Can you give us an update on the construction of the Marriott hotel?
We are now well into the construction phase of the hotel, we are putting in all the piping and we are working together with the Marriott team and with the art and design team on this project.
The Empire Marriott Hotel is spread across 55,853m2 and includes the following:
How is Falcon Group involved in the construction of the hotel?
Falcon Group supplies the concrete as well as some other supplies and management services. There are a few groups that are controlled by Marriott. For example, the Marriott staff and the art and design companies.
How is the Marriott hotel going to fit into the Empire World master plan?
The Marriott hotel is part of the 2.7 billion dollar Empire Project. If you look at the design of the Marriott hotel in the master plan, it is going to be in the East corner of the Empire Project. It is one part of the project but it is independent. The whole Empire Project includes 5000 units of apartments, 300 villas, 11 office towers, the Marriott hotel and apartments, as well as many lifestyle facilities.
Is the Marriott hotel going to stand out from other Marriott hotels in other locations?
I would say that it will be a unique hotel. That´s not to say that it will be more so than the hotel in Dubai that everybody recognizes, but it will certainly be unique for this area.
Is this hotel going to become the new centre for business and conferences in Erbil and in the rest of Iraq?
Everybody knows that Marriott hotels all over the world specialize in the business sector. Here we are going to have all the facilities in this hotel to cater for business travel. Marriott hotels tend to have lots of large conference rooms for business people, etc. They are designed for the business lifestyle. I´m sure it will be a centre for business in the whole of Iraq.
The outlook for real estate in Erbil is for further growth. There is more and more demand and there is cash in the market as many investors are coming to Kurdistan. Everyone is looking at the opportunities that exist in Erbil. It is now one of the most important cities in Iraq for business.
What is the outlook for real estate in Erbil, in Iraqi Kurdistan and in the whole of Iraq in general?
The outlook for real estate in Erbil is for further growth. There is more and more demand and there is cash in the market as many investors are coming to Kurdistan. Everyone is looking at the opportunities that exist in Erbil. It is now one of the most important cities in Iraq for business. Kurdistan is acting as an gateway to Iraq for investors. Investment here is growing, there is a lot of investment happening in infrastructure, power, roads, etc. I think the outlook for real estate in Kurdistan therefore is also very good.
Kurdistan will act as the door to the rest of Iraq in terms of investment and growth. Furthermore if you look at the neighboring countries of Iraq, they are all more expensive than Iraq. There are problems with security in Iraq, but still everyone knows that Iraq can only grow in the market. I see a very positive future. I don’t see any risk of economic problems, there are just a few issues with security.
What makes the Empire World the largest project in the whole of Iraq?
There are two or three things that make the Empire the largest project in Iraq. Firstly, the idea and the plans for the Empire Project. There is an area for business, for residency, for hotels etc. all within the project. The land area is 750,000 m2 and the budget is 2.7 billion dollars. The project uses the best quality materials and the design is of excellent quality also. The companies that are going to construct it are all very professional companies. The location is excellent, it is about 10km from the airport and the centre of Erbil. We have already sold about 60% of the project. Not all projects in Iraq are like this one.
There are other projects in Baghdad and Basra but there is nothing as large as this, am I right?
Yes, that’s right. This is the largest project in the whole of Iraq. I have not come across any other as large as this.
Is it also one of the largest in the region? For example in Jordan or other regional countries?
As I said, I haven’t seen any projects in the Kurdistan region, or in Iraq that are as big as the Empire World. I think this project also competes in our neighboring countries.
Now, let´s talk about Falcon Group, can you give us an overview of the strategy for the oil and gas unit?
Falcon Group is a group of companies and we are known in the whole of Iraq, and also internationally. We have divisions in security, construction, real estate, agriculture and oil and gas. The oil and gas sector is the one that we are pushing right now. We have a large plot of land for warehousing, we have piping stores and service the big oil companies.
How big is the market for oil and gas services?
The market for oil and gas services is very big. If you look now, there are more than 40 companies trading in the region. Each company may have to drill 10 to 30 wells. So there is huge demand for oil and gas services. There are some big oil service companies in Kurdistan but there are few local oil services companies here and we are one of them. I think there are huge opportunities here.
