Middle East Construction & Real Estate Podcast

An Insightful Journey into Middle East Real Estate with Rob Devereux, CEO of Brookfield Properties

• Jonathan Eveleigh • Season 1 • Episode 1

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We're thrilled to bring you insights from none other than Rob Devereux, the Chief Executive Officer of Brookfield Properties, Middle East. Buckle up as we embark on Rob's whirlwind journey through the construction and real estate industry, spanning continents from South Africa to the UK, from Australia to his current realm, the Middle East. This episode peels back the layers of the complex ICD Brookfield Place project, a collaborative effort between Brookfield Properties and Investment Corporation of Dubai, transforming Dubai's skyline.

No sector has been left untouched by the COVID-19 pandemic, and construction is no exception. Gain an insider's perspective as Rob shares his experience navigating this challenging time, and learn how technology, specifically AkinX, became a game changer in keeping information flowing smoothly. But that's not all! Rob also gives us a sneak peek into what's coming next for Brookfield Properties, detailing ongoing projects and future ambitions. This episode is sure to leave you with a richer understanding of the Middle East's construction and real estate world, and the instrumental role Brookfield Properties plays in shaping it. Don't miss out on this enlightening conversation.

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Jonathan:

Welcomne everyone to the Middle East Construction and Real Estate Podcast, or MECRA for short. Firstly, thank you very much for joining us. My name is Jonathan Evley and you might know me from my 23 years of working in Dubai with Al Maboud Alang, later Langer Walk and for the last 11 years with Cancerhab. Or, if you're old enough, you may have known me in the UK back in the late 80s and 90s when I worked for John Lange Construction before being transferred to Dubai in 2000. But whether we know each other or we don't, thank you for joining us and we very much hope you enjoy this and subsequent MECRA podcasts and find them both informative and entertaining. Just a few notes before we start.

Jonathan:

Our intention for MECRA podcasts is to learn from some of the Middle East's leading construction and real estate professionals about key topics or developments affecting the industry Most good, but also some which may be not so good. All MECRA podcasts will be a maximum 30 minutes long. Anyone interested in joining us as a future guest or would like to suggest future topics, please feel free to contact us either via our LinkedIn or Instagram pages or by emailing MECRApodcast at gmailcom. And anyone interested in sponsorship opportunities on future MECRA podcasts, again please contact us via LinkedIn, instagram or emailing MECRApodcast at gmailcom. Thank you, okay, let's get started. I am thrilled to be in discussion today for this episode of the Middle East Construction and Real Estate Podcast, or MECRA for short, with Rob Devereaux, chief Executive Officer of Brookfield Properties, middle East. Rob, welcome to this inaugural episode of the MECRA podcast. I'm delighted, I'm really delighted and grateful you've been able to join us for this first episode.

Rob:

Hi, jonathan. Firstly, I'd like to thank you for inviting me to join your podcast An exciting new chapter for you, and congratulations on getting this off the ground. I'm sure it will be very well received and I'm certainly very honored to be your first guest.

Jonathan:

Thank you, it was very kind, Rob. The answer is exciting. So thanks for that and if you're okay, let's launch straight into it. I'm good to go Great. So maybe firstly, just to put some context around this discussion, could I get you to introduce yourself maybe a bit of career history and what brought you to Dubai, that sort of thing and outline then your role at Brookfield Properties and then give some background on what is Brookfield Properties itself?

Rob:

Of course, Jonathan. Firstly, I'm sort of classifying myself as a global citizen. I'm South African, born and educated. Very shortly after finishing my college degree, I moved to the UK and started my career in the UK, actually with an infrastructure construction company. I was there for about four or five years and in that time applied and then subsequently immigrated to Australia and I in Australia started working for a company called Multiplex in around 2004.

Rob:

In 2007, Multiplex approached me and asked me to come to Dubai. At the time I had no idea where Dubai was and had to look it up on a map and agreed with the family to move here and really be here. Ever since and in the time actually, Brookfield bought Multiplex in 2008, shortly after I moved to Dubai, and with that I went on a journey with Brookfield. I worked on their first real estate investment in India. They subsequently now have over 50 million square feet of commercial office space in India and then in around 2004, I came back to Dubai and started working on Icedy Brookfield Place and moved into my position as CEO of Brookfield Properties in the Middle East.

Jonathan:

that's great introduction, Useful scene setting. Thanks it very much. Is a career experience that you've got, so thanks for that. Just following on from that, Rob, If I understand correctly, ICD Brookfield. So what I'm suggesting is the actual developer behind your project in DIFC, ICD Brookfield Place? It's a joint venture. Is that correct? If it is, maybe you could just explain the JV and the reasons for forming it and what the objectives of doing so.

