Economists that have dabbled in the muddy waters of business are rare and those who have been successful doing so are rarer. Despite the help of the latest artificial intelligence, business still remains risky and is a game of skill which everyone cannot play and very few can play well.
One such rising star is Amin Alarrayed, the Chief Executive Officer of Edamah, the real estate arm of Bahrain's sovereign fund Mumtalakat.
Alarrayed, who took up his present position with Edamah last year, was previously the CEO of First Bahrain, and had important positions at Bank of Bahrain and Kuwait (BBK) and at the central bank of Bahrain. With a distinguished career of two decades in banking and real estate, Alarrayed is forging ahead with dynamic and innovative projects.
An economist at heart and a businessman in thought, Alarrayed has made the journey from one to the other with aplomb over the past two decades. In fact, he has never left one for the other and uses the skillsets he learnt as an economist to achieve business success.
“The nice thing about economics is that it is a way of thinking. If you study economics and if it becomes a discipline for you, you end up using that framework for making all kinds of decisions (much to the annoyance of your family). You always think cost and benefit, is it worth it? So, it’s a decision-making tool,” Alarrayed says in an exclusive interview with Arabian Knight.
“It makes just who you are. That for me was a passion in university and it continues to drive me. I would have loved to continue in the field. The thing about economics is that in the US, you can reach very high levels. But in Bahrain, there wasn’t much appreciation, at least at the time when I came back in the nineties. It was seen largely as an academic degree. That’s why I had to leave the economics field,” he says ruefully.
Speaking on his early days, Alarrayed reveals that he completed his schooling with an American diploma from Bahrain School and then went to the University in Redlands, California, and picked up Economics as a major in the second year.
How did his interest in Economics develop? He credits it to his economics professor in the university. “You enjoy a subject if you have a good teacher; my professor made me love the subject, I liked the way she taught me.”
After attaining a degree in economics, Alarrayed returned to Bahrain in 1996 when the banking boom was in full force in the kingdom. “There were a lot of positive things happening in Bahrain’s financial sector. I really wanted to be true to my degree and I was looking to work as an economist,” he continues.
Economics as a discipline was at its nascent stage in the country and there weren’t many opportunities forthcoming for a young economist. A researcher position in the Economics Department of Bahrain Monetary Agency (as the central bank was called then) interested him and the just-out-of-university graduate felt that was a very good place to begin his career.
“A big part of what the central bank does is the supervision of banks, so I became very familiar with the banking sector and developed an interest in it. It gave me a real insight into banking and finance. The government at that time was also positioning Bahrain as the banking hub of the region and we had 200 banks then, providing great opportunities,” Alarrayed elaborates.
During his time at the central bank, he was seconded to the IMF in Washington DC and he got the opportunity to brush shoulders with some of the best economists and bankers of the time. “I decided during that time that I wanted to focus on developing a career in banking,” reveals Alarrayed.
Back in Bahrain after the IMF stint and with his eye on the banking sector, he joined BBK, the largest commercial bank at the time, in 2001. The bank’s management was focussed on developing a strategic unit targeting at launching new products to the market and Alarrayed moved into this unit. “That was my first foray into banking and I enjoyed it a lot,” he reminisces.
He moved fairly rapidly in his career, becoming one of the youngest senior managers. However, a pat on the back and some wise words from the bank’s then CEO Dr Fareed Mulla, got him thinking about newer pastures. “I remember Dr Fareed telling me: if you want to move up, you have to move away from economics and become more business-oriented.”
Growth for the ambitious Alarrayed was not an option but a priority and to achieve that, he needed to equip himself with a Master’s in Business Administration degree, which he completed from the prestigious DePaul University in 2004.
Returning to Bahrain and BBK, he moved out of its Economic Research department to Retail as the regional head, the youngest at the time. “The primary product I was focussed on was mortgages. It was really a boom period for the real estate sector and there were a lot of new projects coming up, many off-plan. The banks were finding it difficult to fit in products needed by the market. I was part of the team which created products that would allow new mortgage structures to come up,” continues Alarrayed.
With the continued boom in real estate, BBK felt the need for a new entity for this sector that wouldn’t be burdened by the policies and procedures of the big commercial bank. “This started the entrepreneurial side of my career. I was part of that founding team that put together the framework for this new entity that was to become a real estate bank,” he recalls, tracing his move to the real estate sector (BBK eventually created Sakana, in joint venture with Shamil Bank).
Before the bank could be launched, another opportunity knocked at Alarrayed’s doors. “Global Investment House, an investment bank which also felt there was a market for a real estate bank, recruited Dr Khalid Abdulla (former CEO of BBK) and myself and together with a founding team created a company called Reef (Real Estate Investment Company). We had the first real estate bank up and running and were extraordinarily successful in the first year of operation as we placed over BD30 million in the market and that was a lot,” says Alarrayed proudly.
Now, Global Investment House had realised the potential of the young economist-turned-banker-turned-real-estate financier and wanted to give him more. “The company told me that it had raised $100 million to form a real estate company and it wanted me to set up and run it. It was a very attractive offer for me, still fairly young and I took it.”
