What prompted the recent acquisition of Banif Bank in Malta and does this signify a new strategy of diversification into financial services?
SHEIKH FAISAL BIN QASSIM AL THANI: We visited Malta as part of a business delegation programme to explore a number of investment opportunities on the island. We believe Malta has many advantages and a great deal of potential deriving from its stability and geographical proximity to big European markets.
As diversification is central to our business strategy, we are continuously looking to capitalise on growth opportunities in different areas. In that respect the financial services sector clearly plays a significant role in enhancing our exposure to both the local and global economy.
The Banif Bank acquisition was executed by the subsidiary Al Faisal International for Investment, which is leading the expansion of the group’s financial services both in Qatar and internationally. The company will continue to pursue opportunities for further organic growth through strategic alliances and by additional acquisitions where appropriate.
Given the current global economic climate, what other potential investment opportunities exist for large holding companies in Qatar?
SHEIKH FAISAL: We are very fortunate to be in Qatar, which has been only marginally affected by the global economic uncertainty, having largely withstood both the 2008 world economic crisis and the more recent volatility related to the 2015 fall in oil prices. With secure and stable financial positions, Qatari businesses have been able to take advantage of and capture several market opportunities regionally and internationally.
At Al Faisal Holding, we have expanded our investment footprint into the European and US markets across a range of sectors. We believe India represents an attractive investment opportunity with great potential in the hospitality, tourism and IT sectors. Furthermore, the enhancement of its regulatory environment is making the country ever more appealing for foreign investors. Other Asian markets, such as China, are of interest along with the US, and Western and Eastern Europe due their significant size and depth.
In what way has Al Faisal Holding helped lead local economic diversification in Qatar?
SHEIKH FAISAL: The government is keen to increase the contribution of the private sector to the overall economy. This is considered vital to achieving its national vision. Consequently, there is a high potential for further growth in the private sector given the broad range of opportunities available to businesses in supporting the public sector. Despite the recent reduction in hydrocarbons revenues, large-scale government infrastructure projects continue apace.
Furthermore, many international companies are attracted to and eager to access Qatar’s economic growth through joint venture arrangements. This, in turn, is continuing to create strong opportunities for Qatari entrepreneurs looking for further foreign partnerships to generate strong growth in the local market.
How would you characterise the domestic retail sector given that a host of new malls are expected to come on-line in 2016 and 2017?
SHEIKH FAISAL: The retail sector has witnessed strong demand in Qatar over the past decade. The country is considered to have among the world’s highest GDP per capita, which, along with its growing population, translates into the high spending power.
The concept of shopping has evolved over the past two decades. While it was mostly outdoors in the past, we have seen an increasing trend that favours indoor shopping and entertainment. The mall culture embodies this evolution, creating real social and entertainment destinations that attract further visitor numbers through the incorporation of cinemas, play areas and food courts.
On the retail side, the number of big brands attracted to the high quality of Qatar’s malls means that people no longer need to go abroad to purchase international luxury brands. Malls have further room for growth as ongoing urban expansion creates the demand for new shopping centres. One trend we are seeing is the market becoming increasingly diverse, with large-scale retailers and smaller malls addressing different market and demand segments.
Another positive indicator is the fierce competition for leased space in our malls among international retail brands. This enhanced competition forces players to be more efficient and competitive, which ultimately benefits consumers as well as the health of the entire sector.