Whenever he sees tempting opportunities to expand his blossoming real estate development business, Rizwan Sajan remembers a memo he wrote to himself: don’t get carried away. Following his own advice could prove difficult when his projects are selling so fast.
“I could have launched Glamz 2 and 3 as well and probably made double the money now, as am sure it will sell out before Ramadan, but I don’t want to get carried away,” says Sajan, founder and chairman of the Danube Group, hinting of a follow-up to the Glamz
residential project launched in May.
The company has not
announced a new Glamz building, but it launched a new project last month, Miraclz, which marked Danube’s first foray into high-rise development. “This is our tallest building and the model has also come out very well,” he tells PW. “It’s looking beautiful and I think it’s going to be a signature building in that area.”
Miraclz, built at a cost of Dh400 million, is located in Arjan, close to Miracle Garden, a popular tourist attraction. Rising 36 floors, it will have 591 apartments — 395 studios, 132 one-bedroom apartments and 64 two-bedroom apartments. It will also offer retail shops.
Although calculated in his approach, Sajan is optimistic with his projects, which he justifies by highlighting return on investments of 10.5-11.5 per cent.
“Around 80-85 per cent of buyers are end users,” says Sajan. “Our motto is to convert tenants with a long-term plan into buyers. You’re paying almost 10 per cent of the property value as a tenant, instead you could have your own within 10 years. Rents will go up, because of the supply and demand situation.”
He adds: “No matter how well we’re selling, I want to go very slowly, not be greedy and find myself in a situation where I launch multiple projects and could get stuck having to leverage with the banks. I’d rather be happy making a small profit one step at a time. I don’t launch projects of billions of dirhams at a time but small projects of Dh300 million-Dh500 million, because if
the project is not sold, I should be capable enough to deliver it.”
All of Danube’s real estate projects come with an attractive payment plan of 10 per cent down payment, 15 per cent after 60 days and the remaining payable at
1 per cent per month over four years.
According to Atif Rahman, general manager of Danube Properties, the group’s real estate development arm, payments to the developer stop at 32 per cent if construction doesn’t progress as planned. “This encourages us to finish the project as soon as we can,” says Rahman.
Any shortfall in funding, in particular after handover, would be sourced from banks, says Sajan. “We have negotiated with a couple of banks,” he says.
“Of course if you don’t sell enough it’s a concern, but when you do it’s fine. We don’t have many defaulting [buyers] in our experience, maybe 1 or 2 per cent.”
Danube now counts seven projects under its portfolio: Dreamz, Glitz 1, Glitz 2, Glitz 3, Starz Tower, Glamz and Miraclz. Dreamz, a town house development, starts delivery this month.
“Hopefully by February we should be able to deliver the whole project,” says Sajan. “The town houses have come out exceptionally well. We have Jacuzzis in the bathroom, we have a full garden that is already landscaped with fountains and all that. No town house uses marble, but we used marble in the living room. We try to upgrade the facilities as much as possible.”
The rest of Danube’s projects are apartment buildings. Starz was formerly named Ritz, but Danube decided to rename the project because of naming rights concerns. “We had a name issue because of the hotel group Ritz Carlton. We had permission [to use] Ritz by Danube from the Dubai Land department, but we didn’t want to get into legal issues, so we decided to rename it Starz,” Sajan says.
In any case, it wasn’t the name that sold the building quickly but its concept. Starz apartments offered living rooms that could be converted into bedrooms through a pullout bed. The success of the concept prompted the developer to adopt it in its succeeding projects, according to Rahman.
“We’ve also added another powder room in the one-bedders due to customer suggestions,” says Rahman.
Projects in the pipeline
Sajan says he plans another affordable town home project, that would include two- and three-bedroom units. “It could be anywhere but in an already developed area. Off the top of my head right now, a two-bedder should not be more than Dh1.2 million and a three-bedder not more than Dh1.5 million,” says Sajan.
— Additional reporting by Jobannie Tabada, Features Editor