Damac in talks for investment in Egyptian venture

Damac in talks for investment in Egyptian venture

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Abu Dhabi: Damac Holding, the Dubai-based real estate developer, is planning a major investment in the Egyptian real estate market, a top company official said.

“We have been negotiating the issue with the Egyptian side for almost six months now, and the site will be finalised soon,” Hussain Sajwani, the group’s chairman, told Gulf News yesterday.

The value of Damac’s international expansion and projects has been on the rise recently, reaching almost Dh25 billion so far, including a Dh10 billion in China, and a $400 million in Qatar, in addition to Lebanon and Jordan.

“We also find the Abu Dhabi market very promising, given the huge projects that have been announced or are in the pipeline,” Sajwani explained.

“However, Abu Dhabi needs to open up to foreign investors in the real estate sector, as the government cannot carry out all the required development,” he added.

Rents in Abu Dhabi are expected to increase by 100 per cent in the next five years, as the city’s demography is expected to change dramatically, due to the need to upgrade existing properties.

Accordingly, a different tenant mix is expected to enter the market, with much higher income than that of the average middle class in the capital today, according to Sajwani.

He said rents in Dubai and Abu Dhabi would keep going up, but at a slower pace than hitherto as the market is maturing. “However, Dubai is still relatively cheap compared to similar places elsewhere in the world and prices will keep going up about 40 per cent in the next five years,” Sajwani said.

Abu Dhabi rents would also rise because the real estate sector had been neglected for a very long time and would be pushed higher by the wealth of the emirate and new developments in the sector.

Sajwani attributed the rising rents to rising investment costs as well as strong demand. Building materials, administration costs and land prices were all rising, he said.

“Foreign competition has been good to Dubai’s local developers, as it opened up more markets and introduced the emirate to the outside world. Abu Dhabi needs a similar kind of foreign exposure and its market need to mature as well,” he said.

With its project Ocean Scape in Abu Dhabi, Damac is the only Dubai-based developer carrying out projects in the capital city, and the company is planning to further expand in that promising market with a new sales office there to cater for its ambitious plans.

Source: gulfnews.com

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