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Interviews

Making Miraclz

Danube Properties launched its 7th project just as it put the finishing touches to its first. Jason O’Connell spoke to chairman and founder Rizwan Sajan.

Rizwan Sajan will probably reflect on 2016 as being the year things began to take off for Danube Properties. The company’s founder and chairman unveiled his seventh property development in Dubai last month just as contractors were putting the finishing touches to the first project he launched in June 2014.

Danube’s short journey as a developer has taken it from villas in the burgeoning neighbourhood of Al Furjan via low rise apartment buildings in Studio City to its first high rise tower in Arjaan next to Miracle Garden.

But it is this year that business has really accelerated. The company started 2016 with a bang, launching Starz by Danube followed by the Glamz residence, both of which sold out in record time. So far this year it has sold over 1,000 units, awarded construction contracts worth AED 501mn ($136mn) to two contractors while signing three enabling contracts worth over AED 21mn. Its latest project – the AED 400mn Miraclz by Danube – takes the aggregate value of its portfolio to AED 2.2bn at the turn of the year.

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Sajan’s philosophy is to proceed cautiously with his developments, selling each one completely before launching a new project to avoid overstretching himself. But such has been the demand for his “affordable luxury” offering that Danube usually sells out within four to eight weeks, allowing him to launch a new property every two to three months.

His latest project, however, took a little longer than expected. “It took us almost five months to come out with this new project – whereas normally we try to launch a new project every two or three months and people are wondering why it took longer,” Sajan says. “When we sold the last project and started scouting for a new plot we realised that prices has gone up. People say the market is down but we saw prices had gone up and we were not able to find the right priced plot, so it took a little longer.”

When Danube announced its first project in Al Furjan last year it paid in the range of AED 120 per sq ft. Today, Sajan says, a similar plot in the same area is around AED 140/150 per sq ft indicating that demand is on the up. Perhaps that explains why he decided to turn his attention to another emerging neighbourhood: Arjaan.

Sajan says Arjaan fits a similar profile to the other areas it has targeted, being an up and coming neighbourhood with essential infrastructure already in place. The company has bounced back with its tallest project to date. Miraclz is a 36-storey tower with 591 apartments ranging from studios to two bedrooms. Though it is bigger in scope than its previous developments, Sajan says the formula remains very much the same. “Charge the customer the price of Discovery Gardens and give them the quality of a Marina or Downtown apartment,” he says.

Units in Miraclz will be of similar size to its previous projects while customers will pay more or less the same at approximately AED 1,000 per sq ft. Studios start at AED 450,000 while two bedroom apartments cost in the region of AED 1.25mn. Being a bigger development, Miraclz is equipped with a broader offering of facilities and amenities and residents can access a 1,250 sq ft health club at the podium level while there will be eight retail units on the ground floor.

As with previous developments, apartments will be fully furnished with furniture supplied and designed by Danube Home. One of Danube’s big advantages as a developer is that the company is also one of the largest suppliers of building materials in the UAE as well as having its’ owns furnishings division, allowing it to deliver projects at lower cost than its competitors.

Construction advances

Aside from being taller, Miraclz also differs from previous Danube projects in that the company began construction before they started selling off plan. Atlas Contracting will carry out earthworks as it has done for all previous projects.

“Why change a winning formula?” says Sajan. “Atlas has done well completing jobs on time and with dewatering which is very important.” The company has also used the same interior designer for all its projects. Danube expects to award the main construction contract for Miraclz in another two to three months.

United Engineering Construction (UNEC) was selected to build the 171 villas that make up Danube’s first development – Dreamz in Al Furjan – and broke ground on the project in February 2015. The AED 500mn project is in the final stages of construction and the first units should be handed over around the turn of the year.

Danube then turned to Naresco General Contracting in August 2015 for its second project – Glitz 1 and 2 – in Studio City. The AED 300mn development consists of two, 8 storey towers with a combined total of 300 apartment units ranging from studios to three bedrooms. Construction is complete and the first units due to be delivered ahead of schedule early next year.

Naresco followed up in April this year with the AED 185mn ($50.36mn) main contract for the adjacent Glitz 3 development which has 350 units. Danube says preparation for casting the third floor is underway and construction is also three to four months ahead of schedule.

Danube returned to Al Furjan to launch its fourth project, Starz, in December 2015. The AED 300mn project comprises 452 units from studios to two bedroom apartments in two, 17 floor towers sharing a podium. Enabling works are coming to completion and another 20,000 m3 of earth needs to be excavated while there is a significant amount of dewatering taking place. Bin Shafar Contracting was announced as the main contractor in November and will also reportedly build the sixth project on an adjacent plot in Al Furjan. Danube announced the AED 300mn, 418-unit Glamz project in May.

So what’s next for the emerging developer? “After this we’ll come out with another project every three to four months,” says Sajan. “We’re looking for another plot in Arjaan to launch in Q1 2017, as soon as we sell Miraclz.”

Property prices in Dubai have generally stagnated over the past two years, though the higher end of the market has been hardest hit. The fact that more and more people are looking to stay in the city for the long term and want to get on the property ladder rather than rent, appears to bode well for the more affordable end of the market and Danube is just one of a number of developers that have moved to exploit rising demand. But can investors expect property prices to rise again anytime soon? “They have to,” says Sajan. “I’m just surprised they haven’t already. Because plot prices have gone up so eventually this will reflect in property prices. We’re approaching Expo 2020 and I’m sure there will be a surge in prices.”

 

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