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Mr. fix it

Then we would like to allow you, now that you are stabilised, to have exactly the same square footage in a wonderful property we are building, for example, in Business Bay, where the values are higher.

Nobody is forcing anyone to do anything - it is up to the buyer. We believe that 80 to 90 percent of people will want to take advantage of this. For the 10 to 20 percent of people that want to stay, we will build them something, but then I only have to build one building rather than five. We believe that this is a fair proposal. We will honour peoples' rights. So our customers who accept the offer have 50 percent less to pay, and a property they will enjoy more."
This sounds like some plan. We will come back to how the market is receiving it.

"The third 25 percent of projects, we have to slow them down. The reason for this, and we are talking about projects that are already halfway finished, is because of infrastructure problems. And we slow them down on purpose because our customers right now are not able to pay. So we are making it easier for the customers.

"And the last 25 percent of projects go ahead as scheduled."

So how have Deyaar's customers reacted to the news that the two properties they thought they were buying in one location will now be delivered to them as one property in another location?

"The majority is very happy, but you can't make 4000 customers all happy. Because 3500 right now are financially distressed, so the more you help them, the better."

Ok - so the Development Strategy was the first part of the three pronged master plan. What's the second? Giebel shifts forwards in his seat.

"The second part is the Financial Strategy. It comes in two parts. Here, we are handing out a different type of medicine. We are reducing prices on selected properties, because that is fair to the customer, and also because the construction costs will be declining. We are talking about reducing the prices of properties that have already been bought. We will give customers the credit back. Deyaar tries to be a fair company. You don't get your money back, but the percentage you have paid up increases. And then these customers are eligible for mortgage again. This all costs us a lot of money by the way. We aren't doing it because we like doing this, we are doing it to stabilise our customer."

Reader, you read that correctly. Deyaar are reducing prices on properties they have already sold.

"The second financial measure we have is the Deyaar Easy Payment Plan. Say, for example, a customer comes and he has to pay a ten percent instalment right now, but he doesn't have ten percent, we allow him to break it up into four 2.5 percent payments. Spread out over a defined period. We are trying to work with people. If they can give us nothing, there is not much I can do. But if customers are not toxic, merely distressed, then we believe we can work with them."

The third part of the master plan is regular communication with Deyaar's customers - keeping them up to date with what the company plans to do - effectively softening the impact of bad news, and making people feel valued.

I tell Giebel I am surprised by his strategy for survival - this hasn't been what I was expecting to hear. He grins. "Well, the difference comes down to not doing anything, or having a very dedicated strategy. Now we have a four pronged strategy to make sure that these people will pay up. Total customer base of Deyaar is 4300 people. Our size is manageable, which is a strength. Size matters: our plan is easier to implement than it would be for a company ten times our size. We are a speed boat not a tanker."

So, then, what does Giebel forecast in terms of growth for Deyaar in 2009? Famously, Deyaar's growth was astronomic during the good times. Giebel won't be drawn:

"Look, last year, revenues were up 200 percent. Profits up 100 percent. But growth is kind of funny. Dubai has allowed us to enjoy very good times over the last couple of years. Our profits were enormous. Our growth rates stunning. We enjoyed the growth, but now the time is to consolidate and to grow more realistically. We enjoyed the ride, but we will now build a foundation for more controlled growth. Our growth rate will depend on how well our strategy works.

"Deyaar is nothing without Dubai. But you tell me one city in the Middle East which has the infrastructure of Dubai? There is none. Then tell me one city in the Middle East that has the freedom? There is none. Dubai is an oasis in the Middle East. The recovery of Dubai, it is imminent. Dubai is too strong in its fundamentals. I don't know when it will happen, but it will happen. Dubai is solid."

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