Interview | Wednesday, 30 July 2008

Taking the chair, taking the plunge

While many say he was just lucky, Alan Camilleri’s career achievements at such a young age must realistically be a reflection of a wide range of qualities and virtues he possesses. Is patience one of them? David Darmanin puts him to the test.

Alan Camilleri does not like to be interviewed. Surprising, when considering that his first step on the career ladder was as press officer for none other but Lawrence Gonzi himself.
“This is about Dhalia right?” he hesitantly asks before going for any introductions. When his recent appointment as chairman of the Malta Enterprise is mentioned he utters: “F*#k.”
Surely, this was not a good start but at least it did break the ice.
As though making an attempt to justify using the expletive, he said: “I made it a point not to grant any interviews related to Malta Enterprise so far, and if I do now, I’ll have problems with those members of the press whom I have declined to answer.”
Camilleri holds the chair of both Dhalia Real Estate and Malta Enterprise. It’s a small country. But when Dhalia is after foreign investors who are in turn after Malta Enterprise, doesn’t Camilleri feel a tad uncomfortable?
“Before I accepted the position at Malta Enterprise I was ensured it would not create any conflicts of interest with my position at Dhalia. Naturally, like any other government appointed director there’s a code of ethics which I, like anyone else on the board, have to abide by,” he said. “Dhalia does not need Malta Enterprise to reach out to foreign investors. The interests of the two positions certainly do not overlap.”
The board at Malta Enterprise is very mixed. While most members clearly bring in a wealth of experience in investments, the reasons why certain others were chosen raise questions, which were in turn asked to Camilleri, ensuing further signs of hesitation.
“It’s not fair to ask these questions,” his Public Relations representative commented before Camilleri could answer. Out of the frying pan, into the fire. Maybe I should have started with the easier questions.
Only when Camilleri was reassured names of board members would not be directly mentioned and reminded that he reserved the right not to answer, he said: “I think the board at Malta Enterprise is a 360-degrees board. There’s the right mix of people coming from different backgrounds. I’m very happy with this diversity as we come with different levels of experience so we compliment each other a lot.”
OK, but what about the long-standing friend of Camilleri’s on Malta Enterprise’s board? What would a media professional, who also enjoys a standing commercial relationship with Dhalia, with no apparent experience in finance and investment, bring to the board?
“I have absolutely had no say in the appointment of Malta Enterprise directors. I can assure you, I discussed the members on the board the day cabinet approved them, not before. I did not suggest any names either.”
Probed on speculations of another board member being endorsed by Richard Cachia Caruana, Camilleri said: “I don’t know, but even if this was the case… so what? As long as she’s capable for the job I cannot see where the problem is.”
There again emerged the voice of the bystander. “Undeserved,” he reiterated, breaking the silence that followed Camilleri’s reply.
So the discussion swiftly moved on to rent law reforms, allowing Camilleri put his guards down for a moment.
“The reaction (to the recently published white paper proposing a reform in rent laws) from the side of the Federation of Estate Agents is over all very positive. Any new policy addressing the current system is considered to be positive. Of course, what is proposed is such a break to the current system that change has to come in increments,” he said.
Does this mean prices are soon expected to slump?
“The changes proposed do not address the current demand to the rental market. There is also a generational gap, so prices of current residential properties will not be addressed by the reform.
“But the reform is not suggesting a homogenous change and the property market is vast, so different areas will of course be affected in a different way. We are not seeing that the retail, entertainment and HORECA sectors will be in any way affected in the immediate term, with the exception of the five prime locations. There will also be pressure on office spaces – but I don’t think this is an issue directly related to the rent reform.”
Related to what then?
“We have seen the prices of showrooms going down, or the prices of certain types of bars – but this is about location. I am sure prices affected by the rent reform will come about in the long term, as a number of properties will start freeing up slowly. But this of course cannot happen without the right investment programme – meaning that some properties will require refurbishment before they are released on the market.”
When FEA secretary Steve Sant Fournier was interviewed by this newspaper, he had admitted that property prices have in fact been dwindling.
“I’ve been saying the same thing since I’ve been with Dhalia,” Camilleri said.
