|Shurooq- DRAWING INVESTORS’ ATTENTION TO SHARJAH|
Inspired by innovation and committed to the future of Sharjah, The Sharjah Investment and Development Authority, also known as Shurooq, is one of the main components behind the emirate’s development and great success. As the Authority is constantly looking for investors to capitalize on the emirate’s potential, Elie Armaly, Director of Business Development, Shurooq explains how they are attracting investors to Sharjah while revitalizing its heritage and culture.
How is Shurooq promoting Sharjah as an investment destination?
Shurooq’s approach to investment promotion is, in the broadest sense, two-pronged.
On the one hand, we work to make the investment community, both within the region and internationally, aware of the potential and opportunities that Sharjah has to offer. Shurooq also facilitates the entry of these investors into the Sharjah market through a range of services that vary depending on what the needs of the investor is. In short, our focus is to match the right opportunity with the right investor.
On the other hand, we are also actively involved in developing projects that generate investment opportunities – chiefly in the tourism sector. These are projects that are designed to create sustainable economic growth and that balance investors’ expectations in terms of ROI with the positive socio-economic impact on Sharjah we have been mandated to achieve.
How are you attracting foreign direct investors to the Emirate?
Sharjah has immense investment potential. Our challenge is to make the international investment community aware of this potential, which is why we have very active schedule of regional and international participations in top-level investment events, such as the World Forum for Foreign Direct Investment. We also work very closely with federal entities such as the Ministry of Economy and Ministry of Foreign Affairs and collaborate with them on the many local and international initiatives that they organize, in addition to holding regular roadshows that allow us to interact with international investment agencies, large organizations, and other relevant authorities across the globe as well as our schedule of roundtables with the business communities and associations of countries already present in the UAE. This promotion approach has been very successful and has significantly raised Sharjah’s international profile. In fact, Sharjah has been ranked among the top ten small and medium-sized cities in the world in the Global Cities of the Future index for 2014/15. The report, which is produced by FDI Intelligence, a division of the Financial Times Ltd and the largest FDI centre of excellence globally, placed Sharjah as ninth globally and third in the Middle East in the ‘Top 10 overall Small and Mid-Sized Cities’ category.
Which countries are more likely to do business with Sharjah and which sectors attract them the most?
I am pleased to report that foreign business interests in Sharjah are, much like our economy, quite diversified, which is why we prefer to look at FDI on a global level rather than zeroing in on any one country in specific. That being said, we have had great success in terms of our promotion efforts within the US and Chinese business communities, especially with regards to our strong SME sector. India is also another investment community that has a very strong presence in Sharjah across a range of sectors. Shurooq has furthermore been building stronger ties with Germany, especially in terms of healthcare and environmental services, and we have seen a lot of interest from Russian investors as well. Historically, Sharjah has also attracted many GCC investors and this trend still exists.
How easy is it for a foreign investor to do business in Sharjah? Are there any particular agreements that facilitate the process?
Sharjah offers significant cost advantages that are not generally available internationally – it ranked eighth worldwide in terms of cost effectiveness in the ‘Top 10 overall small and mid-sized cities’ category of the ‘Global Cities of the Future’ index for 2014/15.
These include competitive import duties, energy costs, real estate costs, financing costs, and labor costs from a skilled and multi-lingual workforce. Sharjah also offers high levels of liquidity as well as no foreign exchange control, no corporate profit or personal income taxes, and 100% repatriation of capital and profits. In addition to these fundamentals, Sharjah also has the most balanced and diversified economy in the GCC region – no single sector contributes more than 20% to GDP – and is the third fastest growing economy in the UAE.
To facilitate even greater cooperation and collaboration, Shurooq has signed MoU’s with a range of regional and international bodies and organizations worldwide, including the U.S. Chamber of Commerce, the US-UAE Business Council, the Export-Import Bank of the US (Ex-Im Bank), and Invest Hong Kong (InvestHK).
In addition to these international collaborations, we also work with local agencies to enhance and expand FDI opportunities on a national level. For example, Shurooq has signed a MoU with the Sharjah Electricity and Water Authority (SEWA) to boost cooperation between our two authorities in the fields of energy and environment efficiency, energy conservation, and attracting investors in the fields of renewable and alternative energies. We also have a partnership agreement with the Dubai Investment Development Agency (Dubai FDI) to attract investment into the UAE.
These agreements allow for better communication and greater transparency, both of which are crucial elements in facilitating FDI and it is clear that the international community agrees, Sharjah ranked in tenth place in FDI Intelligence’s ‘Top 10 Small and Mid-sized Cities Business Friendliness’ index.
We know that you are focusing on turning Sharjah into a logistic hub, what are your endeavors in this respect?
Given the importance of trade and manufacturing to Sharjah’s economy, the transport & logistics sector is a fast-growing one, and one that has already attracted international attention. The Global Cities of the Future index for 2014/15 rated Sharjah as fourth worldwide and top in the Middle East in the ‘Top 10 Emerging Cities Connectivity’ category and in the ‘Top 10 Small and Mid-sized Cities Connectivity’ category it ranked sixth globally.
Sharjah’s centralized location makes it an ideal logistics base. As the only GCC hub with direct access to the Gulf and Indian Ocean – it has three deep-water ports, two on the Arabian Gulf and one on the Indian Ocean – Sharjah offers a gateway to 160 countries and 2 billion consumers worldwide, in addition to being the only Emirate to share a border with all six of the other UAE emirates. Sharjah International Airport is the 3rd largest airport in the UAE and the 2nd largest Middle East airfreight hub in terms of cargo tonnage. The Emirate also boasts 18 industrial zones and two highly successful free zones.
