Damac to finance projects with internal resources

The entire funding requirements for all of Damac Group's real estate developments in Dubai are being met from internal resources, according to its chairman, Hussain Sajwani.

"At no stage have we asked for external funding from financial institutions or from private investors - as things stand now, we do not see the need to. We are quite solid on our own," said Sajwani, thus dismissing a recent media report that some investors in his group's realty projects wanted to pull out.

"When we have our own funding, where is the need to go in for outside resources? As such, our property-related investments carry zero debt."

Damac is currently developing six residential towers in Dubai, which will involve investments of around Dh1.5 billion. Two of these are in Dubai Marina from the Emaar Properties' stable, two in Jumeirah Lakes, and two on The Palm islands.

"Except for the two on The Palm, on which we will start ground work as soon as the infrastructure for the islands is completed, the other three projects are moving on track. So far, this has been received by an overwhelming response from investors, with 1,400 apartments being snapped up in 18 months," said Sajwani.

"We have a clear mandate to emerge as a market leader in property development in the region, and not just the UAE, in the longer term."

On the group's technology related investments in the US during the second half of the 1990s, the chairman said that as with other funds, Damac Technology Fund (DTF) was also caught by the downturn in the US tech market in 2000.

The technology fund which was launched in 1999 had brought in some very high networth individuals in the region.

"In the three years between 1997, when DTF was set up, and 1999, our gains from these technology investments were between 300 and 500 per cent of the original investments. Then, in 2000, the market suffered, but our losses were much less than the gains that were made by the fund earlier," said the chairman.

"The point that needs to be made here is that none of the investments drawn by our fund were switched to another jurisdiction at any time. Moreover, we have already issued three dividends to the investors based on the fund's performance in the last four years, and a fourth will be issued shortly.

"Our investors in the technology fund are high networth individuals and very sophisticated in what they want from their monies. They also realise fully well the sort of risks that go with investing in technology stocks."

On the recent media report describing some of the investors' concerns over the technology fund's performance, Sajwani said: "Damac is 21 years old. It is a major group in food services, investments, manufacturing, restaurants and property development in 15 countries around the world; it hurts me to see unfounded allegations getting published - this is not good for investors, the property industry, and Dubai."