Hussain Sajwani, the founder and chairman of DAMAC properties, shared his insights on the upcoming challenges for the world economy at the latest edition of the World Economic Forum in Davos. Sajwani noted that the last decade had been exceptional in terms of growth on all markets, with another property boom overshadowing the previous one from 2010. Sajwani predicts a slowdown, and was careful not to stress on the worse case of a deeper recession.
But he believes those are natural business cycles, and a slowdown is usually temporary, to be followed by a new bout of growth. Sajwani believes the coming years would be the test of a good manager, and analysts should not overworry. Controlling overheads and cash flows would help companies outlast the temporary crisis, he said.
For DAMAC Properties in particular, the past five years were beautifully successful, shared Sajwani. But 2018 presented some challenges, and DAMAC predicts more difficulties coming in 2019 and 2020. “I think we are at the bottom, from a price point of view, but it will take at least two years to absorb the supply,” Sajwani said.
Sajwani remains confident in the economy of Dubai, as well as the country’s leadership, which is forward-looking and liberal toward business development. While he believes the past economic cycle may have led to overbuilding, there are also expectations that supply and demand will match eventually. For this reason, Sajwani sees the task of DAMAC properties as streamlining its expenses, while expanding to markets outside Dubai. In the past years, DAMAC has been viewing big European cities, while also expanding its offerings of high rises and villas in the Gulf countries. DAMAC Properties has completed 24,000 property units, with 40,000 more projects in various stages of completion.
Hussain Sajwani has seen multiple similar economic cycles since he launched into the world of business in 1982. He was also the pioneer in the Dubai construction boom, starting with a handful of hotel properties buit in the mid-1990s. DAMAC, which started its work in Dubai in 2002, caught a few booming years before the 2008 crisis. Renewed growth for the company arrived after 2012, when the luxury market became hot again, and Dubai opened its doors to foreign investors. Today, DAMAC Properties has completed prominent projects in key global cities like Dubai, Abu Dhabi, Doha, Amman, Beirut, Jeddah, Riyadh, Muscat and more recently, London.
Now, the next big target of DAMAC is to continue expanding in London, and the company is very agile when it comes to building a unique type of property. Sajwani said he considered either mixed property, luxury residentia properties, but office space as well. “We believe in London”, Sajwani said.
But DAMAC is also preparing to hop the ocean, as the firm is doing its homework and looking at the US property market as well. DAMAC is looking at the markets in Miami, New York, Boston, and Toronto in Canada, although there are no clear expectations when a deal may be reached.
Sajwani believes each city is different, and there is no way to tell which would be the global challenge to the property market in 2019. London will be facing the problems of Brexit, but Sajwani sees the Toronto market as continuing to go well. Sajwani sees the prices in the city as rather high, but matching the expansion and migration policy of the metropolis. “Germany’s doing well, I’ve been in Berlin, Frankfurt, and both cities-, and Munich, and all-, all German three major cities are doing well, and prices keep going up, and that’s the reason we could not strike a deal, because we see-, every time we say it’s expensive, it goes higher,” Sajwani added.
Questioned about the US-China trade wars, Sajwani stated he believes in free trade, but also in the right of each state to protect its interest. In the case of the USA, he believes president Donald Trump is on the right side, trying to take measures against the great trade imbalance that went on for years.
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