What's in the package for Damac?

What's in the package for Damac?Image Credit: Damac Properties

As one of the long established developers in town, Damac Properties is behind many luxury projects in Dubai. In recent years, the company has also been busy adapting to changing market conditions. In a chat, Damac's Senior Vice-President Niall McLoughlin reveals the opportunities in today's real estate market.

- What is your take on the current state of the real estate market?

It's a more mature market today. Thanks to all the regulations developers have to adhere to, we are happy that the market has gone from the hundreds of developers in 2008 to a handful today. There was a 50 per cent price growth from 2012 to 2014, which is normal at the end of a recession, and we welcomed the price correction end of 2014.

Instead of double-digit growth, now we are looking at a sustainable 8-10 per cent — it's the natural behaviour of the real estate market.

The demand is there but it's not a case of sitting in your office and waiting for people to come and buy. You have to go out there and work for your sale.

- You have a lot of units under development – around 40,000 – to come online by 2021. How are you making sure you're not flooding the market?

We have 36,000 units in the UAE and the rest abroad. We release the number of units in the market after gauging market interest across different purchasing countries, and bring the products they are asking for. That's the secret why we've performed well over the last years. Around 90 per cent of our customers are not from the UAE. That's why market reports, releasing supply figures, can be so damaging to the market, as buyers outside the UAE don't understand what is going on. Reports need to be more in context.

- Who are buying from you these days and what are they demanding?

There is still a small amount of speculation like in any real estate market. We're now seeing a lot more end users in the market. We're continually bringing to market the product that our sales people say is what customers want – [whether] it's the number of rooms, or bigger or smaller bathrooms, etc.

- Your inventory is very varied, from residential to hotel serviced apartments and villas covering different parts of Dubai. What are buyers mainly looking for these days?

The demand has changed, it has gone from a Dh2.5-million ticket for an apartment in Downtown Dubai to more villa lifestyles.

This could be because of a host of things: Dubai's evolutionary cycle, in terms of becoming a more developed market, and the type of people coming here.

While this trend started in 2013, the demand for apartments has not gone away.

We've seen a small trend of second-generation expatriate kids wanting to buy properties and start their lives here. We see a lot of them in the mid-entry level villa segment.

For the hotel rooms, our investors could be from anywhere in the world.

- Is there a preference for a certain product or area?

It's totally diverse. Dubai can't be painted with one brush anymore. Depending on whether it's a hospitality, villa or downtown product, certain demographics prefer certain products, from three bedroom [apartments] to a $10 million Bugatti villa. We try to bring every component to the market.

For example, the Russians never came back after 2012 as buyers, only as tourists. They actually never made up more than 1-2 per cent of our buyers. Of course, the rouble plays a role, but they also like beachfront products. So once our portfolio spread, moving away from the beach to different demographic pockets, they bought less. Having said that, they do come back to stay in our hospitality products.

- For other nationalities, have they been affected by the euro devaluation or the more difficult economy in China or low oil prices?

We have [customers from] 130 nationalities, [including] a big percentage of British customers. In terms of the euro, we still have a lot of interest from certain European countries.

You also have to take into account that the industrialized nations benefit from lower oil prices, so if it squeezes a Kuwaiti customer, we have Indian industrialists who are interested in properties. For various reasons demographics always change. When one closes another area opens, but you have to find it.

There still is a lot of interest from GCC countries, India, Pakistan, and Iran. We had 500 road shows in 98 cities last year in China, the Indian sub-continent and Europe, promoting Dubai as an end-user, holiday, second home and investment destination.

China has just started to discover this market. They came to Dubai as visitors for the last ten years, but today [some of the] 280,000 Chinese living in Dubai have started to buy. We tied up with two large brokers in China and they sell a unit every nine minutes. The country has 1.2 billion people, even if the economy there wasn't doing that well we only need a fraction of [the population].

- You have implemented several enticements to buy. When and why do you offer them to clients?

