With a masters of architecture in urban design from Harvard, Oussama Kabbani is the chairman of the board and general manager of Millennium Development, a wholly-owned subsidiary of Saraya Holdings. Talking with Executive in a one-on-one interview, the GM discusses Millennium’s operations in the MENA region and beyond.
E How would you describe Millennium’s ownership structure?
Millennium Development International (MDI) is a Cayman Island company, owned by Saraya Holdings. The head office is in Beirut, while the only second operational branch is in Dubai at the moment. MDI is in the process of setting up two new branch offices, one in Malaysia and one in Saudi Arabia.
We were acquired by Saraya Holdings last year, and thus our management structure changed a bit. We now benefit from being affiliated with a larger player in the region, which gives us a continuous work stream and room to expand and grow in the market, so we can capitalize on our core competencies. It’s a great combination.
E What does Millennium actually do for Saraya Holdings?
Millennium’s expertise is in development management services, which means we undertake work on behalf of developers and investors in real estate — from securing the opportunity to exiting it. In other words, we do everything that a professional developer does, but the investment is not from MDI. To that end, we set up the development strategy, hire all the consultants needed for the job, guide them and ensure their delivery on time and within budget. Such tasks require skills in business development, urban planning, architecture, finance, legal, marketing and sales, as well as construction management. MDI offers all these management skills to its clients.
For Saraya, typically we collaborate with their professional development team on the first phase of their projects, based on Saraya’s objectives and destination strategy. Sometimes they commission us as a subsidiary to create the business development phase — to evaluate new sites identified as new destinations through delivering a financially viable and feasible master plan. Once the board of Saraya approves the master plan, Saraya Development Group assumes the responsibility from that point onward through design development, marketing, sales, construction and operations. So this is what Saraya Holdings requests from us and we offer similar services to other clients in the marketplace.
E What projects does Millennium currently have underway, with Saraya and other companies in the region?
Our expertise is primarily in large-scale urban developments. I insist on the term ‘large-scale’ and ‘mixed-use developments’ because indeed this is really our core competency, and we are extremely competitive in the know-how of such projects. For example, we are currently working as development managers for a new city in South Johor in Malaysia, which is positioned to be a new international destination in Southeast Asia. It will include a world class financial district, leisure clusters, commercial clusters, golf communities, business parks, residential and health facilities. The profile of our clients on this job, a consortium of high powered investors and developers — such as Mubadala, Saraya Holdings, Kazanah and others — demonstrates the level of professional competency that we have secured in the marketplace.
We are also involved in the development management of a new city for one million people on the Caspian seashores of Kazakhstan, in Aktau. We have already finished the master planning and the development strategy of such a massive project, and the client is currently raising the funds to launch the construction.
We are also working on projects in Saudi Arabia, primarily in Mecca where we are currently engaged in two projects — Jabal Omar and Jabal Khandama. We are also offering owner representation services for the construction of an industrial site for the Jeddah Cable Factory in Rabegh. Also, we have a project that we will be launched soon in Oman as development managers for a small town. Meanwhile, in Beirut we are engaged in the construction of a luxurious residential compound in the Solidere district, and manage the development of an exciting downtown mixed-use project for the landmark company, designed by the famed architect Jean Nouvel.
Also, there are many other projects that are in the making. As a business strategy, we accept to be engaged every year in three to four big projects; some of them keep us busy for three to five years. Thanks to the reputation and delivery skills we have developed over the years, we’re quite busy all over the region.
E You said you insist on large-scale, mixed-use developments. Do you think that mixed-use development projects have become a trend in development in the region? Nowadays it seems like this ‘city-making approach’ within cities is becoming a popular tendency. Would you say it is the time for such a trend in the MENA region?
This region is witnessing an unprecedented growth period. The first cycle of growth was in the 1960s — with the first oil boom. The investment during that period primarily targeted infrastructure and public buildings: meaning hospitals, scho- ols, etc. 40 years later, the current oil boom arrived to a region that is relatively highly experienced and ready to grow, so the added value both physically and socially is quite apparent. That’s why it’s very normal to see large-scale mixed-use projects, because the area has the knowhow and it was ready to absorb such projects.
I would say that the reconstruction of downtown Beirut using the Solidere model was a big success in the 1990s and a good eye opener to the need for planned mixed-use projects. It was perhaps the first large-scale project of its nature in the region. With the success of Solidere — and yes, I’m contributing a lot to that — people realized that if you do large-scale mixed-use projects, you control the quality of the environment that you are in.
Obviously, when there is a lot of money, lots of land, a lot of demand, with the right leadership and vision, all of these things together result in what you are seeing today.
E What is the strategy that you are implementing for your latest projects? As such a small company, how do you deal with competition?
There aren’t many companies that offer our services in the marketplace today. Usually, large-scale developers have their own teams, so they don’t need such services except when they need to deliver in a relatively short period of time — which we can do due to our size and competency. We’re quite fortunate today because the market is growing and even experienced developers can’t cope with the growth, so they outsource their work to companies like ours.
Our outfit is also ideal for all the start-up development companies that want to be in business without immediately having their teams. Not only that, but there are a lot of real estate funds that are looking for development managers like us. That’s a big marriage between funds and us. Not too many people in the marketplace offer what we do, because developers work for themselves and don’t offer their services to competitors. So far, we managed to have a huge portfolio of work. And what distinguishes us from the competition is the quality of work that we produce, the efficiency, and the know-how.
E What are the current issues and concerns that Millennium faces?
Having our headquarters in Beirut was a concern throughout the last couple of years due to security issues. We are a local company with a regional outreach, so whenever the stability is compromised, our outreach is burdened. We are hoping that this is behind us now. The second challenge we face, like many in the same industry, is staffing and attracting the high-caliber professionals that are needed to sustain our growth and business model. Also, we are trying to diversify our business offerings in case the markets change. In that respect, we’re currently embarking on some investments for the account of the company, to build an asset base for the future.
E Does Millennium take part in any Corporate Social Responsibility (CSR) initiatives?
Not really, because we are not developers, we are consultants. Developers typically get involved in CSR. We consider ourselves still relatively small in terms of our operational size. But we are quite keen about staff development — which is part of CSR. We offer promising career growth in international markets. We’re looking towards professional training, and towards academic growth of our staff — meaning people going back to higher education and then returning to work with us. To that end, our corporate responsibility has been towards our staff more than anything else.
However, our mother company Saraya Holdings has multiple CSR initiatives that concentrate on the pillars of education, culture, environment and sustainability, in each country they reach; they study what the community needs and act accordingly.
E How do you see your position within the region?
Millennium and Saraya are definitely part of a legacy of city-builders that started with the late Prime Minister [Rafiq Hariri]. We feel very proud that we are professionally continuing that legacy, because his vision was one that is bigger than the country, and now we are taking such a vision globally. Taking a destroyed city and rebuilding it helped us learn about city-making and real estate development the hard way. Lebanon is exporting that expertise.
Our success is a very important testimony to the success of what Beirut, under the vision of the Hariri, was able to achieve and is now being exported to faraway places like Kazakhstan and also hopefully to places like Iraq.
