At a time when most were unwilling to invest and the financial market was in upheaval, Amin Al Arrayed saw an opportunity that solidified First Bahrain as a regional real estate developer. This month BIG had the pleasure to get to know his story of personal growth, innovative vision and his advocacy for higher education.
Over the course of your career you’ve held several senior positions, where and when did you first begin in your line of business?
I graduated in 1996 from the University of Redlands in California with a double degree in Economics and International Relations, but Economics was the subject closest to my heart. That same year I came back to Bahrain and started my first job in the economics department at Bahrain Monetary Agency, or what is now called the Central Bank of Bahrain (CBB). Over the next several years, I rose through the ranks to Superintendent of Domestic Affairs, which was a senior research post. In the Fall of 1999, I had the honour of participating in an exchange programme with the International Monetary Fund (IMF) in Washington D.C. for six months. It was a really good experience, giving me a huge amount of exposure and fuelling my ambition.
While in Washington D. C., I had observed the signs of a strengthening economy and determined to take advantage of the opportunity this represented. Accordingly, I was determined to take the risk to leave the public sector and look for work within the banking community. Shortly after my return, I accepted an offer to join the Bank of Bahrain and Kuwait (BBK) in their strategic economics department. At that time, BBK was headed by Dr. Fareed Al Mullah, a man who really believed in an economic and strategic based approach to management. I gained a lot of practical management experience at BBK, rising to be Head of Retail Banking. During this season, I expanded my personal skillset by pursuing an MBA through the DePaul University program hosted by the Bahrain Institute of Banking and Finance (BIBF). The DePaul MBA was an excellent program and I was in a strong cohort, developing many relationships with classmates and professors which continue even today. In particular, the course sowed in me the seed of entrepreneurship and provided me with a strong foundation, preparing me to grow into leadership at higher level positions.
How did the opportunity for you to move away from banking present itself?
Along with several others, I was brought in to form a think tank to shape the future direction of the bank, which was then led by Dr. Fareed Al Mullah. One of the big issues that I identified was the difficulty that the traditional bank showed in approving mortgage loans. At this time, the real estate sector was booming. New laws had enabled the sale of apartments within towers on a strata title basis and the market was now also open to expatriates. However, traditional banks were slow to adapt to these new market realities. I oversaw mortgage loans for BBK at this point and I was regularly seeing deals lost due to antiquated requirements and overly restrictive risk guidelines which had not accounted for the changes in the market. Proposals were made to adapt but the bank chose to maintain their restrictive practices.
Recognising the real opportunity at hand, I decided to leave the bank, along with a group of my colleagues, headed by Dr Khalid Abdullah (now CEO of Eskan Bank) to set up the first dedicated real estate financing company in Bahrain. The company was called Reef Real Estate Finance Company. This was my first real taste in taking an entrepreneurial risk, and it was exhilarating. We moved very quickly, placing almost BD 30 million into the market in our first twelve months of operations. On the back of my strong personal performance, I was contacted by one of the key shareholders of the company, Global Investment House, a large Kuwaiti finance house. They had recently raised the funds to setup a new company called First Bahrain. It has a paid-up capital of $100 million, some strategic land in Seef, but no management team. So, in 2007, I took another risk and moved into the lead position for the first time as General Manager for First Bahrain, with a mandate to establish the company and activate its projects. I am very grateful because I was allowed the opportunity to really build a team from scratch.
The global financial market was hit just one year after First Bahrain opened its doors for business. What was your initial reaction to the crisis? How did you overcome this particular challenge?
When I joined First Bahrain, we were at the height of the real estate boom. My focus was predominantly on developing a huge project on our Seef land, but I also guided the company to diversify its holdings, acquiring industrial land in Hidd and a mixed-use plot in Janabiya.
A year in with the project nearing commencement of construction, I was in London in the summer of 2008 and I received a call that Lehman Brothers had just collapsed. Suddenly, the global financial system was in chaos. Projects that were lined up were halted and banks were no longer willing or able to participate in new deals. There was no appetite to take any risk. Very quickly we took the decision to move into a sector that would do well even in the time of a crisis. We thank God that we were not further along in the process. Very quickly, we decided to pivot away from Seef to focus on developing our industrial plots.
There were several reasons for moving into industrial property development. The first was that as a sector it’s not as susceptible to the volatility that you have in other sectors, whereas with industry it is very much the backbone of the economy. Second, the Government was actively promoting this sector with heavy investments in infrastructure and planning. The brand-new Khalifa Bin Salman Port had just opened and virtually nothing had been built around to support it. We also identified that there was a gap in existing supply. Many large companies could afford to build their own warehouses but the property available for small companies was generally substandard. Accordingly, amid the growing macro-economic crisis, we saw an opportunity and pursued the development of the first dedicated SME warehousing company, Majaal.
In what ways did Majaal contribute towards the success of First Bahrain? Did it lead towards creating any new developments?
