Developer cites challenging conditions in Dubai property market as a reason for its expansion
Hussain Sajwani, chairman of Damac Properties, has said that the Dubai-based developer is scouting for additional plots of land in the Kingdom of Saudi Arabia, both in established cities and in emerging giga-projects like Neom.
According to a report by Arab News, Sajwani said that Damac is eying Saudi Arabia for potential expansion for its high-end residential projects, keeping in mind the slowing property market in Dubai. The developer already has one property in Jeddah and a twin-tower project in Riyadh.
“It is a big market. It is changing, it is opening up, so we see a potential there … We are looking,” he told Arab News.
“In the Middle East, Saudi Arabia is the biggest economy … They have some very ambitious projects, like the Neom city and other large projects. We’re watching those and studying them very carefully.”
Announced in 2017, Neom is a $500 billion economic zone on the Red Sea coast. The huge development will have residential, commercial and tourist facilities.
Although he acknowledged that doing business in Saudi Arabia was ‘a bit more difficult or complicated’ when compared to the UAE, Sajwani said that the country was opening up, citing recent moves such as allowing women to drive and reopening cinemas.
The move to expand Damac’s presence comes in the wake of a tough property market in the developer’s home market. In February, it reported that its 2018 profits fell by nearly 60%, with fourth-quarter profits dropping by 87%, according to Reuters calculations.
Sajwani told the newspaper that he does not see any immediate recovery in the emirate’s property market, or Damac’s financial results.
“(With) the market being soft, prices being under pressure, we are part of the market — we are not going to do better than last year,” he said.
“This year and next year are going to be difficult years. But it’s a great opportunity for the buyers.”
However, he asserted that Dubai was “very strong fundamentally,” highlighting factors like its advanced infrastructure, safety and security, and low taxes.
In 2018, Damac delivered over 4,100 units, and in 2019 it plans to hand over even more, despite challenging market conditions, Sajwani said.
“We’re expecting north of 7,000. This year will be another record.”