Face to face: Ziad El Chaar, MD, Damac
Damac Properties has built a reputation with its developments throughout the region, but the buzz around Akoya by Damac in Dubai has been increasing since its launch almost three years ago
With a number of residential and hospitality projects for high-end customers already present in the market, Damac’s luxury development spree continues with 44,000 units currently under construction, with an approximate value of just under $20bn (AED73bn).
Among its largest projects is the Akoya by Damac master plan, Akoya Oxygen, and 10 other projects in Downtown Dubai. The Dubai-based developer has recently awarded 25 construction and consultancy contracts, worth $816m (AED3bn), in the first half of 2016.
It includes the contract to build more than 2,678 villas within its Akoya Oxygen project, and the golf apartment buildings at Carson – The Drive within its $6bn Akoya by Damac development.
Akoya, one of Damac’s mega mixed-use developments, was launched in October 2013. The 390ha plan, is currently being built off Umm Sequim Road in Dubailand and features an 18-hole championship golf course within the Trump International Golf Club. It is surrounded by villas, townhouses, luxurious apartments, and a dining, shopping and entertainment promenade, The Drive.
Speaking with Construction Week, Ziad El Chaar, managing director at Damac Properties, says: “All that has happened in the area, which was a desert [and] filled with sand, was built in two and a half years.”
The golf course is completed and the handover of 800 to 900 villas is imminent, according to El Chaar.
“To move quicker, we have a huge number of contractors working at Akoya. With one contractor, you have the risk of delays. Though dividing [the development] puts more pressure on construction management, it makes you work faster with less risk.”
Founded by Emirati businessman Hussein Sajwani in 2002, Damac Group has delivered over 15,800 houses, and approximately 2,000 hotel units, as of March 2016. The company also has a development portfolio of 44,000 units at various stages of progress and planning, including 13,000 hotel rooms, serviced apartments and hotel villas, which will be managed by its hospitality arm, Damac Hotels & Resorts.
“Akoya is cut in phases, including villa, mid-rise and high-rise apartment clusters — all located between Hessa Street and Al Qudra Road,” El Chaar says.
The three mid-rise apartments of eight floors each, the first ones in Dubai to be built on a golf course, have been completed last year, he adds. A two-bedroom apartment in the mid-rise units, with a full view of the golf course, costs close to $545,000 (AED2m).
“The mid-rise apartments are for sale, and we are now mostly all sold out. With 480 mid-rise units, we still have somewhere between 20 to 30 units left for sale — four of which are show flats, which we cannot sell,” El Chaar states. “We will start inviting people to come and live here by September 2016.”
Inspired by the Beverly Hills lifestyle, the development will also include a spa, boutique hotels, and international schools from kindergarten to secondary. The first school in Akoya, Jebel Ali Primary School, will open in September — the same time handovers begin. “We have two plots allocated for hospitals and clinics, but we haven’t started yet,” he adds.
Out of 2,145 villas that are under construction at Akoya, more than half of them have their structures ready. “The finishing is what’s left,” El Chaar says. “Part of Akoya’s delivery schedule for this year is to hand over the first set of villas.”
El Chaar claims that Akoya has the biggest variations of villas in terms of looks, shapes, and colour, compared to any other master plan in Dubai.
“When we launched in 2013, villas cost $231 (AED850) per square foot. Today, the prices vary depending on the location of the unit within the cluster. The lowest is $313 (AED1,150) per square foot, and it goes up to $354 (AED1,300), for the units behind the golf course.” For the units on the golf course, prices are higher, he mentions.
“So far, we have delivered more than 15,500 units, most of which were in the UAE, between Dubai and Abu Dhabi,” he says. “Out of these, some are up to 10 years old. It is the uniqueness of projects that dictates supply and demand,” according to El Chaar.
Akoya also features 160 hotel villas, with interiors by Paramount. “They come fully furnished and we provide hotel services. We are hoping to finish them by the end of 2016,” he says.
“Building a golf community in the desert is a burden for developers, they take a lot of time when they go into such projects. We know Dubai is a target for premium customers, and golf would be a major attraction for them,” he says. “How many golf communities in Dubai can you supply? Today there are two golf communities in Dubai being built, but that’s it. Living in a golf community is more desirable.”
Damac is currently in talks with a Canadian company about bringing an outdoor synthetic ice rink, made out of plastic, to Akoya. The rink will be made of interlocking panels, which fit together like a jigsaw puzzle.
“[It] is an outdoor ice rink made of materials that are exactly treated as though they were ice,” El Chaar tells CW. “This will be ready in three years’ time.
“We haven’t placed the order yet, we are still in discussion with a Calgary company,” he adds, describing the plastic rink as durable and easier to maintain than an actual ice rink.
“This is what you see in many universities in Canada — it is less costly to maintain and it doesn’t use energy to freeze the water. You can polish the rink to be as slippery as an ice rink, but you can install it outside, in the desert.”
However, despite being “mostly sold out”, the Dubai developer reported a 33% decline in year-on-year sales for the first quarter of 2016, as buyers adopted a watch-and-see approach.
Revenue fell to $441m (AED1.62bn) compared with $653m (AED2.4bn) a year earlier. Net profit also dropped by 15% to $408m (AED1.05bn). The developer booked $544 (AED2bn) in off-plan sales during the quarter — a drop of 28% on the same period last year.
“Most of our buyers are not residents,” El Chaar says. “70% of the people who buy in Dubai are non-residents — they are investors, people buying a vacation home, people buying to send their kids to study in Dubai. Damac’s profile of buyers include a whole lot of diverse nationalities — from the GCC, India, Pakistan, Britain, the Levant, and North Africa.
“Investors in a golf community will always give you returns higher by approximately 20% than investing outside a golf community.” He concludes by adding: “We hope that the real estate market will recover soon. We are on track with Akoya, and hope to complete it on time.”