Majaal started out focused on the SME sector with the majority of the first phase occupied by small companies taking up 250-500sqm. The first third of the property was fully occupied by the end of 2011 with a mix of 30 SMEs. Early in 2013, as we were in the process of tripling the size of the facility, we announced a major signing with Abudawood Alsafar Co., which is the regional partner for Procter & Gamble. They now have their entire distribution centre at Majaal and it is one of the largest facilities in the Middle East. Shortly thereafter, we signed another major deal with GENCO, a third-party logistics provider. We then received a call from a major investment company in Kuwait called Al-Mazaya Holdings. They said that we had done such a good job with our project that they wanted us to do the same for them. We signed with Al-Mazaya, proceeded to build their facility and then we managed until it was fully leased up. We take pride in the fact that we were able to move in a direction where a Bahraini born brand can be picked up regionally. We’ve been fortunate to have support from the Ministry of Commerce and Industry, and from the Economic Development Board or EDB. Majaal also gave us very dependable cash flow and with that we decided to approach the banks with our second project, EL Mercado.
First Bahrain’s El Mercado Village was recently honoured at the 2017 International Property Awards, tell us more about the concept behind this unique complex?
This project for us was our first mixed-use development, offering a combination of retail and residential. The 42 villas and townhouses offer all the privacy and modern conveniences expected of a gated community, with the convenience of individual title deeds with no ongoing service charges. The homes are all in immediate proximity to our neighbourhood marketplace featuring café’s, restaurants, salons, services, a bank and an Alosra supermarket. One of the things that we made sure with El Mercado is that it complimented the Janabiya area. It is an area that has a lot of gardens and compounds, so it was very important that whatever we were going to build had the ability to enhance the surroundings and not take away from it, for example, the project was inspired by a traditional Spanish-Andalusian design, the main platform of the mall is an open-air piazza like the ones you would find in cities like Marbella or Barcelona. We also wanted to ensure that El Mercado had a nice blend of retail services, all collectively catering to the needs of customers and residents alike. I can’t emphasize how encouraged we were by the state of response and the performance of that project.
What is the criteria you lookout for when deciding upon a development project?
You would think of ten years as a long period of time but real estate development moves at a slow pace. Typically, the development and investment cycle from start to finish takes about three to five years. One or two projects in succession can be a ten-year endeavour. For us we’ve been very considerate in our approach to develop. We have seen what has happened to some of the developers that get ahead of themselves. During the crisis for example, we saw a lot of companies that started aggressively but didn’t survive and some projects were abandoned or never finished. We never wanted to put ourselves in that position, we always wanted to be sustainable in the long term. Our strategy was validated by the performance of the projects we developed.
With such selective choices in developments are there any talks of prospective projects we can expect to hear about in the near future?
We’re currently working on a development plan in the Seef District. We’re working very closely with the EDB to ensure that we have a positive impact on attracting tourism and to bring in new concepts. Our goal for the project is to make sure that whatever we do works for Bahrain. More than ever we’re in a situation now where the land that we hold, is in what I would consider to be, the entertainment and tourist district in Seef. It’ll be something that really complements what’s around it. For now that’s all I can share but we are excited!
You were recently appointed to the Board of Edamah, the Government’s real estate developer. Tell us about this opportunity and your expectations.
I was honoured to be appointed to the Board of Edamah. Our Chairman, Khalid Al Rumaihi has put together a great team of industry specialists at the Board to oversee the implementation of strategies and activation of projects that will undoubtedly contribute to Bahrain’s economic growth and income generation. I believe that we will have a significant and positive impact and it is a great responsibility for all involved.
Do you have any hobbies or interests that you are very passionate about?
My interests have always been in supporting youth. I’m part of the college council of the University of Bahrain and the Vice Chairman of the Bahrain Foundation for Dialogue. I think it’s important to have a nice balanced mind-set between profit-motivated business and altruistic social responsibility. One of the things that you learn very early on is that when you start to get into an exclusively profit mode it can be unfulfilling. You want to leave a positive legacy behind.
What have you found to be your best source of motivation?
I have wonderful family members like my father and my uncle who have provided that role model for me. My wife and children. Also, my colleagues that I work with Daniel Taylor and Yasser Abu Lughod. As I mentioned earlier, I have been very fortunate to have some really good mentors. There are also people who I have worked that provided me with strong guidance such Abdulla Saif, Murad Ali Murad, Dr. Fareed Al Mullah and Dr. Khalid Abdulla. If you’re lucky you can appreciate having an environment that promotes this idea of creative thinking. I also highly recommend doing an MBA, it’s especially a good time to do it mid-career, after some experience you can really apply some of the principles that you learn when working. I would say the MBA was the catalyst for me to become non-conventional and leave my steady job at CBB and shift to the private sector.
Fom http://www.businessingulf.co