Damac's projects in Tunisia, India and Morocco on hold

Damac Properties has stalled its international development plans in India, Pakistan, Algeria, Morocco and Tunisia, its chairman said.

The developer will, however, continue its projects in Qatar, Jordan, UAE, Egypt and Iraq.

Speaking in a round-table to the media, Damac Chairman Hussein Sajwani said the developer had cancelled its residential project in Lebanon that was announced in 2005.

"We have stopped any international expansion for now. We will do few launches but our focus will be geared more towards the efficiency of the organisation. Money has been returned to investors in Lebanon," said Sajwani, adding: "The year 2009 will be a challenging year for us but we believe the realty market to pick up from end of 2009 and 2010."

In November 2007, Damac Properties had announced plans of investment to the tune of Dh18 billion in India across three years; however going by current market conditions the developer has deferred its plans to invest in the country.

Damac's borrowings for its projects have amounted to Dh420 million, however, the company had not undertaken any external funding for its on-going projects in Abu Dhabi, Bahrain, Saudi Arabia and Qatar.

"In International markets where our projects are under development, the land is fully paid up and I challenge anybody to come and tell us we have borrowings there," said Sajwani.

He, however, refuted charges of discontinuing or cancelling projects in Palm Springs plots in Palm Jebel Ali saying, "When the land is delivered to us we will begin construction."

Sajwani predicted that there would 20 per cent drop in property sales as a result the company would lay off 200 employees.

"We have to rationalise our costs and hence had to let go of around 200 of our staff. We don't need such a large-scale staff strength," said Sajwani.

According to Damac, the company has so far recorded a profit of around Dh500m for the first nine months of this year alone and projects profitability to touch around Dh700m by end of 2008.

According to Sajwani, Damac Properties has gathered around Dh700m so far into the trust account.

"Most of our customers who have bought into us do not have a mortgage in place. So they are not having any problem with any banking system. They have been outright buyers and have paid around 40 per cent, said the Damac chairman.