PORTFOLIO | Interview
Many potential investors have a view
that buying off-plan property has risks
associated. What‘s your take?
It all depends on which off-plan
development the buyers are investing in.
If investment is made in a right off-plan
project, it could turn out to be better than
buying ready-for-possession properties.
tough market conditions of 2008-09.
This coupled with the fact that our forte
in building materials further gives us a
10-15% cost advantage, that’s transferred
to our customers. This also gives an edge
over other developers operating in this
market since most of them have to source
building materials from us.
Do you believe the rent-to-own
schemes are catching up with
developers and buyers alike?
Buying a house in Dubai is often a better
idea than renting one, especially for the
expats who are going to stay in Dubai for a
long time. However, in case after spending
5-6 years or more, if buyers have to go
back to their home country for any reason
whatsoever, they can get relief from the
fact that there’s always an exit clause in
the property agreement whereby they can
sell that apartment to another buyer at the
prevailing market rate.
How do you plan to fund your projects
going forward? Will you be looking
to raise funds through own equity, or
you’ll be exploring external funding
such as bank loans?
At present we don’t require external
funding as our financials are very strong.
We’ve enough cash flow to plough back
the profits in the development of new
projects. Our approach is to go slow
and finish one project at a time. It’s only
when we finish selling off a particular
project that we go for another one. This is
unlike other developers who’re launching
multiple projects at one go, which
makes it difficult for them to execute and
handover all projects within the deadline.
With the crude oil prices slightly
jumping back to $40 levels and equity
markets in the recovery mode, do you
have plans to go for public listing/IPO?
Ours is a small family business and we
don’t have plans to go public. In the future
we may go for it, but not at present. In
fact, we’ve never felt that we should go to
a stock exchange to raise capital.
What is the biggest challenge facing
the UAE’s and the region’s real estate
market? What sort of hurdles you are
experiencing in the current market
situation?
For most developers, the biggest
challenge in current market conditions
is to sell their inventory. In so far as
we’re concerned, we haven’t had to face
the selling pressure and liquidate our
properties. We’ve successfully overcome
the market challenges simply because of
the brand equity that we have built up
over the last two decades. Our buyers,
investors, and stakeholders trust in
Danube brand and that’s the reason
why they invest in our projects. Several
developers have dabbled in affordable
property segment, but unfortunately
many of them could not be as successful
as we are.
Many players in the region’s real estate
sector are struggling to maintain
a positive cash flow in the current
scenario. How are you optimizing the
cash flow management?
For us, arranging project financing has
never been an issue because of our strong
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