Tawasul
Mubasher TV
Contact Us Advertising   العربية

DAMAC vows to deliver projects on time – VP Interview

DAMAC vows to deliver projects on time – VP Interview
The company achieved revenues of AED 4.4 billion last year
Damac
DAMAC
0.00% 0.00 0.00

Mubasher: DAMAC Properties aims at delivering all projects on time and considers expanding abroad across many markets, according to the company’s Senior Vice President, Niall McLoughlin.

Discussing the company’s future plans, financial performance, and plans in GCC markets and across the region, Mubasher recently held the following email interview with McLoughlin.

 

Do you have plans for dividends distribution?

The distribution of dividends is decided by shareholders at the annual general meeting (AUM). It would be prudent in prevalent softer market conditions, that we focus on maintaining liquidity and cash flow, to maintain the financial stability of the company. Our approach will continue to be dependent on market conditions.

Could there be delays in delivering any projects? Would that be normal in the real estate sector?

At DAMAC, we always strive to deliver our projects on time. To date, we have delivered over 27,400 units with over 35,000 in planning and progress. In 2019, we delivered multiple clusters in AKOYA, Longview in DAMAC Hills and Ghalia in the Jumeirah Village Circle. The year prior, we delivered over nine projects in the UAE, Qatar, Jordan, and KSA. Our focus remains on deliveries for this year, with deliveries happening every month across our portfolio.

Do you think real estate is going through a crisis now despite the recent government’s initiatives?

Dubai’s real estate sector has always been and will continue to be, a key pillar in the Emirate’s economy. Contributing 13.6% to Dubai’s GDP in 2018, the real estate sector remains attractive for global investors, both individual and institutional. Dubai’s real estate market is relatively young and has a long and fruitful journey ahead of it. Visionary leadership, a stable government, and the Emirate’s pro-growth agenda will continue to contribute to the progress of Dubai’s real estate sector. One of the main challenges that we have been facing in the current phase of the real estate cycle is the imbalance between supply and demand. Real estate developers need to be more responsible, curtail new launches in the market in the short term, and allow the existing supply to be absorbed.

What is the current position of DAMAC’s financial and liquidity position?

DAMAC is a financially stable company that has historically paid for its land and debt commitments on time or ahead of schedule. Besides having nearly AED 5 billion in cash and bank, we paid down debts of $271 million in April 2019. With this, we have repaid our $650 million Sukuk issued in 2014 well before time and reduced our gross debt by AED 1.5 million since August 2018.

Total revenue for 2019 stood at AED 4.4 billion. Shareholders’ equity stood at AED14.1 billion, while total assets stood at AED 23.8 billion as of 31 December 2019. Considering the current market conditions, we are focused on staying financially strong while paying down our debts in a timely manner.

What is your plan to enhance operational performance?

At DAMAC, we are focused on delivering projects that are already in our development pipeline. Our strategy is aligned with the overarching need to create a balance between supply and demand in Dubai’s real estate market. The future of DAMAC has always been linked to the aspirations of this city, and in terms of new developments, we are limiting new launches and creating products that suit the evolving needs of Dubai. Also, DAMAC is expanding its global footprint and is actively looking for suitable opportunities in Oman, Saudi Arabia, the US and the Maldives.

Do you plan to expand in KSA in the near future?

The reforms introduced by the government, combined with a long-term vision for the future is a good sign for investors and entrepreneurs alike; we are actively exploring the KSA market for the right opportunities. We recently announced the opening of our first luxury hotel, DAMAC Towers Arjaan by Rotana in Riyadh.

What is your outlook into the Saudi hospitality and real estate markets in the light of the current temporary slowdown across GCC markets?

The Kingdom of Saudi Arabia is undergoing a phenomenal social and economic transformation. In a bid to diversify its non-oil economy and attract FDIs, the government has launched a series of initiatives, amongst which, the Saudi Vision 2030 stands as a blueprint for the future and has already shown great results.

Saudi’s tourism market is growing on the back of visa and policy reforms. Today, tourism is expected to generate SAR 138 billion for the Kingdom by 2023, with an annual 5.6% increase in the number of visitors by 2023. Under the Vision 2030 reform plan, domestic tourism is also on the rise, almost doubling to 70.5 million by 2023 from a mere 47 million in 2018.

Considering the heightened economic activity in the country, the demand for affordable housing is also on the rise. The government is also taking proactive steps to increase homeownership among Saudi nationals to 70 per cent over the next decade. The multiple aspects of Saudi’s transformation, which are interconnected to each other, makes for an ideal environment for investments in the country’s real estate and hospitality markets.

Are you looking to invest in Oman?

Oman’s real estate market is transitioning and we can see how a growing and young Omani population can bring up the demand for residential real estate. The market has witnessed some challenges, especially with declining populations of expat segments; however, the outlook remains positive with the government’s proactive measures such as the REIT legislation and the proposal to allow foreigners to buy properties in certain areas. At present, we are working on the development of Mina Al Sultan Qaboos Waterfront.