Damac partners with Fendi to market Dubai and Riyadh projects

Hussain Sajwani is chairman of Damac, which has completed 20 per cent of the construction work on projects in the Dubai Marina and opposite Kingdom Tower in Riyadh. Lee Hoagland / The National

Damac Properties is banking on a return of off-plan apartment sales and a tie-up with the Italian fashion label Fendi in marketing two new developments in Dubai and Saudi Arabia.

Construction work on projects in the Dubai Marina and opposite Kingdom Tower in Riyadh is 20 per cent complete, Damac's managing director Ziad El Chaar said yesterday during the Dubai-based company's first press conference since the property crash in 2008.

Mr El Chaar pledged that Damac would announce new projects only when construction work was well under way, wary of how the market overheated during the exuberant off-plan selling of the boom years.

"Real estate announcements are back in Dubai," Mr El Chaar said. "We'll only be launching projects these days when construction has started - and construction in both projects are very close to the 20 per cent level. So these … are the days of a suit and a hard hat - and not only a beautiful suit and beautiful announcements."

Damac's 335-metre-high Dh1.2 billion (US$326.7 million) Damac Residenze tower is located between the Grosvenor House hotel and the Marriott in Dubai Marina. When completed, the development will comprise 500 apartments, the top 200 of which will be designed by Fendi. Damac hopes to attract investors from the United Kingdom, India and the Commonwealth of Independent States to buy apartments off plan, with prices in the range of Dh30,000 per square metre, or Dh3m per apartment.

In Riyadh, Damac is working on its Dh800m Damac Esclusiva tower comprising 100 serviced apartments, all of which will be designed by Fendi. Prices will average out at about 30,000 Saudi riyals (Dh29,382) per metre, Damac said, although it added that investment in the tower would be by invitation only.

Mr El Chaar said the Dh2bn cost of the projects would be financed entirely through Damac's balance-sheet funds and off-plan sales.

"I hope all of the Dh2bn comes from the off-plan sales because it then means that the sales process is successful," he said.

"This is what we are looking for. We are an experienced company, we know our market and we have already 12,000 units under development. The demand for real estate in this market never stopped. What we had before was a liquidity crunch. Now the liquidity is coming back into the market and we can see the growth coming back into the market. You can't have growth without liquidity, especially when it comes to off-plan sales."

Mr El Chaar declined to say how much Damac had paid to get Fendi on board to design the apartments, calling it a "private deal". But he said that in Damac's previous branded apartment schemes in Lebanon and Jeddah, units had sold for a premium of about 20 per cent compared with the developer's other apartments.

"Fendi and the Arab world both stand for tradition and together this is a very strong partnership," Fendi's honorary president Carla Fendi said in an interview. "For both cultures the home is very important - they are like Siamese twins in this respect."

Meanwhile Nakheel was also hoping to benefit from off-plan sales in Dubai.

The developer at the centre of the 2009 Dubai World crisis announced the sales launch for 33 studio apartments at its Club Vista Mare scheme on Dubai's Palm Jumeirah costing Dh1.15 million each. The scheme, which will be linked to the Nakheel Mall and Hotel will also include eight cafes and restaurants, as well as shops and a gym.

Construction work is scheduled to begin in mid 2013, with anticipated completion in early 2015.