Rob:

Yeah, absolutely, you're 100% correct. It is a 50-50 joint venture between Brookfield Properties and the Investment Corporation of Dubai. I guess, just a bit of background on Brookfield Properties. Brookfield Properties are a global organization and actually it is the arm of Brookfield Asset Management that manages the real estate investments for the parent company. At the moment, brookfield Properties manage over 800 properties globally, 330 million square feet with about 90 million square feet under development and we're across nine countries with over 7,000 employees. Just quickly, on the Investment Corporation of Dubai, they are the Dubai Sovereign Wealth Fund. They own iconic assets such as Emirates Airlines. They have the largest shareholder in EMA and a number of the local banks.

Rob:

Icd were known to Brookfield. They were actually typically the way Brookfield operates is they raised funds or limited partners and they then invest those funds and manage them on behalf of the partners, and ICD was actually an investor in Brookfield Properties funds. They recognize Brookfield's expertise globally, certainly in commercial real estate, and, I think, also identified that there was a real lack of, I want to say, premium grade office buildings in Dubai. And that's really where the conversation started and Brookfield came in at a look and I think the two parties agreed that there was certainly an opportunity to bring to the market the first real premium grade office building in the Middle East.

Jonathan:

Okay, that's again useful, because what I'd like to do actually now is just sort of look at the project itself in a bit more detail. So ICD Brookfield Place, what is it? Maybe you could just give some context to its component parts and facts and figures, just give an overview of what the project is and we'll start looking at that in a bit more detail.

Rob:

Absolutely, john. I mean, it has been my life for the last nine years, so it's very, very easy for me to kind of reel off. So, essentially, we started in 2014 with the design competition invited for really signature architects to submit, ended up selecting Foster and Partners, which now, I believe, is one of the iconic buildings in the skyline of Dubai. We put the first shovel in the ground in January 2016 and our first tenants moved in August 2020, actually at the heart of COVID, which is another story and real forward just under three years. We're now 99% sort of least under offer, which is a phenomenal achievement from the team. So just sorry to cut across you there. No, no, carry on, I was just going to say so.

Rob:

Basically, we're 1.6 million square feet of GFA. Of that, 90% of the space is office, 10% is retail. We have over 130 tenants who are committed to the building at the moment, which is. We have a similar size building in London 99, 100 bishops gate and it has about six or seven tenants. It just shows you kind of the same scale building but a lot more work with similar stature companies, just much smaller footprint for the Middle East. We have over 50 left in the building, which is very unique for this market. We will have a population of between 6,000 and 9,000 people who will come to the building every day once it's fully fitted out, with the tenants doing their foot out, and we have over 2,700 car parks, so one of the deepest basements actually in the Middle East, I believe.

Jonathan:

That's impressive. It really is, and I agree it's one of the most iconic structures on the landscape, the skyline of Dubai at the moment, for sure. So yeah, it's an impressive set of credentials on such a project for sure. One thing I wanted to sort of perhaps interrogate a little bit further in amongst those facts and figures is what do you think makes ICD Brookfield Place different, what makes it a bit special versus other mixed use developments in Dubai or even in the region? What do you believe makes it special?

Rob:

So I think one of the I think there are a number of factors, I don't think there's any one single factor I think the fact that Brookfield is not a developer who then develops and sells. Brookfield is really a developer, owner and manager of real estate. So anything we do really is for the long term. So there are no shortcuts and in fact, the mandate that we had from shareholders was deliver a building that could be picked up and dropped in London, new York, sydney and really fit in as a global asset.

Rob:

So I think Brookfield has this mantra of we don't landscape, we people scape. So it's really it's not only about the function of the building, but it's also the livability, the immunity that the building provides. We go to extra lengths to create an environment that people want to spend time in the building. If you ever get to visit the building or any of your listeners do, we have something called the summer garden, which is a fabulous indoor space which is landscaped and it's a very expensive space to deliver. It doesn't generate any revenue, but it really is the hallmark of, I would say, a Brookfield building and we also.

Jonathan:

Sorry, do you want to say anything? I was just going to say I have been fortunate enough to visit the building on a couple of days and I would encourage anybody that's got the opportunity of going and having a look at it, because I think until you do go in and experience the space and the amenities, you really do start getting a feel of what. In my question, what makes it different to other developments?

Rob:

Yeah, and I think the bottom line for us ultimately it is about the real estate and obviously we need to make a return on the real estate and we, our customers, are our tenants, who are multinationals.

