Anyone who has visited Dubai is likely to recognise the name Damac, embossed as it is onto dozens of the city’s high-rise buildings.
One of Dubai’s leading property developers, Damac is at the forefront of the Middle East’s luxury real estate market, boasting a development portfolio of 25,000 homes. Now, the company’s forthcoming Damac Tower is catering to London residents who want panoramic views over the capital from the jacuzzi in their Versace-designed apartment.
Damac, founded by Emirati billionaire Hussain Sajwani, is also the United Arab Emirates’ fourth biggest investor in foreign real estate, with 16 projects since 2005 totalling $11.5bn, according to greenfield investment monitor fDi Markets. As the company branches out of emerging markets, London has become a target.
Early in 2019, the number of homes sold in London fell to the lowest level in a decade. Indeed, the value of central London’s prime properties has tumbled by more than 19% since 2014, according to real estate service provider Savills.
Brexit is a key factor behind this slump and, for foreign investors, it has been a boon.
Adil Taqi, chief financial officer at Damac, says: “The fundamentals of London’s attractiveness remain, [regardless of its place in the EU]. It is a capital city, it has demand and connectivity. From a foreign investor’s perspective, [Brexit is an opportunity]. Developers are more keen to sell than ever before, leading to more availability, and the pound is cheaper than it has been in recent memory... I don’t think we've had so many things going right [all at the same time].
“If you ask me about the next two years, I don’t know. But if you ask me about the next 10 years, London’s a safe bet. Emotional rollercoasters come and go. I know people who have never found London more affordable.”
This is why Damac has invested in the £577m ($722m), 50-storey Damac Tower in Nine Elms, London, which is scheduled for completion in 2020. Some 55% of the tower’s apartments have already been sold.
Vote of confidence
Damac Tower is being financed by two Middle Eastern banks – Burgan Bank and Emirates NBD Bank – alongside a £175m package from the UK’s Barclays. This highlights the belief that Middle Eastern capital has in London, according to Mr Taqi.
“The development of the Damac Tower is a major vote of confidence in the UK economy and reinforces our position as Europe’s top destination for foreign investment. It is also yet another sign of the international community’s confidence in the fundamental strength of the British economy at a time when global FDI is falling,” UK international trade secretary Liam Fox said in a press release.
Mohammed Al Mael, head of corporate banking at Burgan Bank, echoes this sentiment, saying Damac Towers affirms people’s confidence in the fundamental attractiveness of the UK as a whole.