Interview: Louis-Armand de Rougé
What are RAK’s most significant competitive advantages? Why do you feel investors should choose RAK over other destinations?
LOIUS-ARMAND DE ROUGÉ: If you look at the real estate aspect, the first answer to your question is RAK’s geographic location. The emirate benefits from a great location that brings unique geographical advantages, being at the crossroads of trade between East and West.
Furthermore, before the development of sports tourism in RAK, the emirate had a long-term investment policy. RAK embarked on a series of measures that have enabled foreign investors to enjoy regulatory benefits when it comes to licensing and ownership, but also with regard to fiscal benefits and the very low financial risk. In addition, together with the tax environment in the emirate, utilities are priced very competitively, while logistics are low-cost and are of a very high quality.
Following the global financial crisis of 2008-09, the UAE has recovered and we have seen a return to the occupancy rates the emirate enjoyed before the real estate downturn. Sales prices experienced an uptrend trend in 2011, having fallen for the previous two-and-a-half years. In addition, construction costs are at their lowest level for five years.
What do you say to those who argue RAK’s projected tourism growth is too ambitious, especially given the level of regional competition?
DE ROUGÉ: One should remember that Dubai is a major international airport that has achieved average annual growth of 15.5% over the past 50 years, and which is expecting to handle 75.3m passengers in 2015. Dubai International Airport has benefitted from the emirate’s location. Its unique geographical position makes it an ideal hub location – within eight hours flying time from most major destinations and two-thirds of the world’s population.
Like Dubai, RAK is currently witnessing a considerable transformation in its aviation industry, and it is expected that the number of passengers using RAK International Airport will rise steadily. Furthermore, RAK will benefit from the regional multipliers resulting from the FIFA World Cup in Qatar in 2022, with increased passenger traffic in the region.
As you plan for the development of the Real Madrid football island project, what is the most pressing concern in terms of construction? How much of a worry is raw material price inflation?
DE ROUGÉ: We are working on this project with a long-term perspective in mind, as we aim at the next 20-30 years. Therefore, of course, the evolution of raw prices can be an issue when building.
However, it is a cost factor that we take into account, just as with many other variables. We will ensure that we work with the best companies at the best price, aiming at a high quality of construction and services and with respect to the environment and to the workforce.
Spain continues to feel the impact of a real estate bubble. Has the UAE, and specifically RAK, learnt the lessons of its recent property correction? Can it learn from the Spanish example?
DE ROUGÉ: It would not be fair for me to give lessons about it or to say, after the fact, what should have been done. At the present time, there are fewer projects and this one stands out.
At the same time, the economic environments of Spain and the UAE are very different to one another, and one can expect the UAE to recover more rapidly. The real estate bubble that hit the UAE did not impact RAK, which was active in various industrial sectors via its long-term development policy. One will always be able to benefit from lessons learnt from the past. However, the combination of the strong dedication of the project team and the political will being shown by the government will enable us to be efficient in the present economic environment.
Read More from OBG
