Damac chief urges halt in new property construction

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Aden - Yasmin Abdel Azim - Damac Properties Chairman Hussain Sajwani speaking on the second day of the SALT Leadership Conference in Abu Dhabi. Image Credit: Supplied

Abu Dhabi: Damac Properties Chairman Hussain Sajwani repeated his calls for a halt to all new property development projects to help alleviate oversupply in the property market and to stabilise prices.

Sajwani was speaking on the second day of the SALT Leadership Conference in Abu Dhabi, and said that a halt in new projects for a maximum 14 months would have an immediate and positive effect on the real estate market, bringing prices back up and restoring confidence within the market.

“That glut of supply we have or are going to have will have an impact on the market, as I said if we stop today we are okay, the demand is there; I think there is a demand for at least 15,000-25,000 units a year, but if we supply more than that, then we have a problem,” he said.

“I think we have oversupply in 2019 so we need to slow down [and] make it either zero or a very small number. I said 12 months [or] 14 months is the maximum [time we should halt for] … If we stopped demand for 7-8 months prices will stabilise [and give the] market more confidence and move forward,” he added.

Sajwani said that Damac remained in a strong position despite the company’s decline in revenues this year, which fell from Dh5.2 billion to Dh2.8 billion in the first nine months of the year.

“We are in a very strong position, we have more than Dh5 billion cash in the company, we have just paid more than a billion dirham debt of bonds last April; we can pay for our bond 18 months earlier [and] maybe two years earlier than its due date.

“We are going to probably touch more than 7,000 units delivered this year, we have another 8,000 next year and 8,000 the year after … and in 24 months a lof cash comes in because [of] those deliveries,” he added.

Commenting on his outlook for the market, Sajwani said he was positive for the UAE’s economy as the country had all of the right fundamentals in place. “You’re talking here about one of the most stable and strongest economies in the Middle East; on the global level we’re among the 10-20 countries [with the best economies].

“[We have] more than 100 years of oil under the ground, more than $1 trillion reserves of investments of Abu Dhabi overseas, a currency pegged to the dollar, very low taxes, freedom of money coming in and out … So we’re ticking all the boxes … There is no worry on the country’s fundamentals,” he added.

New cold war

Sajwani also gave his perspective on the trade dispute between the US and China, and said that he believed that relations between both countries was entering what he termed the new cold war.

“No matter who comes in the White House [next] the relationship between China and America is going to see a different way.

“After the second world war there were two powers — Russia and America — now there are two super powers [in] China and the USA and that relationship is going to go through what I call a new cold war,” he added.

“The new cold war is going to between China and the USA and all of us are going to get impacted by that … So we are going to get impacted by that, by how much I don’t know,” he said.

Sajwani also believed that US president Donald had a very good chance of getting reelected, based on Trump’s positive economic performance for the US. Sajwani is a major regional business partner of Trump, with several of Damac’s properties branded with Trump’s name. Two of Trump’s sons came to to open the Trump International Golf Club course at Damac Hills in 2017.

“In my opinion he’s done good for America, the style does not matter, he reduced taxes [and] the unemployment is at a record low … so he did something to get those results.

“He has challenges of course … My feeling is that he still has a big chance of winning because there is a large number of Americans who still support him because he economically did very well for them,” he added.

Competing with Gucci

Sajwani also spoke on his recent acquisition of Italian fashion brand Roberto Cavalli through his Vision Investments, saying he wanted to try a new challenge away from the real estate sector.

“It’s something very different, it’s in a highly competitive market, your competitor is LVMH [with its] owner the third-richest man in the world.

“I wanted to take this challenge, I wanted to see if I can succeed in Milan competing with Gucci, then [afterwards] I will have the confidence in myself that I am successful,” he added.

“I am never happy with my success, I will say where is the next [challenge], I can build another building so what? But, if I can compete with Gucci in their home then I’ll be a little bit more happy,” he added.

“Definitely the objective is to not just buy one brand and [to] continue because today the world is moving into scale … so you can’t survive by owning one brand,” he said, pointing out to further possible fashion brand acquisitions.

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