Dubai boasts a strong regulatory framework for real estate, a sector that thrives with many new projects that attract both local and international investors. And with central banks worldwide cutting down interest rates — making financing more accessible and affordable — the increase in real estate transactions is not a surprising result.
For Hussain Sajwani, founder of DAMAC Group, 2024 is definitely going to be another record year for Dubai. DAMAC is a leading Emirati property development company boasting an impressive portfolio, including luxury real estate developments.
In this interview, he discusses Dubai’s real estate scene, their upcoming projects, and the company’s foray into the data centers business.
How do you assess the overall health of the Dubai real estate market currently? How about the luxury segment?
The real estate market is showing remarkable resilience and growth, shown by record-breaking transactions this year.
In September alone, we saw an unprecedented 18,038 transactions, with a big proportion being off-plan properties, showing strong investor confidence and a robust appetite for new developments.
The growth of Dubai’s luxury real estate market, in particular, is being driven by several key factors. These factors align closely with the UAE’s forward-looking policies and highly favorable market environment.
One tangible indicator is the recent surge in villa sales, which highlights a growing demand for upscale and spacious living options. There is a noticeable shift in consumer preferences post-pandemic, with a stronger emphasis on community living, wellness, and intimacy. People are seeking environments that not only offer luxury but also provide a sense of community with opportunities for socialization.
Recognizing this trend, we have further enhanced our community development portfolio with the launch of two new projects, DAMAC Lagoons and Riverside, which are designed to offer an integrated living experience. This is a trend that we are continuing to address with a forthcoming major launch we plan for November.
What are the challenges and opportunities facing the market in the coming years?
While Dubai’s real estate market is thriving, it faces challenges, such as the rising cost of living and property prices. However, these challenges also present significant opportunities.
Dubai’s continuous infrastructural enhancements and its status as a global business hub attract substantial foreign investment. The emirate’s strategic initiatives and world-class amenities appeal to international talent and individuals seeking a high quality of life and investment opportunities.
Also, government efforts to diversify the economy and smoothen business practices create a favorable environment for real estate growth. So, despite the concerns about rising standards of living and costs, the opportunities for development in Dubai’s real estate sector are strong, supported by the city’s vision to keep its global appeal.
Last year alone, DAMAC proudly launched more than 35 projects across our portfolio and segments. This indicates a strong demand for real estate, and we don’t see it receding anytime soon.
What is your forecast for the Dubai real estate market in 2025? Which factors will influence the market’s performance?
By 2025, I anticipate the Dubai real estate market to continue its upward trajectory, influenced by several critical factors: interest rate adjustments, global economic shifts, and Dubai’s increasing status as a safe haven amid global geopolitical uncertainties.
Additionally, Dubai’s appeal as a luxurious and secure destination will continue to attract international investors, further driving the market’s growth. We see growth in the high-end residential and integrated community sectors, driven by increasing international investment and domestic demand for high-quality, lifestyle-oriented properties.
Moreover, as the city progresses toward the targets set by Dubai Plan 2033, we expect significant yearly advancements towards doubling the real estate sector’s contribution to economic diversification. Several market trends, such as accessibility, sustainability, inclusivity, and adaptability, are moving us closer to the AED1 trillion transaction target set for 2033, highlighting the sector’s dynamic growth and strategic importance to Dubai’s economy.
DAMAC has been in the data centers business for three years now. What prompted DAMAC’s decision to expand into this business?
Our decision to enter the data center business was driven by the global digital transformation and the emerging demand for secure and reliable data storage solutions. Recognizing the potential to cater to this growing need, we leveraged our expertise in property development to provide state-of-the-art data center facilities.
In addition, as a business, DAMAC places a high priority on diversification, understanding its importance amid global uncertainties. Beyond real estate, we have ventured into hospitality, data centers, retail, and fashion across various regions and geographies.
Read more: DAMAC reveals new nature-centric community, DAMAC Sun City in Dubai
You recently expanded into Spain with a EUR400 million investment, and you are also investing $1 billion in Thailand. How does the data centers business align with DAMAC’s overall strategy?
Our recent investments in Spain and Thailand highlight our strategic approach to diversification and global expansion. The data center business complements our core real estate activities by meeting the digital infrastructure needs of today and tomorrow.
As for our plans in the GCC, we currently have two data centers under construction in Dammam and Riyadh that will deliver 55MW by 2025. We aim to build more facilities in Saudi Arabia and invest $600 million to expand its data centers in the kingdom. Furthermore, we have plans to build a $100 million data center in Türkiye in a joint venture with British telecom giant Vodafone and a data center in Amman, Jordan, signing a long-term agreement with the King Hussein Business Park.
Have you observed any changes in buying patterns in the Dubai real estate market since central banks began lowering interest rates?
Indeed, the easing of monetary policies by central banks globally — including a significant 50 basis point reduction by the UAE central bank in September — has injected new vitality into the Dubai real estate market. This easing has increased liquidity, making financing more accessible and affordable.
According to a recent report, this enhanced liquidity is reflected in the record-breaking real estate transactions we have witnessed since September.
How do you expect interest rate reductions to impact the market’s demand and pricing?
The reduction in interest rates is expected to significantly boost demand in the Dubai real estate market, particularly as investors seek higher yields outside traditional bank deposits. This influx of investment into the broader economy is likely to drive up property prices, especially in the luxury segment, as more capital flows into real estate.
For more interviews, click here.
