14 November 2016

By Yasmine Saleh

Dubai’s Easa Saleh Al Gurg Group (ESAG) is investing in the commercial real estate market in the United Kingdom (U.K.), as part of the conglomerate’s plans to diversify away from the slow growing Gulf markets, the company’s general manager told Zawya.

“We are expanding in the U.K., mainly in commercial real estate in central London,” Abdulla Al Gurg, the group’s general manager, said in an interview earlier this month.

“We think that Brexit was of value to us, because the pound has gone down by 20 to 25 percent and it has actually opened up opportunities. A lot of investment from Middle Eastern families has gone into the U.K. in the past and this is still continuing,” he said, adding that Britain was seen as “a safe haven” for Arab investors.

The British pound fell 8 percent against the dollar on the second day after Britain voted to leave the European Union last June and has remained low as the political uncertainty over Brexit continues.

Slow growth

ESAG includes over 20 separate companies in sectors ranging from real estate to consumable products and Al Gurg has forecast that growth will be at a slower pace this year and into the beginning of 2017. He doesn’t expect performance to improve until the end of 2017 and in 2018, when projects that are currently in the pipeline are set to come to market.

“The market situation has become quite challenging, especially with the macroeconomic structure within the GCC,” Al Gurg said, referring to the region’s widening budget deficits, which are the direct result of over two years of low oil prices.

Performance across the group’s various sectors has also varied considerably. The company’s electronics business grew the most, growing 12 percent this year, while the consumer products sector, including cigarettes and Unilever products, grew by 7 percent in 2016 and the real estate sector trailed with just 3.5 percent growth.

Under Al Gurg’s leadership, ESAG has already begun expanding outside its homebase of the United Arab Emirates, with operations now in Saudi Arabia, Qatar and Oman. Its current portfolio hosts 370 international brands, including Siemens, British American Tobacco, United Colours of Benetton, Dunlop, Armitage Shanks, Siematic and Smeg.

© Zawya 2016