Dubai Billionaire Developer Says He’s Shocked by Property Rebound

(Bloomberg) --

Barely a year after predicting Dubai’s real estate sector was facing a disaster from oversupply, the billionaire head of one of the city’s largest developers said a “surprising” rebound will extend into 2022. 

“I was totally wrong,” Damac Properties PJSC Chairman Hussain Sajwani said in a Bloomberg TV interview, “I was very surprised and shocked to see how things changed.”Next year will be as good as 2021, if not better, as a lot of people moved to the emirate during the pandemic, he said.

Coronavirus cases in the United Arab Emirates have been falling sharply amid a fast vaccination drive. Dubai, unlike other major financial hubs, has shunned lockdowns since emerging from one last year. Sajwani said that has made the city an attractive destination.

The comments mark a turnaround from last year, when Sajwani warned chronic oversupply could spell trouble for Dubai’s lenders. While the supply glut did drive down prices sharply, things have started to look up recently --  average home prices have risen at the fastest pace since 2015 and transaction volumes surged 77% in August on an annual basis, according to real estate adviser CBRE Group.

Overseas Investments

Sajwani, who earlier this year made an offer to take his company private, said he may look to make investments overseas after the deal closes.

“We avoided overseas investments as a public company because minority shareholders don’t want to take risks with their money so maybe this appetite will increase,” he said.  

Sajwani’s offer for Damac was at a steep discount to the company’s local listing in 2015, triggering a regulatory review and backlash from minority investors. He ended up increasing his bid by about 8%.

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