Dubai-based property developer Damac plans to buy London office space for the first time in a bet the struggling market will bounce back.
The luxury group, known for developing Donald Trump’s golf course in Dubai, aims to snap up the offices at bargain prices and turn them into plush places to work that meet ESG standards.
“London is still a cosmopolitan city,” Damac chair Hussain Sajwani told the Financial Times. “Demand is there if you find the right asset, the right price, fix it, change the tenant mix, make it more friendly environmentally and push it to a higher end.”
Sajwani did not disclose how much he was planning to spend overall, but said he would look at property on a case-by-case basis with the intention of paying £100mn or £500mn per office, depending on location.
The company will target prime areas, including Mayfair, Victoria and Canary Wharf and favours locations where planning permits are easier to secure.
It will be the first time the group, which also owns Italian luxury fashion house Roberto Cavalli, has bought office space in Europe.
It chose London because of the bargain prices in a sluggish market with vacancy rates rising due to a combination of hybrid working and higher debt costs undermining demand and depressing prices.
Central London office investment volumes were £1.4bn in the second quarter or 60 per cent below the long-term average — the weakest on record except for the second quarter of 2020 at the height of the Covid-19 pandemic, according to CoStar data.
Damac, founded in 1982 and known for its focus on luxury residences and hotels having developed more than 75 towers including the Paramount in Dubai, did not rule out repurposing some of the office space into flats.
It has already dipped its toes into the residential market in London, developing the luxury Damac Tower Nine Elms near Battersea, which was furbished by fashion house Versace and opened to residents last year.
Although demand has fallen for many London offices, analysts say it has held up for high-end, green buildings in top locations, which are in short supply.
Some owners are likely to be forced by lenders to dispose of their offices in the coming months as loans mature and they struggle to refinance their debt because of rising rates, analysts add.
“When it comes to the refinancing point, if there’s just no availability to refinance at the level they are looking for, it might not be your decision anymore,” said Jackie Bowie, head of Europe at Chatham Financial.
Sajwani said he hoped to take advantage of the “softened” market and an upcoming wave of refinancing in order to buy assets that owners can no longer afford to keep.
There was, however, still “a bit more time [to go] for sellers to accept the new reality”, he said, adding that many were not ready to dispose of their assets at market price yet.
“It takes time for people,” he said. “But as time goes by, some of them will find a solution and keep their assets and some of them will have to give up their assets.” He concluded: “For us from the Middle East, London is like a second home: the culture, the language, the rules, the regulation.”
Dubai property developer DAMAC to buy London office space for first time
Dubai-based property developer Damac plans to buy London office space for the first time in a bet the struggling market…
DAMAC International Submits An Application For Planning Approval, Incorporating Zaha Hadid Architects Stunning Design
DAMAC International, a luxury property developer renowned for setting ambitious standards in design and innovation around the globe, today announces it has…
Meet the top 25 developers in the Middle East in 2023
Real estate developers play a significant role in the Middle East, contributing to the region’s economic growth and urban development.…
The Urban Renaissance in Dubai Captures the Attention of the Participants
At each session, the World Government Summit attracts the attention of the world and witnesses a wide and varied international…
Hussain Sajwani Says Dubai Real Estate Entering Best Phase Yet
The real estate market in Dubai has begun to enter its most sustainable period of growth yet, according to property…
The Chairman of DAMAC Properties, Hussain Sajwani, spoke with Yousef Jamal El-Din and Manus Cranny on Bloomberg Daybreak Middle East where he spoke about the Dubai real estate market, DAMAC’s 40th anniversary highlights and business updates.
Chairman on Bloomberg Daybreak Middle East
The Chairman of DAMAC Properties, Hussain Sajwani, spoke with Yousef Jamal El-Din and Manus Cranny on Bloomberg Daybreak Middle East…
Chairman Speaks at the Milken Institute Middle East and Africa Summit
Chairman of DAMAC Properties, Hussain Sajwani, was one of the speakers of the panels: Real Estate Outlook: Painful Reset? during the…
DAMAC Founder and Chairman, Hussain Sajwani to speak on global real estate at WEF DAVOS 2023
Dubai, UAE, 16 January 2023: Heads of states and leaders from around the world is set to convene at the…
Dubai-based DAMAC Group Signs Contract With Mandarin Oriental to Manage Luxurious Resort in the Maldives
Source: Gulf News
Cannes France, Dubai UAE — 6 December 2022: Announced to coincide with the International Luxury Travel…