Dubai’s real estate sector is thriving, supported by a strong regulatory framework and a consistent stream of new projects attracting both local and international investors. With global central banks reducing interest rates, financing has become more accessible, resulting in a surge of real estate transactions.
Hussain Sajwani, founder of DAMAC Group, expects 2024 to be another record-breaking year for Dubai. As a leading property developer, DAMAC boasts an impressive portfolio of luxury real estate developments and has recently expanded into the data centre industry. In this interview, Sajwani shares his insights into Dubai’s real estate market, DAMAC’s upcoming projects, and the company’s diversification strategy.
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, demonstrated by record-breaking transactions this year,” says Sajwani.
In September alone, the market witnessed over 18,000 transactions, with a significant proportion involving off-plan properties. This reflects strong investor confidence and a robust appetite for new developments.
The luxury segment, in particular, is experiencing rapid growth. Sajwani attributes this to key factors such as the UAE’s forward-thinking policies and a highly favourable market environment.
“One clear indicator is the surge in villa sales, driven by a growing demand for upscale, spacious living options. Post-pandemic, people are prioritising community living, wellness, and intimacy. They are seeking environments that offer luxury alongside opportunities for socialisation,” he explains.
DAMAC has responded to this trend by enhancing its community-focused developments, including DAMAC Lagoons and Riverside. Sajwani also revealed plans for a major new launch in November to address this evolving demand.
What are the challenges and opportunities facing the market in the coming years?
While Dubai’s real estate sector is flourishing, challenges such as rising living costs and property prices remain. However, Sajwani sees these as opportunities rather than obstacles.
“Dubai’s continuous infrastructure improvements and its status as a global business hub attract significant foreign investment. The city’s strategic initiatives and world-class amenities continue to appeal to international talent and investors.”
Additionally, government efforts to diversify the economy and streamline business operations create a strong foundation for real estate growth. Sajwani believes these measures will ensure the market’s resilience, even as living standards and costs rise.
DAMAC is playing its part by launching over 35 projects across various segments in the past year, demonstrating the enduring demand for real estate in Dubai.
What is your forecast for the Dubai real estate market in 2025? Which factors will influence the market’s performance?
Sajwani anticipates that Dubai’s real estate market will continue its upward trajectory in 2025, driven by several critical factors: adjustments in interest rates, global economic trends, and Dubai’s reputation as a secure, luxurious destination amid geopolitical uncertainties.
“We expect growth in high-end residential and integrated community projects,” he says. “This will be fuelled by both international investment and domestic demand for high-quality, lifestyle-oriented properties.”
As Dubai progresses towards the goals outlined in Dubai Plan 2033, Sajwani predicts significant yearly advancements in the sector’s contribution to economic diversification. The AED 1 trillion transaction target highlights the strategic importance of real estate to Dubai’s economy.
DAMAC has been in the data centres business for three years now. What prompted DAMAC’s decision to expand into this business?
“Our decision to enter the data centre business stems from the global digital transformation and the growing demand for secure, reliable data storage solutions,” Sajwani explains.
Leveraging its expertise in property development, DAMAC has built state-of-the-art data centres to address these needs. Diversification is also a key part of the company’s strategy, with ventures in hospitality, retail, and fashion alongside real estate.
You recently expanded into Spain with a €400 million investment, and you are also investing $1 billion in Thailand. How does the data centres business align with DAMAC’s overall strategy?
Sajwani views DAMAC’s recent international investments as part of a broader strategy to diversify and expand globally.
“The data centre business complements our core real estate activities by meeting the digital infrastructure needs of today and tomorrow,” he says.
In the GCC, DAMAC is constructing data centres in Dammam and Riyadh, which will provide 55 MW by 2025. The company is also planning a $100 million facility in Turkey in collaboration with Vodafone, as well as a new data centre in Amman, Jordan, under 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?
“Yes, the easing of monetary policies globally, including a 50 basis point reduction by the UAE Central Bank in September, has reinvigorated the Dubai real estate market,” Sajwani notes.
Increased liquidity has made financing more accessible, which is reflected in the record-breaking transactions seen in recent months.
How do you expect interest rate reductions to impact the market’s demand and pricing?
Sajwani expects reduced interest rates to boost demand further, particularly as investors seek higher returns compared to traditional savings.
“This influx of investment is likely to drive up property prices, especially in the luxury segment, as more capital flows into the real estate market,” he explains.
Original article reference: Middle East Economy.
