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Sat 10 Oct 2009 04:00 AM

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Top Trump

After being whisked off from the Cityscape opening press conference by organisers last week, Donald Trump Junior was hurried into a private conference room for an exclusive chat with five senior journalists. Trump tells Construction Week editor Conrad Egbert his thoughts on the region.

Top Trump

After being whisked off from the Cityscape opening press conference by organisers last week, Donald Trump Junior was hurried into a private conference room for an exclusive chat with five senior journalists. Trump tells Construction Week editor Conrad Egbert his thoughts on the region.

Trump Junior, or ‘Baby Trump' as he is affectionately known as in some circles, is a sharp man. He's as skillful a businessman as he is with answering questions in a very politically-correct and diplomatic fashion - but then, after all, he is an executive vice president of the US-based multi-billion dollar Trump Organisation.

But what brought the real estate heir to not-so-sunny Dubai? Was he meant to be the top trump at Cityscape and expected to inject confidence into the region's property market? Or was he simply here because he believes in the strength and resilience of Dubai, which governments have missed no opportunity to shout about?

By the looks of it - a bit of both. "The last time I came to Dubai was about 15 months ago, just before the whole crash happened," said Trump looking a little nervous in the hot seat. "And to be honest, the foreign media has given us a totally wrong impression of the region. We thought we were entering a dust bowl where nothing is happening. But I'm glad to say it's certainly not the case."

But while optimism was the general feeling from Mr Trump, he did say that a slowdown was obvious.

"Its not a total stand still," he clarified. "One can definitely see the difference in the pace of construction now than before, but it's not a write-off, like the foreign press has being saying."

The Trump International Hotel and Tower, the organisation's first multi-billion dollar project in the region, was put on hold indefinitely in May. And with the restart of construction work no where in sight, Trump's optimism, especially considering he hasn't bought any property in Dubai, had to be taken with a pinch of salt.

"I would love to go forward with the project in the next two years but I don't know if that is going to happen," he said when asked to shed some light on the inner workings of the Trump deal with Nakheel. "I'd say Dubai stopped building in time. It was a good business decision. They didn't go on pumping good money in after bad money in order to carry on with a project. Some developers are still in denial about the downturn. They're throwing in good money after bad. If it doesn't make sense, cancel it. There is a lot of excess supply in the market for us to be able to pick up that sort of project.

"Also I want to get the project done, but in a responsible fashion, unlike a lot of development that has been done here."

He added that the Trump hotel and tower had to be built to standards that are better than what is currently prevalent, confirming again, the many quality problems that the region's construction market has faced in the past. He said that his hands were tied at the moment with regards to work on the tower and that Nakheel was responsible for its restart.

"There is a time frame that we're looking at but that is Nakheel's decision. We are not an equity investor, but we have an active marketing role," he said.

So did the Trump Organisation, which has developed many successful projects including the Trump Place project, on New York's Upper West Side, the Trump Park Avenue and various hotels in Chicago and Las Vegas need to enter the market with a local developer like Nakheel?

Trump thinks so. "It was a business decision. We entered into an agreement with Nakheel, because it's quite simple - would we rather enter the market hand in hand with the biggest developer in the region or compete with them?"

For the moment, the Trump tower in Dubai is still on hold and it is likely to stay that way for a long time to come, especially with Nakheel saying it has no thoughts on the matter for now. And in this fast moving world, with quick-thinking businessmen, could Dubai end up losing its appeal?

Maybe not. "We've assessed working in other areas in the region but for most of the part it hasn't had much of an appeal for the Trump organisation and what we stand for," said Trump. "Saudi Arabia seems to be an option in the near future if things change a little, but for now we're an organisation that is out there and more liberal."

Dubai now has the tallest building in the world along with a host of other construction feats that have gone on to become the world's firsts in many categories. For the Trump Organisation, this was a golden opportunity to make their mark by being part of a flashy project in true Trump style. But when a flashy real estate mogul says reality is of essence, it should be a lesson learned.

"I've always said, in Dubai you're only limited by your imagination and the laws of physics," said Trump. "Earlier, unless you built something extreme it wasn't considered viable.

"In order to drive one dollar more per foot, developers ended up investing 75 more and that didn't make sense. Now more of a reality is returning to the market and the competition pool has narrowed down, also making it a more talented pool. People didn't know the difference between luxury construction and just good construction either - this has changed too. Now people know what to expect and that will take this market forward."

But market corrections and normal economic changes are all well and good, but Trump also says that Dubai needs to consciously fix a lot of problems on its own before it can gain the strength and momentum it saw a couple of years ago.

"Dubai has to become transparent," he said. "Even oversupply of certain types of projects in the region and the country's stringent immigration policies and working visa rules have to be changed.

"I had some friends here who I used to visit on my trips to the region and before I'd come down I'd send them emails saying I'm coming. This time round 75% of those emails bounced back because they're all gone," he complained.

"If someone loses their job they have to leave. These people have moved their lives to come and work here and invest in this country so it doesn't leave a good impression when these people are expected to uproot themselves and head back home when things become difficult. You're ostracising people who took the leap. If and when Dubai begins to look up, do you think these people will come back? These are successful people from all over the world who have come to this country to work and live and their being here benefits the country tremendously.

"Also in order to get back on track you need population growth. A negative population growth is not going to help the country get back on track; it will only worsen the situation."

Last month it was reported that the UAE ministry of labour was finalising proposals to make part time work in the private sector possible. If this comes into effect, it could boost the job market ahead of the so-called upturn. But when is this upturn likely and what can we expect from it? The golden question was put to Trump.

 "We're still going down but not as badly as before," he said. "The next bubble here is distressed real estate, where investors will try and sell off property for a lower premium than they bought it, in order to minimise their losses. There will definitely be no ‘V' shaped recovery but we can take refuge in the thought that we have seen the steepest part of the downturn," he added.

The Man

Donald J Trump Junior is an executive vice president at The Trump Organization, working alongside his siblings, Ivanka and Eric to expand the company's real estate, retail, commercial, hotel and golf interests nationally and internationally.

Trump directs new project acquisition and development for the company throughout the world - in areas from Eastern Europe to Southeast Asia, the Middle East to South America and mainland China to the United States.  In addition to new project acquisitions, he actively oversees the firm's current and new property portfolio, which contains over 70 projects.

He is involved in all aspects of real estate development, from deal evaluation, analysis and pre-development planning to construction, branding, marketing, operations, sales and leasing. He joined the organisation in 2001.

He has also been featured as an advisor on the highly acclaimed NBC show The Apprentice, and is now a star of the Celebrity Apprentice, currently approaching its third season. He received his Bachelor's degree in finance and real estate from the Wharton School of Finance at the University of Pennsylvania.

Trump recommends Dubai needs to fix:

• Transparency - Developers, individual or government, need to become more transparent.

• Oversupply - There is excess inventory and too much supply in the market.

• Immigration policies - Sponsorship system and visa rules need to become more business oriented and less rigid.

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