Damac says project funding is secure

Damac, one of the region's largest private real estate developers, has downplayed reports that the firm is set to launch an initial public offering by year-end or early 2009, saying they have got enough funds to fuel their existing commitments and recently announced projects.

"It's not really appropriate for me to comment on market speculations and that's what it is, a market speculation," Peter Riddoch, CEO of Damac Properties, told Emirates Business.

"The business model in Dubai is that customers pay on installments. So we get most of our funds from our customer. Our market is sufficiently strong that before we are onsite we have substantially sold out most of our projects," he said.

This newspaper had earlier carried reports that the developer would be coming to the market later in the year and that the funds raised would be used to finance projects in Dubai and overseas.

Riddoch said the property sector would remain healthy despite the many negative reports of the gloomy economic climate and the alleged cooling down of the sector.

"We expect this year and the next year to be very good," he said. "In the UAE, like the Gulf as a whole, you still have demand greater than supply and whenever you have demand greater than supply it is possible to maintain prices and even increase prices because the market can sustain it."

To show its confidence in the market, Damac has given everyone who bought an apartment at Green Park at Cityscape Dubai on October 6 a rental return guarantee of 24 per cent over three years or a 10 per cent discount on the property value.

Damac is also guaranteeing a 40 per cent rental return over three years to buyers who invest in the new Executive Suites tower in Dubai's Business Bay. The guarantee works out as eight per cent a year over three years. Alternatively, buyers can get a 10 per cent price discount.