that specializes in digital technology in the middle east with almost 18 ventures, that is amazing learning about what is going down in the middle east and the industries to come.

francine: do you focus on diversities for your company? is it important? mohamed: yes, that is important. we don't even have to do it anymore. it's naturally. francine: do you have metrics? mohamed: yes, we have metrics. is for that. it is happening automatically and i like that. francine: do you think it will increase? with time. will you see more female workers? mohamed: the female workers are taking charge. if you look at the people that run most of our organizations have to have more of that. look at our government. the highest percentage of senior people in government anywhere in the world. francine: mohamed alabbar thank you so much for joining us. he is founder of hairman and alabbar properties.

thank you.

nejra: europe's next big deadline, the general data protection regulation goes into effect next month. how significant will it be? mifid ii back in focus, how compliance has been since the law went live. the dodd-frank debate begins again. how many changes will be made in congress. we get the latest from washington. welcome to "bloomberg markets: rules and returns." this is the show where we delve into the regulatory challenges and opportunities for markets around the globe.