So, in 2007, Alarrayed’s career took another direction. He established First Bahrain Real Estate, the company he led for 11 years, helping build some of the trend-setting projects in the kingdom.
During his time at First Bahrain, he established Majaal, a warehousing company for SMEs with 60,000 sq m of space; the Mercado mall and a village of 42 villas; and initiated development of some lands in Seef. “I am very proud of the work I did at First Bahrain,” he adds.
The market had now taken note of this talent, who had been able to withstand the global recession with his innovative approach to the needs of the market. In the fourth quarter of 2017, he was appointed a board member of Edamah, as part of the reconstituted board under the chairmanship of Khalid Al Rumaihi.
“It was a fantastic board with most members being specialists in their respective fields, very experienced and respected. I was very happy to be a part of that board. The board’s mandate was to come up with a new strategy for Edamah. I was part of the investment committee and worked closely with Khalid and the rest of the team in putting together a strategy for Edamah,” says Alarrayed.
Exactly a year after that, in the summer of 2018, he was named the CEO of Edamah. He says the company, as the real estate arm of Mumtalakat, has a very strong agenda that focuses on its ability to impact Bahrain’s economy significantly.
“We see ourselves as the real estate arm of the government of Bahrain and have a sizeable portfolio. The goal for Edamah is to contribute positively to the economy. Our strategy and goals are in alignment with those of EDB and the Ministry of Finance. This allows Edamah to have a very positive impact on the economy and I am looking forward to the future,” he adds.
Edamah has a project portfolio of around BD200 million, which includes its land bank and the projects that have just started. However, a large portion – almost 80 per cent – of the land bank has not been activated.
“We, at Edamah, have the unique ability to identify the land that can be developed into projects that can add value to the kingdom. We have identified some key areas that we want to focus on,” he says.
Alarrayed lists three major developments that are now key strategic projects and which he hopes will make a difference to Bahrain’s community.
• Bilaj Al Jazayer, which is a public beach on the west of Bahrain. It is a 3 km by 1 km beach plot offering a lot of potential to become a strong tourist destination. “This flagship project is a public beach with components that are private – chalets and hotels. Our job as the custodian of the property is to make sure that it is developed as a unique destination for Bahrain. Over a period and in stages, there will be around BD30 million investment in the project,” adds Alarrayed.
• Car parks: Edamah plans to develop and operate car parks across Bahrain as it sees them as a catalyst for investment and a very important element in activating certain areas. Edamah also recently acquired a stake of 36.6 per cent in the Car Parks Bahrain company, and Alarrayed has been appointed the chairman of the company.
• Sa’ada: A waterfront food and beverages destination on the coast of Muharraq, this is a project that will be ready by the end of this year. “Sa’ada was named by HRH the Prime Minister and means happiness and he has shown a keen interest in the project,” he adds.
“These projects are at various stages of implementation and it is a signal that Edamah is moving, not just talking about planning and strategies. Hopefully, the three projects will be the ‘proof of concept’ for the new Edamah,” he adds confidently.
Alarrayed strongly believes that the projects undertaken by Edamah should meet three criteria: they should be financially viable; have a positive economic impact; and make a social impact too.
Longer term, Edamah has a long list of plans and Alarrayed is optimistic. “In Bahrain, just like anywhere else, if you deliver on the mandate, you end up getting more. So, we are really eager to prove on the existing projects and start to expand. I want to work closely with Mumtalakat, EDB and other government entities to see where we can add value and which projects we can take under our belt.”
Though Alarrayed was reluctant to name any projects, his preference is for defensive sectors – the areas that are robust and are not easily impacted by economic cycles, including: Healthcare, manufacturing, hospitality and education.
“We focus on catalytic investments – investments that encourage other investments. If the money we put in encourages a hotel or restaurant to come and set up on the beach, then we have contributed to economic growth,” he elaborates.
Speaking about working at Edamah, he says: “I am very lucky that the board of Edamah is predominantly private sector leaders and industry specialists. It’s very encouraging that we have companies that are government-owned but are run on the basis of best practices in a professional manner. So honestly, this company is being run in the way a private sector company is run.”
Alarrayed’s two-decade-long career has offered him some really proud moments and without hesitation, he puts the success of Majaal as the proudest.
“Majaal was the first SME-focused warehousing facility in Bahrain. We launched it during the financial crisis of 2008/2009 and that was a time everybody was suffering. I remember I sat with the board and told them that I wanted to do a warehousing project. They asked: ‘Are you crazy? It’s so boring, people are building twisting towers and you want to do warehousing?’ I said, yes, it will be successful.”
“Our thinking was very simple: There was this huge gap in the market for Grade A quality warehousing for the companies in the small and medium sector. Majaal was a fantastic project, it hit all the sweet spots in the market and generated good income at a time when many were suffering. It really is what gave me credibility.