This has resulted in a fast-growing sector with a market potential expected to reach AED3.43 billion by 2016. Shurooq will continue to draw attention to Sharjah’s logistics sector and we are constantly looking to find new investors who wish to capitalize on its potential.
In terms of specifics, there is still a lot of room for growth in freight forwarding as, despite Sharjah-based companies contributing to more than 9% of the UAE’s foreign trade, only 6% of freight forwarding services for SMEs are based in Sharjah. Another sector within logistics that offer great potential is F&B reefer shipping - there is definitely space for new reefer forwarders to enter the market, as a large majority of the competition is located outside the Emirate.
How is Shurooq revitalizing the culture of the Emirate through its numerous projects?
Heritage and cultural tourism is a fast growing market internationally and one that Sharjah is uniquely positioned to capitalize on in the region. Sharjah is the cultural heart of the UAE and is rich in history and heritage. It was the Islamic Capital Culture 2014 and has been named the Arab Tourism Capital for 2015.
This is why protecting and promoting culture is a key focus in our development projects, such as Heart of Sharjah. A 15-year heritage restoration and development project, Heart of Sharjah has already been registered on UNESCO’s tentative list of World Heritage Sites – a landmark achievement that clearly reflects the significance of the archaeological and historical heritage of Sharjah. Closely associated with Heart of Sharjah is the Al Bait Hotel project, the region’s first traditional Emirati hotel, which will give visitors a chance to experience the hospitality that we have become known for in a setting that reflects true Emirati traditions.
The development of the arts is also very important to Shurooq, and we are extremely proud of the success of Maraya Art Centre, which has quickly made a name for itself as a progressive contemporary visual arts hub. Through its various initiatives, the most recent of which is the launch of ‘1971’ a new design space at The Flag Island, Maraya is nurturing the growth of a healthy and inclusive art scene that is deeply rooted in the community.
What are the potential business opportunities that investors can explore in Sharjah?
Because of its diversified economy, business opportunities in Sharjah are extremely varied. We have a very strong SME sector, which is well represented in terms of small industry. In terms of the sectors that offer the maximum potential for growth, market research has identified travel and leisure, health, environmental services, and of course logistics which we have already discussed.
The UAE’s geographical location makes it easily accessible to numerous markets and Sharjah furthermore enjoys a strategic placement in the UAE and greater GCC. When you take into account the continuing demand for different experiences, the growing expatriate population, government investment and rising disposable income in Sharjah, it becomes easy to see that new opportunities in the travel and leisure sector abound. Currently, we expect the market potential to reach AED1.97 billion by 2020.
Together with Shurooq, the Sharjah government is constantly working to initiate tourism and leisure related projects and to open pathways for attraction to the emirate of Sharjah where they can build hotels and yield successful investments. Sharjah also has numerous tourist and historical landmarks and strong tourist attractions. The UAE is also succeeding in making a name for itself in the healthcare sector as the healthcare hub in the region. In this respect, the Sharjah healthcare sector is expected to grow significantly powered by the increased demand for specialized services that has prompted the initiation of several giant projects and state-of-the art medical facilities currently being set up in the Emirate, most notably the Sharjah Healthcare City.
The industry is expected to reach AED5.6 billion in 2020, growth which will provide numerous openings for foreign investors to enter this burgeoning market and invest in solid projects that offers excellent exit possibilities.
Environmental services is another key sector and one in which Sharjah is taking the undisputed lead, with the environment sector’s market potential projected at AED 1.3 billion by 2020. Sharjah has the largest waste management and treatment factory, making it an ideal market for the environmental technology and equipment, in addition to the self-innovation in the area of green technology.
Furthermore, the UAE enjoys sunny weather all year long making it an ideal platform for sustainable and renewable energy enterprises. Through continued collaborations with all concerned sectors, Shurooq is actively working to attract and establish sustainable projects that do not cause harm to environment and establish Sharjah as the “Green Emirate”.
With an aim to create destinations and opportunities for investors, what has Shurooq achieved from its objectives so far?
The three biggest success stories thus far are, undoubtedly, Al Majaz Waterfront, Al Qasba, and Al Montazah. Not only have these three leisure destinations become ingrained in the social fabric of Sharjah but they have also succeeded in attracting international brands to the Emirate, many of which had no representation in Sharjah previously.
We are also looking forward to delivering a number of projects currently under development in the near future. Al Jabal Resort, The Chedi Khorfakkan has already received widespread recognition, having won the ‘GCC Hospitality and Leisure Project of the Year’ at the 5th annual Middle East Architect Awards and will mark the entry of the internationally reputed hotel management company GHM into the UAE. Another landmark project is the development of Sir Bu Nuair Island. One of Shurooq's largest initiatives to date, the 13-square-kilometre island development will host mix of luxury and comfort on one of the UAE’s most beautiful natural treasures and promises to be a destination unlike any other.
About Elie Armaly
Elie Armaly joined Shurooq as Director of Business Development after 20 years of in-depth experience in the hospitality and real estate industries, having held senior managerial positions with international chains, such as Hilton International, Radisson SAS, and one of the UAE’s leading business groups as their real estate Business Development Director, where he was successful in securing joint ventures and land acquisition agreements.