Can you tell us more about the warehousing? What would you like to achieve?
We have a large piece of land in Erbil and so we are going to supply storage space for all of the big oil companies. We are going to provide warehousing and even further servicing for the oil companies.
What is your strategy to become the market leader in oil and gas services?
In all of the areas that we work in we try to become the market leader, not only in oil and gas. This is our business plan. In oil and gas, I hope that we will be the market leader in our country and we shall try our best to achieve it.
Can you tell us a bit about the security services you provide and your strategy for this division?
As you know all oil companies, not only in Iraq but in the whole world need security services. It is standard practice for oil companies. They need security all day, every day. We are providing security services for the oil companies and we are the first Kurdish or Iraqi company to provide these services. We are now the biggest Iraqi security company. Of course we are managed by expats, in order to benefit from their experience and in order to train the locals. We provide services to about 8 oil companies all over Iraq
What is your vision for Falcon Security?
Our vision for Falcon Security is to increase our technology. We are sure that increased technology will take us up to the next level. This means security cameras and technology systems for the security of blocks and pipelines, both for the government and for the private sector.
Do you think that with the situation improving here, and with Iraq becoming more secure, there are still many opportunities for growth?
I hope the situation in the whole of Iraq gets better. I think every year we will get better. If you look back, that is the case. I hope that with the next elections in 2014 politics will change and there will be more democracy here. I think it will be an important step towards a more open Iraq, much more like what we see in Kurdistan.
You are currently mainly providing security services in Kurdistan, but you want to expand and you have a license to do so, can you talk about your strategy for expansion into Iraq?
We already have security services all over Iraq. We have services in Baghdad, Basra, Erbil etc. The security here in the north is different from the security in Baghdad and Basra. We have a license from the central government so that we can offer security and construction all over Iraq. We have many large operations supporting the whole of Iraq.
What is your relationship with Marriott and what are the plans for extending that relationship?
We have a strong relationship with Marriott due to the Empire World Project. Our agreement with Marriott is to build the hotel but now we are very close to signing contracts for new hotel projects with Marriott in the region: in Erbil and in Sulaymaniyah, and then potentially in the future in Baghdad and Basra. Marriott Group has many different types of hotels; there are the JW Marriott hotels which are luxury hotels, there are the Ritz Carlton hotels which are also luxury hotels, there are the Marriott hotels which are 5 star hotels, there are Marriott Residence Inns, and Marriott Courtyard hotels. We are available to work with any of these brands.
Can you tell us about the quality of the units in the Empire World project?
The Empire Project is not only the biggest project in Iraq, but it is the best quality project in Iraq also. From the very beginning we focused on the quality of this project. It is our target for the market in the future.
When you look at the quality of this project, you can start by looking at the design and plans which are of the best quality. The quality is seen in both the plans and in the construction. To provide this top quality you have to hire the best companies and the best management.
If I purchased a unit today, what would be the value of that unit in 5 years' time?
The people who purchased villas 2 years ago, bought them for 260,000 dollars. The villas now cost 1 million dollars. Two years ago an apartment cost 120,000 dollars and now they cost 300,000 dollars. The values have gone up threefold. The values are only going to go up. Next year it will go up by 30%; this is the average increase that we have seen since 2007.
What are the factors that will push the market to go up?
The main factor is security in the area. Erbil is now the centre for business in the whole of Iraq. There is also the fact that the government has opened all doors to investment. The government fully supports investors, from giving them land to services, tax benefits etc.
When more investors come here it means that the quality of developments on the market increases, there are more people coming to live here and do business here. There is money in Kurdistan, it is not a poor region and so people begin to understand and demand quality.
There is no leverage in the market, so when someone buys an apartment they pay for it without a mortgage. There is no financing here, which is an important factor.
When people come to buy an apartment here, they pay in installments, both locals and foreigners. When people come to buy units here whether it be residential or office units, they can pay over 3 years in installments, but there are no loans or financing. There is cash here, which is good for investors. It means the market cannot come down so easily. If you look at the rest of the world a few years ago, the whole market came tumbling down, but not in Iraq, here the market went up. The cash makes the market stronger.
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