Damac looks to expand its global reach
(DENNIS B MALLARI)
Hussain Sajwani is riding high on the real estate wave and is in no mood to relinquish his lead. His company, Damac Properties, has already launched projects worth Dh110 billion in more than 16 countries.
“Our entire investment in real estate development is $30bn [Dh110bn], the Gamsha Bay project in Egypt itself being worth $16.4bn [Dh60.22bn]. The rest is spread across the GCC and Levant, with the majority of projects being in Dubai,” says Sajwani.
Damac Properties, which is part of Damac Holdings, was established in 2003 and since the beginning it has aimed to make a niche in the luxury segment.
“Since inception, we have positioned ourselves and have targeted the luxury end of real estate development. We have been successful at that and as a further enhancement we launched the signature series that assure ultimate luxury,” he says.
But is there a demand for high-end luxury apartments? Sajwani thinks so: “If you read and see statistics of the number of growing millionaires, there is bound to be a growing market for these niche products.”
And he is bang on target – the niche market is certainly growing, as the 11th annual World Wealth Report released by Merrill Lynch and Capgemini points to an increase in the high net worth individual population and wealth growth in emerging markets compared to more developed nations.
According to the report, the number of high net worth individuals in the world increased 8.3 per cent in 2006 to 9.5 million from 8.8m in 2005, while the number of ultra high net worth individuals rose 11.3 per cent to 94,970. Meanwhile, the number of UAE millionaires soared by 15.4 per cent to 68,100 in 2006 from 59,000 in 2005.
For Sajwani, luxury does not mean buying or selling high-priced apartments. It is more than that and involves a loop of services.
“Luxury is not one item, nor one thing – it is a whole experience. It is the service that we offer from the minute you enter our office till the time the apartments are delivered. The facilities management and other maintenance services thereafter – that’s what we call luxury,” Sajwani says.
Prompt and timely delivery of the project is of foremost importance for the Damac chairman. He rules out any delay in projects and is confident of meeting deadlines.
“Today, it’s market of contractors. It is very challenging to deal with them, especially quality ones, as there is a huge demand for them. But being a large company, a lot of them [contractors] want to work for us as they are assured of being paid on time and grow with us over time,” Sajwani says.
The company is yet to decide on whether to buy a contracting company. But it has a project management team in place that supervises construction quality.
“If the right opportunity comes, we will look into it because of the shortage of contracting companies. We will look to buy a big company that is international or regional since our business is growing and our presence is in many countries,” he adds.
Damac is incorporating smart home technology in its signature projects and not ‘regular’ apartments. “We have sufficient and reasonable technology in our normal apartments and have cutting-edge technology in our signature series,” he says.
The reason he gives is the high maintenance cost, which makes it impractical to make normal apartments more high-tech.
According to Sajwani, the company is looking to expand its geographical reach in 2008 with plans to launch projects worth $5bn (Dh18.35bn) in India alone in the next three years, along with several projects in Pakistan and North Africa. “We are already pursuing a project in Istanbul. As for 2008 and beyond, we have aggressive plans and will obviously continue to look for opportunities in the Middle East, Asia and North Africa.”
Damac Properties is also not ruling out more master developments after it launched Gamsha Bay in May 2007. “We are always studying and exploring a variety of projects. Obviously, if there is a project that is a good fit, then we will pursue it,” he says.
Sajwani believes in the UAE real estate story. “Dubai will continue to grow. The big growth is still ahead as the emirate has built itself as a hub for companies and tourism for people from at least India to Europe. Even Abu Dhabi is a good market and has huge growth potential.”
Asked if it was becoming difficult to get talented people, Sajwani says his company has put in place a number of strategies and incentives to retain employees.
“With extreme growth in the industry, it is a challenge to recruit quality human resource. We are overcoming this challenge in a variety of ways. We have evolved strategies to recruit and retain the very best talent through our recruitment process. We have a full-fledged training department and offer competitive remunerations. We make sure that we attract the right people and that they continue to grow with us,” he says.
Sajwani, however, ruled out listing on the stock market. In August, the UAE changed its laws to allow families to retain up to 70 per cent of firms they put up for sale to the public. The earlier limit of 45 per cent had discouraged UAE families, some of whom have built multi-billion dollar businesses on the back of oil wealth, from selling shares.
“We are studying all possible growth strategies for all of our companies. However, there are no immediate plans to go public.”
When asked what Damac has contributed to the UAE, Sajwani says: “We have generated a lot of employment opportunities. We pay our share of the [indirect] taxes and have brought a lot of foreign investment into the country. Out of the 10,000 buyers that we have, more than 6,000 are from Europe.”
Sajwani endorses the fact that the right people in key positions and good time management has enabled him to run his company efficiently. “It is extremely important to have certain attributes such as an understanding of market opportunities, a quest for success, vision and, most importantly, hard work to become successful,” he emphasises.
A profile in entrepreneurship
In just two decades, Damac has grown from a catering company to a global conglomerate with operations in more than 18 countries. Today, the Damac Group ranks among the largest business groups in the UAE with interests in real estate, hospitality, industrial projects, investments, logistics and commercial trading.
Damac Properties, the real estate development arm of the group, is present in more than 16 countries. It is is expanding rapidly in North Africa, Jordan, Lebanon, Qatar and the Far East. With its headquarters in Dubai, Damac has regional offices in the United Kingdom, Russia, Lebanon, Jordan, Egypt, Saudi Arabia, Kuwait, Qatar, Oman, Pakistan and Iran besides Abu Dhabi.
The group has operations in numerous countries including
Saudi Arabia, Bahrain, Syria, Lebanon, Azerbaijan, Turkmenistan, Bosnia-Herzegovina and Algeria.
Sajwani also currently holds the position of chairman at Al Anwar Ceramic Tiles, Oman; Al Jazeira Services, Oman; Al Ahlia Insurance, Bahrain; and also Al Amana Building Materials, Oman.
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