In January, only weeks after Camilleri himself successfully managed Malta’s changeover to the Euro, Dhalia organised a grand sale, slashing down property prices by an average of 10 per cent. The marketing stunt was unheard of in Malta up until then.
Rumours that property prices had gone out of hand in respect of their real value had obviously spread. And yet, the general comment by industry members at the time was that the problem was temporary, that it was due to a lower purchasing confidence due to the changeover. The slowdown in property sales witnessed in the first months of the year was soon to come back to its full glory, industry specialists had said.
When approached by sister paper MaltaToday back in January, Camilleri himself had said that the property market’s contribution to the national GDP over the previous two years had largely remained the same. “Although there is an absence of consolidated statistics on property sales, the quick uptake of large scale property developments shows that the market is still vibrant and healthy,” he had been quoted as saying.
He still stands his ground on upmarket property, albeit more direct on the property price slump of other types of property.
“In general, upmarket properties have been evaluating by 15 to 16 per cent, but then there is excess capacity in certain areas. Prices of midrange apartments and flats have been stabilising. Such properties have either stopped evaluating or simply gone down in price. But this situation has nothing to do with what’s happening in Spain, in the US or in London. This is not a crisis.
“This is normal,” he added. “Every five year period, the market goes through a cyclical change. We passed through this phase six years ago. So this has nothing to do with the credit crunch being felt in other countries – Malta has not been affected at all in this respect. Banks in Malta have been very prudent and Dhalia fully supports this.”
Then again, if property prices leaped to the extent that an average middle-class first-time buying couple is not granted a bank loan for property, how can current prices reflect the market value? Aren’t prices normally set by the market? Or are they set by estate agents?
“I think this is a very wrong perception – we don’t decide on value, we just give advice,” he started. “The situation is due to property prices having increased faster than the inflation rate. The problem is that the mortgage to income ratio is stretched. But people’s expectation have to change as well, the demand for three-bedroom properties is still strong, even among first-time buyers.
“I can assure you that 90 per cent of the times, the seller wants a higher value than what we give. We give the market value. We don’t inflate property prices. I can tell you that whenever Dhalia compared its valuations to those done by other agencies on the same properties, we always came out as the agency that offers the best value. There were also times when after turning away offers for sole agencies on grounds of the asking price being too high, owners came back to us after having realised that we gave them the right advice. So we don’t set the market price, remember that we have to protect both the seller and the buyer.”
Back to the grand Dhalia sale. Property market analysts at the time had pointed out the subtle difference between the asking price and the actual value at which the property is sold. In normal circumstances a bidder is allowed to negotiate on the asking price, with the final result of acquiring the property at a lower rate than that advertised. The speculation on the Dhalia sale was that if property consultants were not budging on the asking price, using the excuse that properties had already been discounted, the sale was allegedly a mere marketing gimmick.
Responding to this accusation, Camilleri said: “The 10 per cent sale was not across the board, and in our advertising campaign we made this clear. It was an average of ten per cent on selected properties – there were situations where we sold lower than that.
“If there was a property advertised by three agencies at Lm100,000 and we featured it at Lm90,000, the maximum we could get for it was Lm90,000. Actually, we were more likely to get Lm88,000. Other estate agencies advertising it for Lm100,000, still stood a good chance of getting Lm95,000 for it. So I think this speculation is all sour grapes. I think we reacted to something innovative in a period when the market was a bit slow. We deliver value and will come up with other ideas in the near future.”
Alan Camilleri is still in his early thirties, and his record so far places him on the podium for being one of the highest achievers in Malta’s fastest developing careers. This may also be the reason why he is perceived to be an ambitious person. But to this, Camilleri coldly said: “I don’t give myself labels.”
OK, maybe he’s ambitious and he doesn’t know it. But he must have prospects for the futures, if not plans on further developing his career.
“I do but I will not give them away,” he said. “I’ll have you discover them and I’ll let you interview me then.”
Maybe he does like being interviewed after all.