Dubai-based developer Damac plans to have 4,000 new serviced apartment suites either built or under construction by the end of 2013, according to the firm’s senior vice-president Niall McLoughlin.
The company, which only launched its Damac Suites & Spa concept in January, told CW at last week’s event 75% of these would be built in the “Burjside” area of Dubai – close to the Burjside Boulevard building currently under way near Dubai mall which he said will complete during the middle of 2013.
“The balance will be in other planned developments in Qatar, Jordan and Saudi Arabia,” he said.
“We’re here at Cityscape taking a leadership position in showcasing serviced apartments. One year ago we had acknowledged that the market was beginning to turn.
“We believe we were ahead of the curve in terms of the market coming back – so we’ve had 10 or 11 months of development in progress on these projects.”
He argued that although there were currently around 20 existing aparthotel buildings in Dubai, “there are very few at five-star level”.
Recent tourism figures have showed that the city’s hotel market has shown strong signs of recovery, with hotel occupancy rates standing at around 84% and revenue per average room rates (RevPAR) showing a 60% increase in August (although a quieter Ramadan period in July would help to explain this.
“We know from our research that serviced apartments are very popular – particularly with visitors from the GCC such as our friends from Saudi who prefer a suite so they can bring their family.
Damac is focussing its efforts on its home market of Dubai, as McLoughlin said that he believed its regulatory environment is now “so solid” that it gives investors confidence.
“The developer by law has to show the plot registration, the unit registration, the zoning permit and have 20% of the building under construction or have the value of that in escrow before you can start selling. It’s one of the safest places to buy off-plan,” he argued.
“It’s become an attractive place to buy. Even though construction might have stalled for a while, the infrastructure in Dubai is miles ahead. Not just in terms of bridges and roads, but hospitals, schools and entertainment.”
He said that during the recent financial crisis the firm focussed on completing existing products as posed to launching new schemes and had delivered 37 buildings containing around 8,000 largely residential units to date.
“We’ve got 12,000 more under construction,” he said.
Damac recently handed over the Park Avenue retail and office scheme at 6 October City in Cairo for clients to fit out and it has reached the 28th floor of its 48-storey Al Jawhara apartment block on Jeddah’s corniche. McLoughlin said the initial 38 floors will be finished by the end of next year, but the top ten Damac Residences by Versace will take longer to fit out and will be ready in early 2014.
“We’ve completed the lobby area and if you were in there you wouldn’t know the construction was still going on above.
“It’s been a great sales tool for us. We completed it two months ago and it’s had a tremendous reception.”
The company has also topped out the first building at its Piazza scheme at Lusail in Doha, Qatar, and McLoughlin said the Residences at Business Central in the Business Bay area of Dubai could be completed “possibly by the end of the year”.
Other Dubai projects like Lincoln Park in Arjan and Madison Residence are set to complete in the first quarter of 2012.
“We’ve gone through the last couple of years doing what we needed to do,” said McLoughlin.
“We’re now one of the biggest developers in the region – we’re certainly the biggest private developer. Our name in the region speaks for itself.”