Rob:

There's a massive war on talent at the moment for these multinationals and really one of the ways that they put themselves ahead is they commit to the best space. I think internationally there is a move to quality and the tenants come to our building because their staff like to be in these places, so that's really the bottom line for us In terms of the end result.

Jonathan:

I think all of what you've just described there is very evident the ethos behind the way Brookfield goes about its developments. All I'd like to do is just backtrack a little bit and just talk about the actual delivery of the project. I think it's fair to say the UAE is being, and probably still is, very much a mixed landscape of project delivery with, yes, many successes, no question, but also many, and, dare I say, possibly even more, examples of failures in delivery, whether it's poor quality, late completion over budget, adversarial cultures, projects often ending up in major claims situations and litigation. And that's even before you start looking at health and safety standards and any new innovations or modern methods of construction that may have been used. So, in terms of the actual delivery of the project, again, why do you think it was so successful? What were the major keys to its success? Was it collaboration or pre-planning, the design team you put together? What were those ingredients, if you like, for being such a success in delivery terms?

Rob:

I think you hit the nail on the head there, john Maybe again from the outset, really wanted to create a team that was entrenched in collaboration and work together and, again, being a developer owner manager, we had a real vested interest in getting this building finished and open as quickly as possible. So we, from the outset, we put together a highly qualified team of professionals and those are consultants and really selected the best in each discipline, if you like, and we bifurcated each of the experts so that, yeah, we were dealing with the individuals and the principals from the organizations and most of these organizations Brookfield had prior relationships with. We still ran a competitive process, but it was a very selective group of people and we knew that if ever we had any issues, we could take it to the chief principal and make sure that we were getting the right attention that we needed and we could get the focus that was needed from the team.

Rob:

I think on the actual construction delivery side, I mean, as you would full know, the region is fraught with challenges and it is a very adversarial arrangement between contractor and client and, unfortunately, I think, the contracts are almost set up for failure and we were fortunate that we have an affiliated entity in the region, multiplex, who I spoke of earlier, and we made it very clear to ICD that if we were to deliver this project it would be a negotiated arrangement with multiplex. And so we actually set up a contracting arrangement with multiplex, that we worked very closely with them. They were involved from the outset in the design of the building so they could bring constructability smarts to the table early on. Yeah, they were consistently giving us reference points from a costing perspective and guidance, so we didn't go into a tender with expectations from cost and those expectations not being met. So I think it was just a very much in alignment of everybody's focus and also very clearly describing our objectives, which was to deliver the best commercial office building in the region.

Jonathan:

I think the two things you've highlighted there is being able to assemble a team that you've already got existing relationships with, and the second part of it is the piece about getting a contractor involved early and allowing them to bring things to the table. So often we see short times for designers to put together a decent design and then short times for contractors to try and bid on that design and put a sensible price together, and everything is a bit too rushed, whereas what you're describing is that, that sort of, as I call it, pre-planning period, where people can come together and you effectively get the project right almost before you start, don't you? So I think that's very interesting. The other thing I was going to ask, again on the sort of back of what you've described in terms of that team, the design team particularly, I guess a number of them were based in different parts of the world. You must have had people in different countries, so did that mean you had to use any sort of integrated information sharing type tools? Did you use that type of thing?

Rob:

Yeah, we did. I think the key. The project went through different stages and cycles, if you like, and, as I said, we use Foster and Partners as the design architect and they had continued involvement. We also mandated that we wanted to design in accordance with the British Council of Office standards because, yeah, we knew that that would create a recognized benchmark in this market and so the early phases of the project were predominantly run out of London and the other than Foster and Partners. We also selected the players who sort of had a foothold in both the Middle East and in the UK and so that at a point in time when the project transition to on the ground here that they were represented on the ground. So there was a fair bit of travelling involved.

Rob:

In the early stages we set up AkinX multiplex use AkinX in the region. So we set up AkinX as an information sharing tool. It was actually pre-COVID, so I think post COVID we most probably would have done a lot more remotely and through VC, but there was a fair bit of travelling involved at the time. Yeah, but it transitioned, I'd say, at sort of scheme design to more or less be 100% Middle East folks, sure.

Jonathan:

Okay, I just also want to hang on to that. That COVID discussion. You referred to it a bit earlier in the discussion and so part of the construction program was during COVID, or was it effectively complete, construction wise complete? What were the effects of COVID I guess is what I'm saying and how did you mitigate them?

