The founder and chairman of DAMAC Properties, Hussain Sajwani graduated from the University of Washington after starting from humble beginnings. Today, DAMAC Properties develops real estate across the globe, with a portfolio of over 40,000 units. DAMAC specializes in luxury real estate and has prestigious properties in cities such as Dubai, London, Abu Dhabi, and Riyadh. Hussain Sajwani is now a well-known and highly regarded figure in Dubai as well as internationally. The DAMAC owner recently sat down with CNBC for an interview at the World Economic Forum.
CNBC: How do you see the challenges in the coming year, given the unrest in China and Washington. What are your fears?
Hussain Sajwani: Well, a lot of the analysts fear that the 10 years of growth we have seen is coming to an end. And I do agree with them. However, it is not such a bad thing, it is just life, which comes and goes in cycles. And we may not even enter a recession, it could be more similar to a slowdown. If company owners manage their cash flow and overheads, then they should see it through.
CNBC: Walk us through what is happening at DAMAC Properties. A lot of people are worrying that Dubai is overbuilding again. What are your thoughts?
Hussain Sajwani: See, we have had a good 5 years of growth. And in 2018 it can be observed that this growth slowed down and prices dropped. 2019 and 2020 are not going to be easy years. From a price perspective, we are at the bottom, but it will take at least two years to absorb the supply. We have an amazing leader who is very resilient and the Dubai infrastructure is very strong, in an excellent position for long-term growth. In a free market economy, the people are going to overbuild and then play catch up to find balance. But our leader is very openminded and does not like imposing strict regulations on the market. There is no manipulation of the economy as supply and demand are managed through natural market conditions.
CNBC: Where do you see opportunities for economic growth?
Hussain Sajwani: As a company, we have done very well the past 5 years. We are probably going to see a slight decrease in 2019 and 2020. But we are waiting for opportunities to buy in Britain. We are waiting for the opportunity and believe this will happen after Brexit. We surveyed a lot of markets and we like London. We have a 50 story tower that should be finished next year. We are looking at all kinds of property in London, where we are going to invest heavily. We are not just looking at luxury apartments, which are our specialty, but also at offices and retail outlets,
CNBC: What about other markets?
Hussain Sajwani: We have also been looking along the East coast of the USA as well as Canada. We have cities in particular where we are hoping to expand. These cities are New York, Miami, Boston, and Toronto. Along with London, these are the 5 cities where we are targeting for growth. We are interested in these areas.
CNBC: The China/US trade war has been causing considerable controversy. Many are saying that President Trump is getting it wrong. What are your thoughts on the matter?
Hussain Sajwani: I am very much in favor of free trade. But every country is going to look at its own interests. As a group of people, it is very important to respect the interests of other groups. The large trade deficit between China and the US cannot be ignored. As the head of the state, President Trump has to protect its interests. I know President Trump personally and he is an extremely strong negotiator and a brilliant deal maker. Of course, China is a formidable force and will not be pushed around either. I have been in talks with many developers and investors, and the real estate market in China is very closed off. We don’t really see where we fit there, with the language and the culture and the markets. The property market is politically controlled with the government heavily involved in the land. Investors need to be politically connected. If we ever invest in China, it will most likely go no further than the purchase of stocks in the public market.
CNBC: Last question. What will be the biggest difficulties in 2019 for the global property market?
Hussain Sajwani: Every city will face its own unique challenges. London will have Brexit to contend with. But again, many cities will do well. Toronto will continue to experience growth over the coming years, even though the prices are high. Germany’s three main cities (Berlin, Frankfurt, Munich) are doing well. The problem with these cities is that the prices are just not affordable right now.
CNBC: Thank you for joining us.
Hussain Sajwani: Thank you. It was a pleasure.