In 2002, Damac Properties emerged. It was into top-end developments in Dubai. Hussain Sajwani marketed these aggressively. The key here was making off-plan sales. This was his business model, and it was highly successful.
Hussain Sajwani was also able to see the property crash that came in 2008. This was when sales dropped dramatically. He took fast action. He decided to cut costs as well as to preserve cash. This way the DAMAC properties had ample cash to protect it.
In fact, DAMAC group was able to get through this crisis as they could handle cash carefully. They were able to control costs. They also reined in some projects.
Hussain Sajwani says that things have changed a lot in the property market in Dubai. Prices are rising, and off-plan sales are increasing. There is Rera imposing tough new conditions in Dubai on land sales as well as on escrow accounts. This will be good for Dubai in the long run.
The business model of DAMAC properties is unique and highly successful. There are no debts being held for land. Hussain Sajwani pays completely at the beginning only. Next, there are independent escrow accounts. This means that cash will not get transferred from one account to another. Hence each development needs to be sustainable and able to support itself.
The cash reserves are retained. These are placed either in fixed deposits or several government bonds. Hence construction will not suffer as there are sufficient funds. So even if the market turns, the construction schedule is not disturbed.
The thoughts of Hussain Sajwani are moving towards expansion especially with the backdrop of economic recovery in Dubai. He is looking at Saudi Arabia with typical upmarket projects in Riyadh as well as Jeddah. Another country is Turkey which is being looked at.
Hence DAMAC property was launched at the right time. Now he is going to expand it as the market is showing signs of revival. He may even be thinking of getting things ready for his son to take over. All looks well for Hussain Sajwani as he goes ahead with his expansion plans.
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