Rob:

It was actually at the most critical time for us. We were racing to the finish line. We actually ended up finishing in August 2020. I think if it hadn't been for COVID, we would have finished maybe two or three months earlier.

Rob:

I think the whole team went through a really what's happening kind of mentality and fortunately, the Dubai government certainly allowed construction to continue.

Rob:

And I remember driving on the streets.

Rob:

I had a letter that I'd written to myself which allowed me to come to the site and the roads were completely empty.

Rob:

It was really a dystopian kind of environment. And I think the biggest thing is there was a lot of fear in both the project team and the workers on the site, because at that point in time we're talking sort of March, april, 2020, nobody really knew what COVID was about and people were fearful of COVID. And then we faced real practical challenges, like there was a ban on labor moving from Abu Dhabi to Dubai, so there were real implications on the program. So I think the team really put their heads together and worked diligently to make a safe environment and I think, because of the non adversarial environment, the project team rather than sort of going to head to head and a blame game. I think everybody just did the best they could under the circumstances to get it finished as quickly as possible and, as I said, there was actually a delay. But at the end of the day, I think the team did incredibly well to get it open when they did.

Jonathan:

Yeah, for sure, for sure, and I think you're right, it was that whole. It was a whole unknown, wasn't it? We didn't know how long COVID was going to last, and you know it was a couple of months or a year or more. And yeah, it was, it was. It was scary times, for sure. So, yeah, you're right, the team, the team did do well to to limit those, those effects, for sure. I want to just move aside, if you like, from the project and go back to the Brookfield property side of things, recognizing any confidentiality constraints, is there anything much you can tell us about what else you're currently involved in, what you may or may not be working on now, what your plans are for the future across the region?

Rob:

Yeah, sure, so yeah, when we, when we started this project what it said almost 10 years ago we, we were a team of about four. The Brookfield properties team is now grown to around 30 people. The lion share of the team is is actually involved in the day to day running off ICD book for place. So we, we manage that on, we manage it on behalf of the shareholders, and that's, you know, day to day property management. You know, managing third party service providers, the cleaners, the security companies and also just tenant relationships. So that's, that's a it's it's ongoing and it's it's a real job for the team. And the other thing is that we we made a lot of promises that we now have to deliver on. So you know, it's important that we continue to stay very much hands on and deliver on those promises.

Rob:

Sure, yeah, outside of that, we we have a development function that we we invested with actually to buy holdings in three retail assets in 2019. The beach in Jimera Beach, residences, city walk and Lamar. Two of those properties are we reviewing a repositioning and development on those and we we hope to get to market on those fairly soon. So you know, a big part of the team is working on that. We're also very involved with our India team, who, you know, amongst various verticals not only real estate, but also infrastructure and private equity have over $25 billion of assets under management in India, and so we're we're working with them on a project in the Maldives, which is a resort hotel, a brand that is actually owned by Brookfield, and we're also working towards delivering another Brookfield place in Mumbai. So so, so a lot on the go.

Jonathan:

Yeah, exciting times for sure. Yeah, 100%, yeah, okay, look, rob, sadly our time is up. It's flown by as I, as I would expected it to, and we could have gone on for much longer. There's no, no doubt about that. But we we committed when we started these podcasts of limiting them to between 20 and 30 minutes. So I think we've we've got about two minutes left to wrap up. So I know you're a very busy man, obviously through what you've you've just told us. So I want to really thank you for sparing your time to join us and for the insights and the information that you've you've shared with us. So a huge thank you for that. Good luck with everything that you and Brookfield Properties do in the future. It certainly does sound sound exciting. Particularly the Maldives bit. You've made us all very jealous and maybe, maybe in the future we could get you back on a future podcast for a bit of an update on on how things are going.

Rob:

Thank you, john, and it's been my absolute pleasure. You know you, you're, you're a, you're a figure within the Middle East construction industry. Yeah, I think a lot of people are sad to see you go in and we wish you all the best in your endeavours. So please drop in whenever you're in town and say hi, I will do for sure.

Jonathan:

That's very kind of you. Thank you very much indeed. Thanks, rob, and and good luck.

Rob:

Thanks, jonathan, thank you, bye, bye, bye.

Jonathan:

So that's it for this episode of the MECRO podcast. We hope you enjoyed it and found it interesting and useful. Thank you very much for listening. We really do appreciate it, because without people like you out there listening there really wouldn't be any point in us doing them. And a big thank you to the other people who have been involved in helping us put this podcast together. You know who you are, so a huge thank you. Further episodes in this series will be published in due course, so for now, thank you and goodbye until next time.