Peter Riddoch on the record

Peter Riddoch, Damac CEO

Damac CEO Peter Riddoch tells his side of the story to Construction Week in an exclusive, no-holds barred interview on Damac’s new projects and why it courts controversy.

Is this a good time to launch projects?
Some people will look at a glass that is half empty. We will always look at it half full. When you do that, you’re more able to find positive ways to move forward.

And what is the new scheme?
Something that we’ve been working on pretty hard, particularly during 2009, is what we call our Recovery Programme. We’ve been very committed to the construction and delivery timetable of our projects; in fact we called last year the year of construction.

We’ve been able to speak to some investors who are nervous about the market and have offered them the chance to come out of a project that will be completed much later in the future and move into another project that will be completed, lets say this year or the early part of next year.

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But how will you do this? Aren’t all your projects sold out?
Many of them are but we can cherry pick locations, plus some investors have defaulted. If someone says they’re fine with waiting till 2012 then so be it, but many want to transfer to projects that will finish earlier.

We’ve also got a number of projects that have sold well but we have not yet started on site due to the design-development process. And we’re trying to ensure that we can get as many of them [as possible] started between June and the end of the year. So in the course of this year we’ll award AED2 billion (US $544 million) worth of projects.

And where has this money come from?
There’s a list of projects that we’ve already sold, so there are already significant funds sitting in escrow accounts and we would expect people to make subsequent payments as well. They’re very well funded.

So there’s no truth in the reported sale of 40% Damac stake?
That was dreamed up out of thin air. There is no correctness in any shape or form. We are a wholly owned business. The proprietor is Hussain Sajwani.

Wouldn’t it be wiser to hold on to your money right now?
It probably pays to take advantage of the downturn and drive forward because contractors and suppliers are hungrier than before and so we get competitive prices, which allows us to get started on site. I think it is important to go forward because these projects that we’re thinking of building will take two to four years to develop.

Would you say confidence in Damac and the region has waned?
We’re making significant moves to demonstrate our commitment to Dubai and our confidence in the market. Prices have come down and everyone has now had to sharpen their pencils.

Rera’s introduction of escrow accounts has given a lot of confidence to the market. When the world begins to turn around, investors will look at Dubai and have trust in it, and as a developer we have to try and make it happen.

It seems that Damac is surrounded by controversy?
There are often negative stories in the press. I’m not going to say if they’re wrong or right but in every situation things happen. There are positives that can be talked about and on a completely unrelated matter – the challenge we face now is a lack of confidence.