At Edamah too, Alarrayed is hoping to come up with projects that are sustainable and impact positively to the economy. “It makes me proud when people say Mercado mall is nice and I like to shop there, or Majaal is great,” says Alarrayed. “I am hoping that we will start to get similar comments on the beach, Sa’ada and the car parks.”
Alarrayed believes real estate is the backbone of many other sectors. “Healthcare is a sector, but hospital buildings and parking structures are real estate; in retail, the shopping mall itself is real estate. Real estate is an integral part of all sectors.”
As a leader in real estate, he gets to engage with people from different sectors – healthcare, education, industries, and even chicken farms. “It helps you to become a broad-minded person because you are interacting with all these different sectors,” he says.
On the new trends in the sector, he says technology has had a major impact on the way people behave. “It is disruptive and it has really impacted retail. For example, the concept of a pure shopping mall is now not working well. People today prefer, to a large extent, to shop online. This means that when we build a shopping facility we must create a destination that can provide something that technology cannot – an experience.”
With Sa’ada, Edamah hopes to deliver a destination. “You can’t provide that kind of an experience via technology. You can deliver a product, but you can’t deliver an experience. Experience has to be experienced.”
Does the experience and the mindset of an economist hold him back in taking decisions? No, actually the opposite is true for Alarrayed. “It probably is the reason why the decisions we have taken are good ones and the businesses that I have been involved in have done well. Running a business is not crystal ball gazing …it is about saying that I have a model and if these things happen, I can end up with this result. A lot of transactions that I have done, even at Edamah, are built on models that have materialised. So, it is all about having the tools, it goes with you no matter what you do. I use them all the time, it becomes part of you.”
One question we always have for business leaders is what is their vision for the next few years. A realistic Alarrayed answers: “The vision is a culmination of what I have spoken previously. It’s about developing sustainable projects that have a life cycle as long as the physical projects exist. Real estate is a long-term business and anyone who thinks short term shouldn’t be in this business. We are not traders, we are developers and the development cycle is a long one. If the idea is to make quick gains, it’s a different business; it’s not a developer’s business.
“I am hoping that many of the projects that I have been part of will be there even after I am gone and my son will drive there one day and say ‘my daddy helped build this.”
Flexibility Key to Success
Early to bed and early to rise makes a man healthy, wealthy, and wise. Our Business Leader Amin Alarrayed, the CEO of Edamah, seems to follow this adage quite perfectly.
“I am a morning person, getting up around 4 am every day,” he says. “I will be at the gym for my workout at 5 am. The early rise means I have to sleep early too and I begin to wind down by 8.30 pm and am in bed before 10 pm.” So be warned that anyone who wants to send emails or call him late in the evening will have to wait for daybreak to happen to get a response.
Alarrayed, who is at office from 8 am to 5 pm, admits he is “not big on socialising. I am mostly a work and home person.”
Alarrayed, who is married to Rusul Al Hashmi, has two teenage children – a son and a daughter and proudly says he is a family man. “I like being with family and travelling with family.”
As for his hobbies, Alarrayed enjoys books and photography. “I read a lot, like good movies and try my hand at photography. I always have a camera with me when I travel,” he says.
Alarrayed hails from an illustrious family of professionals and political leaders in Bahrain and believes his father Dr Ahmed Alarrayed and uncle Deputy Prime Minister Jawad Alarrayed have had a great influence on him.
“I was very fortunate to have a very supportive family. My father is a medical doctor and now a politician too by being a member of the Shura council. He is somebody I always looked up to because of his experience and selfless service to the community as a doctor. Aside from that, he has always been a very steady person, someone I can depend on. My uncle, who is also a senior politician, is someone who has achieved a lot of success in life. He has a very discerning taste and I have learnt a lot from him,” Alarrayed recounts.
He also remembers with gratitude some seniors and bosses who mentored him in his career. “Professionally, I have had some very good mentors – Khalid Abdulla, who is the CEO of Eskan Bank; Dr Fareed Al Mulla, the General Manager of BBK; Murad Ali Murad, Chairman of BBK; and Abdulla Saif, former Central Bank Governor, are some of them. Now, I work with Khalid Al Rumaihi, who is great and not only professional but also very creative and strategic in his thinking.”
Of course, we want to hear this pioneering business leader’s prescription for success. It’s flexibility – in job and life, AlArrayed says without hesitation. “The trends in the market shift, new things emerge and hence one needs to have the ability to reinvent oneself. Give yourself the ability to take opportunity when it comes to you.
“When I started my career, I used to describe myself as an economist and if you asked me then I would have said I would be an economist till I die. If you define yourself too narrowly, if you have skillsets that are too limited, you could end up with a problem. Be flexible, see where the opportunities lie, because ultimately life will not provide you with exactly the opportunities you want, though it will provide you with opportunities, may be in a different field or direction.
“People who are fixated on certain things are missing a lot of opportunities. If you keep your radar up and say this is not what I wanted, but this is an opportunity that I can seize, you will be a winner,” Alarrayed concludes.
– By Sree Bhat
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