Source: Property Week
DAMAC boss Hussain Sajwani tells Guy Montague-Jones about his ambitions for growth in London and Europe
Hussain Sajwani is not shy of promoting his own brand. The chairman of Dubai- based DAMAC Properties posts regular updates on Twitter and his personal website proudly displays images of him alongside the likes of Bill Gates at the World Economic Forum in Davos and in the company of two of Donald Trump’s sons at his daughter’s wedding.
Sajwani’s connections with Trump – DAMAC has built villas and a golf course under the Trump brand – have earned him the nickname the ‘Donald of Dubai’. However, Sajwani has arguably been a more successful property developer than the US president, amassing a fortune estimated by Forbes at an eye-watering $4.1bn (£3.2bn).
Sajwani has not had everything his own way of late, though. DAMAC’s share price has fallen by about a third this year amid a slowdown in the Dubai property market and in London, where DAMAC is building a 50-storey residential tower in Nine Elms, the company is also up against a weak luxury housing market.
Sajwani appears relaxed about the challenges DAMAC is facing at home and abroad. Sitting in the firm’s plush offices overlooking Harrods, he gives an upbeat assessment of the company’s future prospects and insists that it is as ambitious as ever about London and other European cities.
The bulk of DAMAC’s revenues come from Dubai, where prices and rents have been falling. DAMAC’s profits have taken a knock as a result, falling by about a half in the first nine months of this year.
Sajwani says the downturn comes o the back of five good years and he is con dent that the market will pick up again, albeit not straightaway. “The past 12 months have been slow and we expect that to continue for another 18 months to two years. Towards the end of 2020, things should start getting better,” he says. “There’s oversupply but in a couple of years we’ll have balance.”
He is also grappling with a weak market in London. DAMAC is part way through the construction of AYKON London One, which was recently renamed DAMAC Tower Nine Elms in a bid to build the DAMAC brand. It is DAMAC’s first project outside the Middle East.
The company is known for teaming up with luxury lifestyle brands and it has replicated the model in London, where there is little precedent for this sort of tie-up. Its 360-unit scheme is being developed in partnership with Versace, which has designed the interiors. At the show at in DAMAC’s offices, the Versace brand is emblazoned on everything from the bed to the cutlery – even the tiles in the bathroom are branded. It may not be to everyone’s taste, but Sajwani says the flats have attracted buyers from the Middle East, Asia and even the UK.
Two years ahead of completion, the scheme is more than 50% pre-sold, he adds, although this is the same guidance he gave in an interview in January.
He freely admits that the EU referendum had an impact on sales. “In the beginning, it was a bit faster but since the Brexit vote it has slowed down, but we’re OK with that. We continue to sell,” he says, adding that the company has made most of its sales using its global in-house sales force rather than through agents.
Just as Sajwani is upbeat about Dubai’s long-term prospects, he is also con dent that the fortunes of the
London market will turn. “I
think in the coming couple of years there are challenges but ultimately it will pick up,” he says.
Sajwani has long made it clear that DAMAC has not come to London just to do one development. He has also been quoted describing the Brexit vote as a buying opportunity.
However, as yet, the firm has not made any further acquisitions. Sajwani insists that this does not mean it is going cold on the UK. “We have come to London as a strategy to be here for the long term and we want to do multiple projects. Brexit does not disturb us,” he says. “We are looking quite aggressively for new projects.”
Sajwani does not intend to turn DAMAC’s focus away from luxury London residential even though the top end of the market remains weak. DAMAC is focusing its search for sites in zone one, he says.
DAMAC is also searching for opportunities to develop luxury residential schemes as well as hotels in continental Europe. “We have done development in a number of Middle Eastern cities and now we’re looking more at European cities,” he says. “We’ve started in London, we’re looking at Spain and we’re looking at Germany.”
DAMAC is even on the hunt for projects in Istanbul despite the downturn in the luxury market there and the economic problems facing Turkey. Sajwani sees an opportunity to buy into the dip and take advantage of the crash in the value of the Lira. “You go when the market is bad – when the market is good, it’s very expensive,” he says.
DAMAC’s international expansion plan is driven by a desire to diversify and ensure that the company is not too exposed to the ups and downs of the Dubai property market. According to DAMAC’s latest annual report, the company derives about 85% of its revenues from Dubai. Sajwani says that in four or five years’ time, he wants the split between Dubai and international markets to be more like 50:50.
He hopes to achieve this by accelerating the growth of DAMAC’s overseas business rather than by scaling back its activity in Dubai, where the company is part way through a number of large projects. One of the biggest is DAMAC Hills.
The scheme’s masterplan includes more than 3,000 villas, 4,300 apartments and about 4,500 hotel rooms, serviced apartments and hotel villas. The resort also features the Trump International Golf Club Dubai and a gated Trump-branded estate, where villa owners get a ‘Trump Card’ giving them access to other Trump resorts and hotels around the world.
Asked whether Trump’s election as US president and his subsequent actions have helped or hindered sales at DAMAC’s Trump Estate, Sajwani ducks the question, saying instead that “our experience with The Trump Organization has been great; they give us a very good service”. When pressed, he says that “we have seen a very positive response” and that its customers “are looking at the quality and standard of the villas and golf course”.
After partnering with Versace for its first London scheme, could Sajwani team up with The Trump Organization on its next project in London or Europe? Sajwani declines to comment but it is unlikely, not least because Trump said last year that he had turned down a $2bn deal with DAMAC after his election to avoid “a con ict situation”. On future European projects, DAMAC will no doubt join forces with some of its other partners such as Fendi Casa, Bugatti, Just Cavalli or Versace.
But first Sajwani has to put his money where his mouth is and acquire new sites.