The Damac Tower at Nine Elms in London. The project, which features Versace Home interiors, is making headway on the project side. Damac has spoken about taking on more projects in London Image Credit: Supplied

Dubai: Damac Properties’ plans to seek a higher profile in overseas markets has gotten a boost, with the Dubai developer raising its stake in its overseas subsidiary to 45 per cent from 20 per cent. Damac International is building a super-luxury high-rise in London, and had spoken about the possibility of taking on more projects in the UK.

A board meeting held on Sunday gave the clearance for Damac Properties to raise its holding, which was widely expected by the markets. The stock, which fell 1.62 per cent to Dh1.21 Sunday, has been in quite volatile in recent weeks, with listed real estate companies seen as bellwethers for the wider economy.

In a new statement issued on Monday, Damc Properties said it already “indirectly” owns 75 per cent in the Nine Elms project. It is currently “working” on a resort in the Maldives.

The increase to 45 per cent “falls under the company business nature, and the value of the transaction is less than 5 per cent of the issued capital”.

Damac recorded losses of Dh1 billion for 2020, with the numbers showing the full impact of the pandemic on demand.

This is the second big consolidation action by Dubai based master-developers in recent days. Emaar Properties last week announced that it was bringing in Emaar Malls - also listed on DFM - fully into its fold. The aim was to help the parent company have access to higher recurring income, among other factors.

Slipping into red
On Monday (March 8), the main Dubai stock index ended in the red. After taking losses at the start of trading, the index recovered its losses and went into green territory. But it could not maintain those gains and closed at 2 540.39, down 0.2%, according to Michael Stark, Research Analyst at Exness.

The most active stocks Dubai Islamic Bank, with a value trade of Dh38.59 million; Emaar Properties with Dh36.56 million and Emirates Integrated Telecommunications Co. (Dh17.8 million).

Top losers were Emaar Properties (-1.93%), Dubai Financial Market (-1.87%) and Damac (-3.31%).
Top gainers – even though they didn’t succeed to keep the index in the green - were du (+2.94%), Emirates NBD (+2.32%) and Ithmaar (+3.02%).

Yet to reveal

Damac did not give any further clarification on how it intends to raise the stake in the international subsidiary. In all likelihood, it will be bought from other shareholders rather than through issuing new shares, market analysts say.

Top Damac officials have also spoken about getting into other overseas markets as well, which industry observers say could be a priority if the developer continues to hold back on new offplan launches in its home market Dubai. The Damac Chairman, Hussain Sajwani, had been one of the first voices in the industry to say that the offplan market needed time and space to cool down.

But it’s only in the last year that other “systemically important” developers also cut down their offplan launches.

Prominent address

Located in the rejuvenated Nine Elms suburb of London, the Damac Tower is a 50-storey luxury project, with entry prices from Dh4.3 million. Both on the project side and offplan sales, Damac has said it's been making headway.