Damac secures financing for London development

Financing was provided by a group of international, regional and UAE lenders

Damac Properties is expected to continue reporting disappointing numbers for the rest of the year as well as in 2020 . Antonie Robertson / The National

Dubai-listed developer Damac Properties, whose chairman is a business partner of US President Donald Trump, secured a £175 million (Dh840.74m) financing package for its first London project.

The financing is being provided by a group of lenders and matches a significant equity contribution by the company, Damac said in a statement, without specifying how much the Dubai-headquartered developer has allocated for the residential tower.

UK’s Barclays Bank, Kuwait’s Burgan Bank and Emirates NBD, Dubai’s biggest bank by assets, provided the financing package for Damac Tower at Nine Elms in the British capital, the company’s first foray outside the broader Middle East.

“In a vote of confidence in the UK and Damac’s track record, we have secured significant support to complete our distinctive residential development in London,” said Hussain Sajwani, chairman of Damac.

The project “has encouraged us to seek the next investment opportunity in London, which we are currently engaged in detailed discussion to secure”, he said.

Damac Tower will be the first in Europe to be designed in partnership with Italian fashion house, Versace Home. The 50-storey project being developed by Nine Elms Property, a wholly owned subsidiary of Damac International, will comprise studios, one, two and three-bedroom apartments.

Damac is facing increasing pressure in its home market amid oversupply concerns and is looking to markets beyond the UAE for growth. The developer posted a 58 per cent drop in full-year 2018 profit, missing analysts' estimates as revenues dropped.

Net profit slumped to Dh1.15bn, the company reported in February, without giving a reason for the decline in a bourse filing to the Dubai Financial Market, where its shares are traded. Its full-year earnings were the lowest since Damac shares started trading in 2013, missing the lowest profit projection of analysts polled by Bloomberg. The company has yet to report its first quarter net income.