Why Damac chief is optimistic about Dubai


Why Damac chief is optimistic about Dubai
Hussain Sajwani, founder and chairman of Damac Properties

davos - He refutes possibility of an oversupply in the property market

By Staff Report

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Published: Wed 24 Jan 2018, 6:12 PM

Last updated: Wed 24 Jan 2018, 10:09 PM

Hussain Sajwani, founder and chairman of Damac Properties, expressed optimism and ruled out an oversupply scenario in the Dubai property market. Speaking to CNBC at the World Economic Forum in Davos, he said the Dubai realty market is "very healthy and stable".

"I don't see a danger of capacity because we have about half a million freehold units in Dubai. We're growing at least three to four per cent. We need a minimum of 15,000 units every year. In the last three years, we've produced less than 10,000 units. Going forward, I don't see more than 10,000 to 12,000 units. So, I see supply and demand equilibrium," explained Sajwani.

Referring to a stable growth of six per cent achieved last year, the chairman said he doesn't foresee the Dubai real estate industry experiencing a surprise such as the 2008 crash or extreme price swings like in 2013, when values shot up by approximately 30 per cent.

On his recent announcement to sell a 15 per cent stake in Damac, Sajwani said: "The question was: 'Would I be willing to sell some stake in the company?' For creating the liquidity, yes, I'm willing to sell. Is it 5 or 10 or 15 per cent? This depends on the market, price and timing."

He also spoke of Damac Properties' brand affiliation with US President Donald Trump. Damac has signed a deal with the Trump Organisation to operate two golf courses in Dubai. To a question if the brand could suffer as a result of the ebb and flow in Trump's popularity, Sajwani said: "We signed a commercial deal with the Trump Organisation to build two golf courses for us, and we opened the first golf course on February 20 last year. We're very happy with the design, the quality and I think it's one of the best golf courses, not just in the Middle East but around the world. Our second golf course is on the way. I don't see any impact, any effect on our business. We are doing business as usual."

The senior executive was also upbeat in his outlook for the company. "Last year, our sales are going to be up by a few percentage. It's going to be announced soon."

The Damac chief has, on earlier instances, highlighted investment opportunities in the UK owing to a softening property market. He added: "We're looking to expand. Our cashflow is very strong and our balance sheet is not fully leveraged. We're looking at Europe and North America. I think the UK, especially London, provides a major opportunity, especially with the softening of the property market after Brexit, and the pound is more reasonably priced, compared to the dollar two years ago."

- deepthi@khaleejtimes.com

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