It's a story of long-standing friendship maturing into business partnership. Cousins, Dr Khalid M. Alkhazraji and Engineer Khalifa Al Falasi, both UAE nationals, went to the US for further studies in the 1980s, where they met Mohammad Najeeb Elshorafa, a US citizen with roots in Palestine. The three roommates became steadfast friends and it wasn't surprising that soon they were making plans to set up a business once they'd graduated.
Things went according to plan: Alkhazraji and Al Falasi returned to Dubai, and Elshorafa — who was keen to live and work in the UAE — joined them later.
Their first business venture was a convenience store, which they set up in 1985. However, the friends had bigger plans. They considered all sorts of options, from trading to import and export, before eventually zeroing in on the real estate sector.
"We saw there was huge potential for Dubai's real estate sector," says Alkhazraji, adding, "When we first set up Dania Property Management & Consultancy, there were only a couple of other players in the market."
While Alkhazraji and Al Falasi became partners of the company, Elshorafa started out in the role of a general manager.
"Although we considered many fields to start up a business, we finally chose to enter the real estate market primarily because we saw an opportunity to provide good customer service and timely maintenance to tenants, who in those days were facing a lot of issues in terms of refund of deposits, maintenance, and so on," explains Alkhazraji.
The group has evolved and expanded over the years and now covers property development, freehold sales, retail and manufacturing. Currently focused on Dubai, the company would not hesitate to expand into other emirates if it perceived good opportunities, says Al Falasi.
Early days
While Dubai's real estate market held huge potential when the friends first started up their company, it was still quite an undeveloped and primitive playing field, says Alkhazraji. "The market was in need of some sort of professionalism, and that's where we stepped in."
They set up an in-house maintenance team in order to be able to respond to tenants' complaints and queries immediately.
Rather than working on a commission basis, the founders of Dania decided to take buildings on long leases and then sublet them to tenants, a business model that propelled the company's growth in the years to follow. "It is a risky business model, but you get higher returns," says Al Falasi, adding that this practice is not followed in more mature markets, such as the US.
Although the market was going through a period of expansion, the Dania team had to deal with some rough weather early on, especially because very few people knew of them in the market. "When we started the business, the whole industry was operated by foreigners. There were people who did not cooperate with us. That was the challenge," says Alkhazraji, "But the market was growing so there were still a lot of opportunities."
Boom time
The company at first focused on the leasing market in areas such as Rigga, Bur Dubai and Karama. But everything changed with the implementation of freehold laws in 2002. Allowing expats to own property in Dubai for the first time, this new legislation transformed the emirate's real estate landscape and attracted investors from across the globe. Dania also decided to get involved, although it was cautious with its approach: "We bought and sold many properties initially as it was a lucrative proposition. However, we did not set up the dedicated freehold division in our company until much later," says Alkhazraji.
Hand in hand with Dubai's increased attractiveness as a global investment destination came a rise in property prices and rents, which in many cases were pushed up to astronomical levels.
Alkhazraji remembers the real estate frenzy of this boom period well: "Since the freehold market was new, nobody knew what exactly was going on," he says. "Everyone was buying properties and selling them the next day and making lots of money."
Foreseeing the crisis
The Dania team says they predicted the global financial crisis long before it actually happened. With rents and prices spiralling out of control, it became apparent to them that the period couldn't last long. Alkhazraji compares the situation to that of the stock market when it was launched in Dubai:
"The share price of Emaar Properties at one point in time reached astronomical levels, but just before the global downturn, it crashed and then everybody became more cautious," he says. "In the real estate market, more or less the same thing happened. People are now more careful and realistic than ever before."
Dania's strong foundations helped it to resist the effects of the downturn, says Al Falasi. "We all felt that it would come down because we had been through this cycle before. So when it actually hit the market, we were not surprised, although like everyone else, we were also affected by it."
Elshorafa says they managed to handle the situation in a professional way. "That's why we are still hanging on. The harsh effect of the crisis is over. You have to put profit and loss in front of you. You can't start a business expecting that you will keep making money all the time," he says.
However, the freehold property market was more of an unknown entity for team Dania. "In the freehold area, when the crisis struck, it took us by surprise to a certain extent because none of us had been through that cycle before. It was new for everybody," says Alkhazraji.
"The US and the UK went through the same boom even though they are mature markets," he continues. "In those countries also, the prices went up and all of a sudden came down. Sometimes, the market gets greedy. When you are greedy, you don't see anything and you just want to make money."
Today. team Dania believes that the future is extremely bright for the residential sector in Dubai as the rents and sales prices have reached a stage of stability. "Maybe we will have a boom again but it will be more rational than before," Alkhazraji concludes.
Team Dania Growth
Set up in Dubai in 1989, Dania Property Management & Consultancy is headed by Dr Khalid M. Alkhazraji, Engineer Khalifa Al Falasi and Mohammad Najeeb Elshorafa. The firm was founded with five members of staff and today has over 45 employees and is one of the leading players in the Dubai real estate sector.
Khalid Alkhazraji
- Designation: Chairman, Dania Property Management & Consultancy
- Nationality: UAE
- Education: PhD in business administration from the United States of America.
- Founded Dania in: 1989
Khalifa Al Falasi
- Designation: Vice chairman, Dania Property Management & Consultancy
- Nationality: UAE
- Education: Industrial engineering graduate from the United States of America.
- Founded Dania in: 1989
Mohammad Najeeb Elshorafa
- Designation: Director, Dania Property Management & Consultancy
- Nationality: USA
- Education: Bachelor's degree in business administration from the United States of America.
- Joined Dania in: 1989
