Business

Bloom wins big project in Karbala

Bloom Properties has signed a contract with the Iraqi authorities to start work on a mega project of 40,000 homes in the holy city of Karbala in Iraq.

Lucy Barnard

March 04, 2013

The Abu Dhabi-based master developer Bloom Properties has signed a contract with the Iraqi authorities to start initial work on 40,000 homes in the holy city of Karbala in Iraq.

At a ceremony attended by the Iraqi prime minister, Nouri Al Maliki, on Thursday, Bloom agreed to start work on developing the Shores of Karbala housing project. The development will be divided into four districts and include hotels, offices, markets, clinics, schools and mosques.

Bloom, a subsidiary of the Abu Dhabi-based National Holding, will put together a final detailed master plan for the scheme for the governor of Karbala.

It will also complete tasks such as surveying the land, obtaining building licences and preliminary approvals. In a statement yesterday, Bloom did not provide any information about the cost of the project or how it would be financed.

A Bloom spokeswoman was unable to respond to questions.

The news comes five months after Bloom signed a cooperation agreement with the Iraqi ministry of construction and housing to work on property projects in Iraq on the sidelines of the Cityscape Global exhibition in Dubai. "With the signing of this contract, we are set to commence work on the preliminary planning phase," said Simon Azzam, the chief executive of Bloom Properties, one of the signatories to the contract. "This is one of the largest real estate projects in Iraq and will be developed in several phases."

"The project will contribute to the urban planning development of Karbala," said Sami Al Araji, the chairman of Iraq's National Investment Commission.

"Our strategy is to take the holy city to a new level by improving the distribution of population density and urban centres and shaping it into a vibrant metropolis."

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

German intelligence warnings
  • 2002: "Hezbollah supporters feared becoming a target of security services because of the effects of [9/11] ... discussions on Hezbollah policy moved from mosques into smaller circles in private homes." Supporters in Germany: 800
  • 2013: "Financial and logistical support from Germany for Hezbollah in Lebanon supports the armed struggle against Israel ... Hezbollah supporters in Germany hold back from actions that would gain publicity." Supporters in Germany: 950
  • 2023: "It must be reckoned with that Hezbollah will continue to plan terrorist actions outside the Middle East against Israel or Israeli interests." Supporters in Germany: 1,250 

Source: Federal Office for the Protection of the Constitution

Mohammed bin Zayed Majlis