Second phase of Dreamz by Danube to launch
First phase of Al Furjan development sold out within a day
Danube Properties, the real estate arm of building materials supplier Danube Group, plans to launch a second phase of the ‘Dreamz by Danube’ before December this year, following the rapid sell-out of its debut development project in June, the company's founder and chairman Rizwan Sajan told Arabian Business.
The well-known UAE firm branched out into the real estate sector in June this year with a 171-villa project, ‘Dreamz by Danube’ in Al Furjan.
The project generated huge interest, so much so that when it eventually went on sale, the villas sold out on the day.
“What we did with Dreamz was market it at a very reasonable price - AED2.5mn ($680,633) for a three-bedroomed townhouse in a prime location. We were able to sell it within three hours,” Sajan said.
He added that the strength of the Danube brand and its marketing plan had a lot to with the success of the project.
Now, Danube Properties plans to launch another phase of ‘Dreamz by Danube’ later this year.
“The second phase – another AED500mn – is coming soon before December,” he said.
The company has acquired a plot for 100 villas and is looking to include another 70 in the project, he added.
Much earlier than that, however, Sajan said Danube Properties will launch an apartment project in Studio City this month.
He has bought several plots in the area, where he intends to develop “nothing less than 1,000 apartments”.
He insists that he will not look to develop any further projects until the current ones are sold.
Sajan admitted that he had looked at entering the real estate market just before the crash, but became concerned at the volatility of the property prices.
“I wanted to start it a long time ago, in 2006 or 2007. Many of my friends who are in the property business used to come and ask why I didn’t start, with the name and a company that deals in the business.
“I found the market very unstable at that time, because it was growing at any given time. When you buy a property, after one week you were offered ten percent more. Standing in a queue, you could get two percent for your place.
“It was a very unrealistic thing happening and that was scaring me. It wasn’t the way that the property business could work in any part of the world,” he said.
He said he was encouraged to finally enter the real estate market after Dubai’s Real Estate Regulatory Agency (RERA) has put in place “a lot of controls for a developer – how you launch a property, how you sell a property”.
Sajan said he has no concerns about talk of a property bubble, describing the current price drop as “a little bit of correction here or there” and believes the next phase of his projects will sell out quite quickly.
“If it’s a bubble situation, I’m doing one property development at a time. I’m not buying a land-bank, and keeping it in reserve. I’ve sold one property, bought another part of Furjan, and bought another for apartments.
“Only after I sell this, I will look for the third project and the fourth project. So even if there’s a bubble, it’s a very calculated risk that has been taken. I personally feel that the second project will be sold as fast as the first project, because we already have very strong vibes,” he said.
He pointed out that not only will he make profit on the property, but the building material that will be used will also be bought from Danube.
“If there is a bubble, I’ve already got 25% from my customers – the ten percent down-payment and the 15% I collect within 60 days. I would be playing on a 20 to 30% margin, including my building materials, so we are already down by 50%. During the bubble it’s okay for me because the price won’t go down 50%,” he said.