Damac hoping to tempt buyers into doubling up with two-flat deals

The Dubai property developer known for enticing investors with the promise of free yachts, speed boats or jet skis when they buy a luxury flat is hoping to attract buyers with the offer of cheap deals for people buying two flats.

This summer Damac said it was offering buyers the chance to buy two apartments in developments in Business Bay, the Burj area, Dubai Marina, Dubai World Central and Dubailand, at prices starting from Dh 1.4 million.

The company, which is known for its glitzy advertisements on Dubai billboards, said that the offer included units in two different locations for schemes including its Naia hotel apartments in Jebel Ali, homes at its Akoya golf course project in Dubailand, hotel apartments at its Paramount Hotel project at Jumeirah Waterfront at Maritime City and its project at Dubai World Central.

“Damac Properties is well known for bringing fresh and exciting offers to the market during the summer promotions in Dubai,” said Niall McLoughlin, the senior vice president at Damac Properties. “We have a wide array of units in prime locations all across the city and are in a unique position to present investors with a package of units at a very attractive price point.”

Damac did not say exactly which of the properties would be included in the Dh1.4m deal.

With the luxurious penthouse at Damac’s recently completed Damac Maison block of hotel apartments on the market for Dh14.8m, the offer could seem tempting.

However, Damac launched sales at its Tenora hotel apartment project in Dubai World Central last December with prices starting at Dh610,000.

This promotion is not the first time Damac has offered extravagant perks to property buyers.

In 2012 the developer offered anyone buying a Damac property a Sea-Doo jet ski, a Monterey cruiser or an Azimut yacht, In 2005, the developer threw in Audi and Porsche cars with apartments purchased in one of 13 upscale developments.

“To anyone tempted by this offer I’d advise them to be a little sceptical,” said one Dubai estate agent who asked not to be named. “Developers are not stupid and run these sorts of offers to make money. I’d be surprised if any of these apartments are really being sold at a significant discount.”

lbarnard@thenational.ae

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Damac hoping to tempt buyers into doubling up with two-flat deals

Damac is offering buyers this summer the chance to buy two apartments in developments in Business Bay, the Burj area, Dubai Marina, Dubai World Central and Dubailand, at prices starting from Dh1.4 million.

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