The secret to success
DAMAC managing director Ziad El Chaar
Since the American subprime market threw the world into turmoil three years ago, DAMAC properties has completed 30 buildings; 21 of which were delivered in 2011, totalling 4072 units. According to the developer it is more than its two biggest rivals combined.
Defying the fate of its competitors, the secret of DAMAC’s success hasn’t been to adopt the usual survival strategy of diversification, but to do more of what it does best; luxury. In fact as the world diversified, DAMAC did the opposite; not only developing its luxury credentials but building on them with the introduction of the new Suits and Spa hospitality brand.
“Since 2002 our specialty has always been luxury,” says managing director Ziad El Chaar.
“In 2002 we started with the slogan ‘luxury lifestyle providers’ then we evolved to ‘live the luxury’ and now we are going into hospitality with ‘luxury at your service’ and a very important element of luxury is the location,” he continues, adding that this incorporates key facilities and views and enhancing them with “unique, premium design” in everything from the residents’ lobby to entertainment areas.
“I don’t like to use the word crash, but since November 2008 we have completed 30 buildings and those are in various master plans of Dubai from iconic projects in Dubai Marina to the buildings in DIFC, Jumeirah Lake Towers and Jumeirah Village South,” El Chaad explains.
The projects delivered over the last year (see box) buck the trend for thrift usually associated with periods of low economic activity. The highlights of the handovers have included Ocean Heights in Dubai Marina and a triple tower development at IMPZ, Lago Vista, which has 1020 units. The statistics average out to the equivalent of constructing 15 units a week since the company was established less than a decade ago.
“When the market goes through some tough times and begins to correct again, as we have seen in Dubai, this is where you can clearly see the value of those markets because those projects are usually the first to start growing in terms of price and returns,” he continues.
It’s a line echoed throughout the company’s management, applying the old adage of what hasn’t killed the market will make it stronger.
According to the latest FPI investor sentiment survey, confidence in the market is at its highest level in 12 months and almost 60% of investors predict investment markets will improve as soon as the next six months.
“Definitely the economy is strengthening and the realistic market is coming back. In key locations quality buildings, and the percentages now are still shy but they are very important percentages, show we have moved from a downturn to stability and now growth has started,” El Chaar says.
Continuing the success seen to date, DAMAC’s plan for the coming twelve months is to seize on the positivity and continue the upward trend; the developer currently has 50 buildings at various stages of construction across the MENA region and the pace is unlikely to slow.
Asserting that the company is well capitalised and financially stable, DAMAC is notably proud of its payment model, built on stage-payments from clients during the construction process, thus ensuring structured cash flow throughout the project. It’s a model DAMAC uses for its properties in the UAE, Saudi Arabia and Lebanon.
Live the luxury
“Luxury is in the design, in the interiors, in the execution, and very importantly luxury is in facilities management. Imagine you are living in a luxurious building and the lifts keep breaking down, even though the building can be an expensive building and the elevator can be an expensive elevator, this is not luxury,” says El Chaar, adding that luxury and quality are mutually exclusive.
It is further to this ethic that DAMAC this year began collaborating with Versace on interior fit outs for Al Jawaharah Tower, on the Jeddah Corniche – a major project for DAMAC in Saudi Arabia and therefore a key focus for 2012 – and DAMAC Tower, Beirut, on which the main contractor will be announced soon.
In both developments the interiors have been designed and supplied by Versace Home.
“We will always try to bring to the market what the market wants, it’s everything down to the size of the apartment, the layout of the apartment, the design of the kitchen in the apartment and the accessibility. So we always envisage the clients and we are always flexible to change whatever changes they need,” El Chaar explains.
Complementing the association, and further meeting market demand from clients, DAMAC last month announced the launch of DAMAC Suites and Spa.
Designed to complete the luxury experience for residents of the still under construction Burjside Boulevard, locted in Downtown Dubai, the brand is a bespoke hospitality management company, established as an independently run subsidiary of DAMAC, that will provide a spectrum of personalised services from housekeeping to personal chefs and private yacht charters.
“You could buy a pent house in one of our projects that will be used as a holiday home, so you may visit twice a year. You cannot come for a holiday for 15 days and be worried about who will clean your apartment, drive your car or where will you do laundry services. So by hiring DAMAC suites and spa we can give you the whole package,” El Chaar details
Adding that in order to “live the luxury”, the choice of entrusting the task to a private subcontractor was declined in favour of personally overseeing each individual element of luxury living.
“We prefer to create another company to ensure the levels are five star and plus because if you’re living the luxury, if you have a luxury project, you expect luxury services.
“We have hired experts from the field and we are ready to manage the client expectations at the same level that we sold the project to them.
“At the same time we are going to extend the services of this hospitality company to the people who are buying in all other projects,” he says and also adds the service will be fine tuned ahead of Burjside’s 2013 completion, in a number of “select” projects.
The future
The focus for 2012 will be to continue the construction and delivery of current projects, including Burjside Boulevard and others in the UAE, Saudi Arabia, Lebanon and Qatar.
Completing 36 projects since the company was established in 2002 may be impressive, but the developer currently has another 50 under construction.
As DAMAC continues to defy global markets while redefining luxury, El Chaar asserts: “We operate in strong markets.”
“Real estate now will be a long term investment market. Even today as we move from the correction phase to stability, the returns in Dubai stand between five to six percent, to be conservative, and in the global economy today having a secure investment like this is tremendous,” El Chaar concludes.
