By Andy Sambidge
Chairman says UAE 'correction' will be good for property industry in region.
The chairman of luxury developer Damac Properties says he is confident that a recovery in the real estate sector in Dubai will be seen in 2010.
Hussain Sajwani said that while he believed that the property industry was undergoing a "correction" in the UAE, it would ultimately lead to a more mature market where strong companies would continue to be successful.
Sajwani, who announced company profits of 500 million dirhams for the first nine months of 2008, said: "I believe that the market will recover in 2010 and that Damac Properties will be well placed to take advantage of that.
"We are financially strong and the majority of our customers have already paid a large percentage of the cost of their units. This means that we have the funds to continue to build everything we have committed to undertake and that whilst other smaller developers may struggle to deliver, we can and will, meet our commitments.
“It is already widely expected that there could be a shortfall of property by up to 20 per cent in Dubai 2010 and those companies that can continue with their plans will be the ones to capitalise on this."
His comments came the day after master developer Nakheel announced 500 job cuts and delays to some of its major projects.
Damac has reiterated its commitment to projects in Dubai, Abu Dhabi, Jordan, Qatar, Iraq, Egypt and Saudi Arabia but has confirmed that plans for projects in India, Pakistan and Morocco will be delayed until market conditions have improved.
Earlier this month, the company also announced the loss of 200 jobs due to the impact of the global economic crisis.
Sajwani added that the location of the properties being built by Damac would give the company the advantage during the downturn.
“In market conditions like these, location becomes even more important and I believe that people will still want to come to Dubai and live and work in places like Dubai Marina, Business Bay and Jumeirah Lake Towers.
"There will always be buyers looking in those prime spots and we will be there ready with the right product in the right location at the right time."
With location in mind, Mr Sajwani reiterated the company’s focus on projects already under construction and said that further expansion plans would inevitably take a back seat.
"We have been growing at a huge rate and when times are good this is the right approach. However now that the market has slowed, it makes good business sense for us to focus on those developments we have under way and not to launch any new projects. We are simply being sensible and taking an appropriate and responsible attitude. This is in the interests’ of everyone going forward."
Sajwani said Damac was making good progress at its major developments in Dubai and is expected to hand over about a further 7,100 units in 2009/10 across the GCC region.