Because we know it’s easier said than doneMay 28, 2015 9:53
Secret Life of Hussain Ali Habib Sajwani
Hussain Ali Habib Sajwani : the man behind Damac
September 22, 2008 7:31 by kippreport
According to the official history, the specialist catering company launched in 1982 slowly expanded into real estate, hospitality, insurance, investments, logistics and commercial trading. Damac now has regional offices across the world, in most of the GCC countries, the UK, Russia, Lebanon, Egypt, Pakistan and Iran.
But today the Damac name is synonymous with Damac Properties, the real estate arm founded in 2002.
The developer soon became famous for its incredible promotional offers. In 2006, one promotion gave away Jaguar cars as an incentive to buyers. Later, it was tickets to the World Cup in Germany. After that, the company was giving away the keys to small studio apartments in its developments to any takers of larger units. It also promised to give away Bentley cars at one point. During this year’s Dubai Shopping Festival, it was private islands and jet planes.
Yet for all its flashy promotions, the company has often been criticized for lack of delivery: By one count, as of the first quarter of 2008, Damac had completed only three of the more than 70 projects it launched in Dubai over that last six years. The company defends itself by pointing out that delays are the norm in Dubai – citing, for instance, the region’s shortage of labor, which had led many developers to struggle to keep up with the workload.
Meanwhile, residents of Marina Terrace and the Waves, two of Damac’s completed projects, also complained of poor construction quality that led, for instance, to burst water pipes. Again, such complaints are all too common in Dubai in general.
Most recently, the negative publicity surrounding Damac came to head when the company tried to cancel its Palm Springs development on the Palm Jebel Ali, claiming that changes to the master plan had made the project unworkable. But after protests and threats of lawsuits from investors who had already bought units – some on the secondary market – the company backed off and agreed to revive the project.
“Damac takes the criticism and negative publicity very seriously and strives to make our company the best in the business,” says Sajwani in response to these complaints. “However, when you get to the size of business that we are, and as the largest privately owned property developer, we will naturally be targeted. An example is that if someone is going to target the fast food industry, they will naturally target McDonald’s.”
Many people active on the Dubai real estate market claim Damac has essentially been following a pyramid financing structure. They say it has been raising money from financiers with the promise of new projects, but then using that money to fund earlier unfinished developments that have gone over budget.
“Basically, to maintain funding as a developer, you have to continue to come up with new projects,” says one Dubai-based real estate consultant. “This isn’t purely a Damac thing. This is a thing that’s coming with a lot of developers…. You have a system whereby each [unfinished] project is being repair-funded, as we call it, by the project that is currently being discussed in the media.”
There have even been rumors that the company has received monetary support from the Dubai government to boost its cash reserves. Sajwani flatly denies this. “The government of Dubai is of great overall support to us, but we have not been involved in any financial support from them,” he says.
As a private company, the company’s finances are a closely held secret. However, it certainly appears to have enough cash to invest heavily abroad. In 2006, it unveiled the La Residence by Ivana Trump, a $150m, 27-story luxury apartment tower in Beirut’s downtown district. Last year, Damac reached an agreement with the Egyptian government regarding the $16bn Gamsha Bay development, which will cover total of 320 million square feet. And in June this year, it signed an agreement with the Kurdistan Regional Government of Iraq for a $4.5bn real estate project.