Dubai’s Damac plans more London projects to follow launch of Versace-themed development
Damac Properties says its international arm, in which it holds a 20 per cent stake, is planning “more than one” project in London, where the Dubai-listed firm yesterday launched its first development outside the Middle East.
Hussain Sajwani, Damac’s founder and chairman, said he was meeting planning officials in London following yesterday’s launch of the Aykon Nine Elms development. It will feature the interior designs of Italian fashion brand Versace.
“We’ll be looking at more projects in London,” said Mr Sajwani. “This is our first, but it’s not going to be the last project that we’re looking at.”
This week, Mr Sajwani will visit the office of the mayor of London, as well as local councils and planning officials.
“The London market is extremely competitive when it comes to acquiring a site. It is not a simple process,” said Mr Sajwani, adding that Damac was not eyeing any site in particular, although it was always looking for one.
Damac would finance the building of the 50-storey Aykon Nine Elms tower with its shares and loans from banks, with which talks were at “early stages of discussion”, said Mr Sajwani.
The 360-unit project, overlooking the River Thames, will include a gym, indoor swimming pool and spa. Due for completion in 2020, the development is located in a regeneration area, adjacent to Battersea, which will include the new US embassy in London, which is set to open late next year.
Prices at Aykon Nine Elms – which include one, two and three-bedroom units – range from £700,000 (Dh4 million) to £4m. The penthouse units have yet to be priced, while the 90 “affordable” and intermediate-priced units were not included in yesterday’s launch.
The units are initially being sold to UK investors, but the developer expects interest from prospective buyers from the Middle East and Asia.
However, there are doubts as to whether they are sufficiently affordable for UK buyers.
“Demand for units in large-scale developments like Akyon and generally in the new development heartland of Nine Elms is almost 100 per cent international,” said Naomi Heaton, the chief executive of London Central Portfolio, a London-based residential property fund manager.
“Despite any UK government mandate for new-builds to be marketed in the UK before being offered out overseas, the price point in these developments is too high to be attractive to UK buyers.”
The launch of Aykon Nine Elms comes a week after UK government figures showed that London house prices grew by 4.7 per cent in the year to May, below the national average of 5.7 per cent.
Niall McLoughlin, a senior vice-president at Damac Properties, said such “sustainable” growth in London property prices indicated the market’s maturity.
“That’s the draw of London for us – a healthy, mature, regulated market,” he said.
Aykon Nine Elms is being developed by Dico UK Property Holdings, a unit of Damac International. Damac Properties owns 20 per cent of Damac International, while Mr Sajwani holds 80 per cent.
Mr Sajwani said there were further opportunities outside the Middle East, but he had “no plans” to undertake property ventures unconnected to Damac. Property prices in Damac’s home market of Dubai were stabilising, he said, adding that was a healthy sign after two years of double-digit growth.
On the currency front, the strengthening of the US dollar, to which the UAE dirham is pegged, has not had a big impact on his business, he says.
That could even prompt, for instance, more Indian investors to pump more money into Dubai’s property market. “When they see that [the rupee] is going to go down, they take their money out quicker and put it in dollars, or a currency-pegged property like Dubai,” he said.
Damac has worked previously with Versace on a property project in Jeddah, and a collaboration in Beirut is due for completion by year-end.
Gian Giacomo Ferraris, Versace’s chief executive, said the partnership with Damac was helping to build Versace’s interior design credibility in international markets.
This was important because of Versace’s plan for an international stock market listing. “We want to enter the stock exchange in the next year,” said Mr Ferraris.
“It could be London, absolutely. Why not?”
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Updated: July 20, 2015 04:00 AM