My Morning Routine: Mohamed El Taher, CEO of Al Ismaelia for Real Estate Development
My Morning Routine looks each week at how a successful member of the community starts their day — and then throws in a couple of random business questions just for fun. Speaking to us this week is Mohamed El Taher, CEO of Al Ismaelia for Real Estate Development, the first real estate company in Egypt to focus on acquiring and renovating heritage buildings in Downtown Cairo.
I’m Mohamed El Taher and I’m the CEO of Al Ismaelia for Real Estate Development. We specialize in renovating old heritage buildings in the Downtown Cairo area. I initially graduated as an electrical power engineer, but after a brief period working for Unilever, I went on to get my MBA in finance. I then shifted my career to real estate investment and finance. It’s been 14 years since I made this shift, and not a single day passes without me being glad of it.
Al Ismaelia is a small organization, and our setup is almost like a startup, with about 15 people in the team. We work very closely together to get things done. This is especially important because doing real estate development in Downtown is really like entering unmarked territory with no manual. We face a lot of challenges, ranging from issues with tenants, to unexpected surprises in the structure and design of the buildings, to procuring approvals and licenses from the government. But it’s a very dynamic field. We’re also very interested in the arts, the cultural and startup scenes, and we work hard to support them. Usually my day includes a couple of meetings with people from the startup community who want to rent space Downtown. Working with organizations to see how we can bring people back to Downtown is also a big part of what we do, so we plan and hold events, including art and photography shows, workshops, and discussions.
I’m really not a morning person; I’m at my peak at night. I wake up at 7:30am and usually reach the office by 9:30am, so I take most of my meetings early in the morning. But when I have time for myself, I leave the most important strategic documents — the ones that require focus — to the later part of the day. I prefer to work on those from 3pm until about 8pm, rather than in the morning. So I can’t claim to wake up at 5am. In the past I tried to change this, but it was really a struggle, so I realized I just needed to capitalize on what I have. I focus better at night, and as long as my mind is clear, that’s more important than what time of day it is. I enjoy having a quiet setup to work in, because I always have a lot of ideas running in my head and can be easily distracted. So I give myself this quiet time, where I don’t answer emails or phone calls, and I can be very productive.
It is essential to me to have time in the day for my family. I like to hear a bit about their day, and make sure they have my attention and feel my presence for at least a small period of time every day. No matter what else happens, this is very important.
I also love reading and listening to audiobooks. I have a book-collecting addiction, and read as much as I can, as well as listening to audiobooks during my commute. Malcolm Gladwell is a brilliant writer, and I’ve read and re-read all of his books — he’s changed how I look at things. The first non-fiction book I ever read was The Seven Habits of Highly Effective People, which created a real paradigm shift in my life. Stephen Covey’s idea of “slow is fast and fast is slow” is one I always return to when I’m trying to align my team on an idea, or create a unified spirit between us as we work to achieve something. It helps me to be patient with the process.
Al Ismaelia for Real Estate Investment started in 2008. Our chairman, Karim Shafei, was behind the idea. He had a vision for renovating buildings in Downtown and partnered with our board members, who had similar ambitions. They wanted to focus on the Ismaelia zone in Downtown, so everything grew from there. There was a slowdown during the revolution, because no one, including the investors, knew what would happen — especially Downtown. Between 2011 and 2014, we made some acquisitions that were important, but not large. But as things started to stabilize in 2015, we were back on track and started to grow rapidly. I joined in 2016, and since then we have been very focused on how to transform buildings into livable, functioning spaces. In 2018, our new project, La Viennoise, really captured the attention of the media and won two prizes, which we were delighted about. We’re very proud of what we’ve achieved.
Al Ismaelia isn’t a day-to-day real estate developer, with huge pieces of land in urban areas. In a sense, we are always looking back in time to our beloved Downtown Cairo, and we are very specialized. Our current inventory is 80,000 sqm, which is quite niche. We know that, to make a difference to our company and the area we work in, we have to be selective in terms of what we offer as assets in our space. Our niche means we’ve had to turn down some lucrative prospects in order to partner with organizations that we’re aligned with. We’re trying to change the fabric of Downtown Cairo, to ensure that there’s a mix of people represented. Our vision is to have fuul sandwich carts next to upmarket buildings and residents — like the downtown area of any major city.
We are allocating a budget of EGP 150 mn for acquisitions for the next couple of years, as part of our strategic goals. It isn’t always easy to acquire the buildings we want, as there can be a lot of complexity in terms of ownership, but we’re very active right now in looking for new buildings. We also have a EGP 150 mn loan from the EBRD that is going towards renovation. So we’re focusing on the rest of our portfolio projects: the old French Council, Radio Cinema, and Cafe Riche. We have five or six buildings that we’re currently working on. The next building we’re launching is Radio Cinema, which will be finished in August this year.
Strategically, we always target heritage buildings in the Downtown area. This is really our business model, and it works. We look for buildings near our current properties, and as Downtown has 1500 buildings, we can’t target all of them. But in principle, we’re open to working on any heritage buildings in the area. Every building has an interesting story, in terms of its ownership, commercial set-up, how it was built, and how it has transformed.
At the beginning, people didn’t understand what we were trying to do. They thought we had a nice idea that would fail, and some even thought we were an NGO. We tried to be very clear: We’re a business, and we’re here to make money, but we have a different approach. It took some time but now we’re making news and headlines, and people are starting to see our vision. We’re making money out of old buildings. We’ve proven that it can happen. What’s great is that it’s good for everyone: The country, the people, our shareholders. It’s the perfect equation.
At an industry level, everyone is speaking now about Egypt’s real estate sector slowing down. A huge amount of inventories have been dumped in the market, and the emergence of many new, small real estate developers who are young in the business has also contributed to the slowdown. I think that by the end of 2019 or 1Q2020, the newcomers will face a tough stress test, and whoever survives will be hugely successful. We will also find big names facing issues in their operations. Because there isn’t the same absorption rate as in previous years, people feel the market is slowing down. Having said that, there’s always genuine demand in Egypt. With 100 mn people, getting married, having children, some making money during the bad times, and some selling because they’re moving, there will always be movement and demand in real estate.
What’s happening in the Gulf area at the moment is interesting, because it may bring more attention to the Egyptian market. We don’t have Dubai’s framework for doing business, but we’re stable and resilient, so you might see a shift in capital, towards doing business in Egypt. Some of that will be felt in real estate.
One maxim I try to live by actually comes from Brad Pitt in the film World War Z: “Whoever moves survives.” It takes courage to move forward, no matter what is happening. Sometimes you need to fight the market; you can’t just wait until the bad times pass. You always need to make sure you’re prepared, but when you settle into your comfort zone things usually don’t turn out well.