Through the Keyhole

In which segments have you developed in Dubai since the company’s entrance into the market in 2002?

Since the company’s inception, the main focus has always been luxury real estate development. This was a natural business model for our home market of Dubai, developed largely for affluent customers. Yet our luxury offering doesn’t always mean hugely expensive, and DAMAC Properties develops luxury living experiences starting from US$100,000, which will provide a luxurious unit with all the benefits of a luxury address.

DAMAC Properties works with different luxury brands in its portfolio. Are you planning to acquire new brands to improve your offering?

When you are in the luxury business, there are always a certain number of clients keen on a limited edition. Our collaboration with globally iconic brands is our way of providing a limited series. We have launched the Trump Estates, which are exclusive villas and mansions with the design touches of Ivanka Trump, limited to only 104 units. It’s the same with high-rise apartments, such as our iconic towers in Dubai, where we offer a limited number of units on the marina, with interiors by Italian fashion house FENDI. That was our first collaboration with the Louis Vuitton group. We saw that, in real estate, the best way to launch a limited series was to collaborate with an iconic brand.

What are your strategies for geographical expansion?

We are mainly engaged in the Middle East market. Our hometown and the seat of our business will always be Dubai. We have additional projects in Abu Dhabi, Jeddah, Riyadh, Amman, and Doha, and any expansion in the Middle East will mainly be in those cities. We established a company in 2013 in Baghdad, and are probing the market as we know that it is ultimately destined to be one of the largest real estate markets in the Middle East.

DAMAC was planning to call some investors to Dubai from different countries. Why are you interested in doing this?

Dubai is one of the best areas for second homes, vacation homes, weekend homes, and recreation homes; places that you visit for business and relaxation. And many people who have set up business here take an apartment or house, because they visit this city four or five times per year. People from Saudi Arabia are often here on vacation for the weekend, as are many people from India. Dubai is an aspirational destination for so many neighboring cities, offering convenience and opulence, but also safety and security in stark contrast to many regional countries. In addition to this, in 2013 Dubai had 10 million tourists, with 69 million transit passengers arriving at the airport. The target is to convert some of the latter travellers into tourist arrivals. There are many conscious steps that the government is taking to make sure that Dubai remains competitive. If you have an apartment here, for instance, but don’t frequently use it, you can give it to a hotel company that will rent it for you on an overnight basis as part of its business, which in turn increases the current 80,000 hospitality units in the market. This is why we ventured very heavily into the luxury hotel apartments sector. We now have, in Dubai, over 8,000 hotel apartments under development. And the unique model that we started with hotel apartments is that you buy a hotel apartment from us, and on completion put that unit into the rental pool if you so choose and we will remove all the stress and manage the property on your behalf.

How important will the hospitality sector be in your future portfolio?

Hotel apartments today constitute approximately one-third of our portfolio. This is how much we believe that packaging hospitality with real estate is valid, especially in a city where tourism and services generate over 50% of national income.

Which other segment is DAMAC keen to open in?

The DAMAC Properties development portfolio is split into three main areas of luxury living. Firstly is our core business of luxury apartments, in the best locations throughout Dubai and the Middle East. We are also at the forefront of the hospitality boom in the region, with serviced hotel apartments and hotel projects. Finally, we are bringing to the market some of the most desirable villa communities anywhere in the Middle East. In each of these sectors we are working with globally iconic brands to deliver exciting and unique living experiences.

AKOYA by DAMAC is one of DAMAC’s flagship projects currently. What are your expectations for this specific project?

AKOYA by DAMAC is fast becoming one of the most desirable golf course communities anywhere, with a 4.3 million square foot private park, swimming pools, landscaped gardens, and a state-of-the-art gymnasium included in each of the developments. The 42 million square foot master development is just 10 minutes from Sheikh Zayed Road, set around the Trump International Golf Club, Dubai—the first Trump course to be operated and managed by the Trump Organization in the Middle East and Asia. The community was recently named as the “Best International Golf Development” in the world at the International Property Awards.

Regarding Expo 2020, DAMAC Properties has launched TENORA and Celestia in Dubai World Central. Can you talk more about your aspirations for these and other projects you plan for Dubai to boost the city for Expo 2020?

TENORA will be ready by 2015 and Celestia by 2016. These projects, set close to the Al Maktoum International Airport and the site of the World Expo 2020, will support those working on preparing for the event and for those moving to that end of Dubai in future years. TENORA and Celestia will assist people who want to work in those areas without a long drive, because the closest hotel is either in Jafza or in the Greens community.

What further opportunities exist in the area after Expo 2020 closes its doors?

We believe strongly in that part of the city regardless of Expo 2020, because it will be the site of Al Maktoum International Airport. And with Dubai being mainly an air and logistics hub, this will be the most important area of all. Expo 2020 is coming along well with that airport as a booster, but it’s not the main attraction. The main attraction is what will become the largest airport in the world, the greatest logistics hub in the world, and the fact that you have one of the biggest airports being developed close to one of the greatest sea ports, adjacent in turn to one of the most active free zones in the region, means all three together spell a phenomenal opportunity for Dubai.

What will Expo 2020 bring to the real estate and hospitality sector?

Expo 2020 is essentially a sentiment booster. We need to be ready for the six-month Expo from a logistics perspective but, once again, it is not a major booster for real estate on its own. The Department of Tourism and Commerce Marketing (DTCM) estimates that tourism growth alone necessitates a rise from today’s 85,000 room keys to around 145,000 keys by 2020, even without the Expo. The Expo itself will only require an additional 15,000 rooms, which is a modest rise.

© The Business Year – April 2014