We are marketers and have to differentiate our product from competitors. With 40,000 units under development, we have to look at each product and think about how to package it with certain campaigns.

Every January during the Dubai Shopping Festival, we do a 30-day promotion and give away a car with every [property] purchase. It ranges from a BMW to a Lamborghini, depending on what you buy. It is very popular.

- Your capital guarantee campaign seems pretty risk-free.

We only offer it on selected inventory at Akoya. People will buy one of those villas we'll hand over by the end of next year, and we guarantee customers that from January 1, 2018 to December 31, 2019, at any period during those two years, they can come to us and we'll send three independent valuators to their house to establish the current market value at that time.

We take the average from that, and if the purchase price was less than that valuation we pay them the balance.

It shows we're confident of our product, master plan and the market.

We have good market intelligence and [we] believe it's sustainable and maturing. We're putting our money where our mouth is.

- Can you talk about the 3 per cent guaranteed annual return for those who make advance payments. Does it help you to ensure money will flow in faster?

[We're offering this] at the Paramount Residences. If customers buy a unit we guarantee them approximately double the fixed rate [or] 3 per cent during construction.

This is a lot more than a fixed bank deposit. Buy a unit, get your title deed and we'll give you 3 per cent during the construction period of that tower.

- You also offer plots in Akoya Oxygen?

We've had no one [buying plots] so far, as they would have to build it under the guidelines of the community. Why would they go through the trouble of project managing? It's just the way the contract is broken down.

- You released a while ago your plans for the rainforest at Oxygen. Can you provide more details how you will create it?

It's still too early to reveal details for the 65,000-sq-ft rainforest.

It will be under a dome as part of the Vista Lux retail and entertainment, which is anchored by the rain forest, a bit like how Mall of the Emirates integrated a ski slope. We're in discussions with operators to bring it online around 2020.

- You recently supported the Dubai Real Estate Institutes' Urban Thinkers debate? Did you learn anything you're planning to apply to your developments?

We support the Dubai Land Department's initiative of pushing best practices and positioning Dubai in a global platform from a thinkers' perspective.

It keeps you at the forefront of what's going on. The main objective was to bring the 30 international experts, who attended this conference, to Akoya.

It was a great opportunity to start relationships with them, discuss collaborations and apply new ideas to our developments.

- Has the recent Trump fiasco had an effect on your sales at Akoya?

The Trump Organisation is the operator of two of our golf courses. They run 17 successful golf courses around the world.

We don't comment on [Donald Trump's] political agenda. It is business as usual in terms of selling our villas.

Dare to step into the sky

Aykon City, Damac's latest major launch, is a 4-million-sq-ft development along the Dubai Canal. Set to be completed by 2021, the development includes Aykon Hotel, the first all-suites hotel of this brand in Dubai.

With the 78-floor hotel offering a bird's-eye view of the city, Damac will open the Aykon Dare as one of the attractions on the tower, where visitors can walk on a glass floored along the top edge of the

''We wanted to bring something different to Dubai. We're in discussion and doing our own due diligence on operating these kinds of attractions,'' says Niall McLoughlin, Senior Vice-President, Damac Properties.

Aykon means nest in Arabic, but it also hints at the ''iconic'' nature of the project. ''You have the icon and do have a bird's nest view as well, the inspiration of our brand,'' McLoughlin says.

Aykon City will house six towers, although Damac only revealed details of four: a hotel, an office tower, a Damac Maison serviced residence and a residential building.

The office tower, to be retained by the developer for leasing, will have larger and smaller floor plates. ''We'll get some key tenants and then boutique offices for this kind of area,'' he says.

The developer has released some of the 950 fully furnished hotel rooms in its Damac Maison for sale.

''The product is in the market for Dh700,000, promising a 10 per cent yield easily in this central location,'' says McLoughlin.

Sis you know that Dubai developer deploys the power of the guaranteed returns

Source: Nicole Walter, Special to Property WeeklyPW


For Rent


View more properties

For Sale


View more properties