Damac Properties, one of Dubai’s largest private freehold developers, swears by country-specific expansion strategies. So, while the luxury developer’s pipeline is confronted by bureaucratic red tape in Egypt, it is simultaneously going ahead full steam with its inventory in regional markets such as the UAE, Qatar, Lebanon and Saudi Arabia.
The developer has adopted a two-pronged development strategy: first, build projects after identifying a market niche, secondly, build and deliver what’s been already committed. “In the UAE, we are focused on the construction and delivery of projects that we are already committed to, and are not launching new projects here in the near term,” says Niall McLoughlin, senior vice-president, Damac Properties.
Meanwhile, identifying the affinity for designer labels among the residents of Lebanon and Saudi Arabia, the developer has joined forces with Versace Home Interiors for the Damac Tower and Damac Residences.
Being the first Versace-branded apartments in the Middle East, units in the Damac Tower in Beirut are priced from Dh2.5 million upwards. In Jeddah, only apartments on the top ten floors of Damac Residences are Versace-branded. In the UAE, Damac Properties is the proprietor of the ‘Versace Home’ shop in the Dubai Mall. “Anyone interested in Versace Home furniture can visit the boutique in the Dubai Mall for inspiration. We have also created a Versace show apartment at our new sales office in Ocean Heights, Dubai Marina,” Niall adds.
Adding another vertical to its portfolio, Damac recently launched Damac Suites & Spa, thereby making its foray into the hospitality segment. Conceptualised as a luxury apartment management provider, the Damac Suites & Spa will offer services not only to residents in Burjside Boulevard — Damac’s first serviced apartment offering in Downtown Dubai — but also to buyers in its other premium residential projects. “Our customers wanted more than the standard housekeeping. In response to this, we developed the concept of personalised luxury. Through Damac Suites & Spa, you can ask for a private chef or butler, baby sitting and spa treatments in the confines of your apartment, get your car serviced, charter a plane or yacht, and so on” explains Niall.
Damac has delivered several projects to date — some of these include The Waves and Marina Terrace at the Dubai Marina, Lake View and Lake Terrace at Jumeirah Lake Towers, and Business Tower and XL Tower at Business Bay, to name a few. This year, the developer completed and handed over the 84-storey premium twisted residential tower, Ocean Heights in Dubai Marina and Lago Vista, a three-tower residential development in International Media Production Zone.
“Before the end of this year, Damac will finish handing over eight buildings comprising 1,329 units. These are three buildings at Emirates Gardens 2 and three at Tuscan Residences — both residential developments in Jumeirah Village — and the twin Park Towers at Dubai International Financial Centre,” Niall says.
However, with project delays becoming inevitable in the wake of the global financial crisis, Damac Properties has had to contend with refund requests from investors.
“Yes, there have been delays. But, that is just the nature of the development business. A host of factors contribute towards delays. Terms and conditions in our sales contracts explain where compensation is due when we are late. Often, it is circumstances beyond our control that delay a project,” Niall says.
Suburbia, another Damac project, is taking shape in Downtown Jebel Ali. A mid-rise, multi-building freehold development, it will offer one-, two- and three-bedroom apartments as well as townhouses.
“We are developing Suburbia in anticipation of increased demand for housing within Dubai’s logistics corridor over the next few years,” Niall says.
Damac also has a significant footprint in Business Bay. “We are continuing to build so that we are in a strong position to take full advantage of the expected upturn in the property market in the mid to longer term. The first of the projects, currently under construction in Business Bay, is slated for completion in 2013,” he explains.
As part of its diversification strategy, Damac has also ventured into the Abu Dhabi market, having launched two towers on Al Reem Island. “The construction of ‘Oceanscape’, which is a two-tower project, is up to levels 21 and podium 16 respectively. Marina Bay has been topped off at level 24. We anticipate that they will be handed over before the end of next year,” says the Damac executive.
Fate of developments in Egypt
Meanwhile, Niall says the situation in Egypt has been tough to deal with: “Egypt has been a challenging market for us since the events of the Arab Spring, but we’re confident the market will perform strongly in the longer term. Construction is progressing well on Park Avenue, a retail and commercial development in Shaikh Zayed City on Cairo-Alexandria Road, with about three-quarters of phase 1 completed by the main contractor. Damac is a minority shareholder with the Housing Development Bank in other projects there.”
“Damac Properties has submitted Jointly Owned Property Declarations to the Real Estate Regulatory Agency (Rera) for our completed projects. We are now in the final stages of establishing owners’ associations for our completed projects. These new laws have taken time to work through. One of the challenges is facilitating the establishment of functioning OAs. This is a new concept for Dubai, but one that will add greater confidence to the market.”