Damac Shelves Expansion and Denies IPO, Merger Plans
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Dubai’s largest private real estate developer Damac Properties on Tuesday said it was not the right time to go for an Initial Public Offering (IPO) and that it has shelved plans to expand operations into India, Pakistan, Morocco and Tunisia due to the current market conditions.
“No company should go for an IPO at this time. Future plans for the
public issue will depend on the market conditions,” said Hussain
Sajwani, Chairman, Damac Holding.
Damac was expected to list on the Dubai Financial Market by as early as
first quarter 2009 to help fund projects at home and abroad.
On the cancellation of Damac’s ambitious overseas foray which was aimed
at boosting its portfolio to $45 billion, Sajwani said the current
priority was to focus on projects in Dubai, Abu Dhabi, Egypt,
Kurdistan, Jordan, Saudi Arabia and Qatar.
“We will relook at the Subcontinent and African markets in 2010 based on the situation.”
On downsizing its staff strength by laying off 200 people, Sajwani said
the job cut represented only a fraction of its workforce of 8,000
people. “However, we are still hiring staff for those departments that
we need people.”
Sajwani also dismissed as pure speculation reports about Damac’s merger
move with another Dubai-based entity. “We have no plans for mergers
with any one.”
“My message to the market is to be patient and not panic as the market
will improve in due course of time as the world markets improve. US
economy is expected to be out of recession by the 3rd quarter of 2009
and we believe that the market here will also improve simultaneously,”
he said.
“A correction is always healthy for a market as things move from
unrealistic to realistic mode. Some projects will be slowing down and
this will have a positive effect on demand. Another indicator is that
the rents have not gone down whether it is residential or commercial
which means that there is still lot of demand as opposed to what the
rumour mills are saying,” he said.
He said Damac would be handing over a further 7,100 units in 2009/10 across the GCC region.
“Damac recently handed over 571 units at Lake Terrace in Jumeirah Lake
Towers. Before the end of 2008, we will deliver 192 units at the
Executive Heights project at TECOM, 198 units of Tera Del Sol
developments in Discovery Gardens, 536 units at LakeView in Jumeirah
Lake Towers and 847 units at The Crescent, located at IMPZ in Dubai.”
Sajwani claimed 2008 had been a good year. “We deposited around Dh700
million in the Escrow Account. Within the first 9 months of 2008, we
have posted profits to the tune of over Dh500 million.
“We have awarded Dh2.5 billion worth of contracts in the first nine
months of 2008. From initial consultants through to enabling and main
contractors, the company has awarded more than 60 contracts in the
first nine months of the year.”
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