Dubai developer Damac Properties reaches out to Asian investors
Developer hopes to take its first London project to mainland buyers in September after targeting investors in Hong Kong and Singapore
Dubai luxury property developer Damac Properties will take its first London project to mainland Chinese buyers in September, through a partnership with Beijing-based agency 5i5j, its managing director Ziad El Chaar told the South China Morning Post.
The 50-storey, 360-unit apartment tower in London's Nine Elms area, overlooking the River Thames, was unveiled to investors in Hong Kong and Singapore on July 24-26, after its launch in London on July 22.
Chinese investors have become an increasingly important force in buying properties globally, and London is one of their favourite spots. Nine Elms is also familiar as Chinese developer-to-cinema conglomerate Dalian Wanda Group marketed its first London project in the same area a few months ago to buyers in its home market.
What is different about Damac Properties' Aykon Nine Elms project is that all the units will feature home products by Italian fashion house Versace. The Dubai company acquired the land parcel in Europe's biggest regeneration area - with more than two dozens of developers already there - in April.
"There is a lot of competition in London and a lot of established developers," said Chaar, who is leading his firm's global expansion. "But we believe the product we have introduced has set ourselves apart from all other developers in the market."
That means prices will be higher than many others, starting at £711,000 (HK$8.6 million) for a studio. Some units will cost as much as £4 million. International buyers need to put down a deposit of 25 per cent in the next 18 months, with the remaining 75 per cent due in 2020 when the project is scheduled to be delivered, Chaar said.
Damac Properties has already built two projects co-branded with Versace; one in Dubai and the other in Lebanon.
To broaden its customer base -currently 45 nationalities including those from the Gulf countries, the United Kingdom, Pakistan, India, Russian and Kazakhstan - Damac Properties started promotion campaigns in Asia a year ago, with two presentations in Singapore and one in Hong Kong. It also tied up with Chinese real estate agency 5i5j to sell its Dubai projects.
Chaar said Dubai real estate investment offers annual returns of 6 to 8 per cent, all tax free. Although some analysts are worried about home price falls in Dubai this year and possibly next year because of oversupply, Damac Properties and other local developers take a more optimistic outlook.
The current slowdown in Dubai, unlike the crash during the global financial crisis, is the result of government measures rolled out in late 2013, including a mortgage cap and doubling of the transfer fee to 4 per cent, in order to cool the market down to a more sustainable level, Chaar said.
"What is happening in Dubai is in the interest of everybody to create a sustainable market, just like the one in London," he said, adding that the growth of about 50 per cent between 2012 and 2014 was unsustainable.
London is regarded as safe-haven by foreign investors and annual housing inflation there is expected to stay at 5 to 7 per cent in coming years.
But global credit ratings agency S&P projected in June that Dubai home prices are likely to fall 10 to 20 per cent this year because of subdued demand, slower economic activity and downbeat investor sentiment.