Dubai's property market is 'performing perfectly' - Danube Properties director
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Dubai’s property market is ‘performing perfectly’ – Danube Properties director

Dubai’s property market is ‘performing perfectly’ – Danube Properties director

In an exclusive interview, Atif Rahman shares his strategy in spearheading the growth of Danube Properties, and why remains bullish about Dubai


It is a Saturday afternoon, but Danube Properties’ headquarters in Dubai is packed. Following the developer’s recent launch of its Wavez project, a mixed-use development in Liwan – which includes 412 apartments – potential investors have been streaming in.

Overseeing the bustling action is Atif Rahman, director and partner of the company. Despite being in the office until 3am that morning to tackle a sudden crisis, Rahman is back in business in the early afternoon to a stacked agenda.

Looking dapper and brisk, Rahman admits that one of the aspects he enjoys the most about his high-pressure job is handling the challenges that come along. The second aspect, he reveals, is seeking out the opportunities that exist in the market.

Arguably, he has done a stellar job in finding those opportunities.

Danube Properties was launched by him in 2014 as an arm of the wider Danube Group, an established player in the UAE’s building materials industry. Targeting the untapped affordable housing market, the company rapidly grew its portfolio to reach 14 projects with more than 5,500 units – of which some are completed, and the remaining are currently in various stages of completion. The six completed projects alone have a total value of over Dhs1.6bn. In 2018, Danube Properties sold more than 1,860 units for Dhs978m, capturing 10.60 per cent of the market share by volume.

It’s all about offering the “right product at the right price” says Rahman.

“For us, planning a project alone can take anything from two-three months to one year. Unless it is well-planned, well-designed and every element of the project has reached a level of perfection, I don’t launch the project,” he explains.

“We spend a lot of time in the planning, on the drawing board. We try to give it the required time to ensure that every corner of the project has been looked at very carefully and we have done justice in terms of design. I don’t promote the idea of rushing the project design so that delivery of maximum value for the consumer remains guaranteed.

“But once we have launched the project, we generally go at rocket speed. More or less at the same time as the launch, we start mobilising at the site and concluding all the drawing and final approvals, appointing our enabling contractors in case we are going beneath the ground, and also start preparing the tender documents for the main contractor. “I believe for any project to be successful efficient planning is of paramount importance. This adds to the speed and momentum for completing the project construction,” he says.


The issue of oversupply has become ubiquitous in any discussion of Dubai’s residential property market in the last few years. Despite witnessing a sluggish performance, the market is seeing a steady supply of new units.

A recent report by online platform Property Finder found a total of 20,978 residential units were completed in the first half of 2019 alone. As of July 2019, there are an additional 38,426 residential units within 152 projects that have at least an 85 per cent completion status and are scheduled to be completed by the end of the year, the report found. It did add “not all projects will achieve completion this year, going by previous materialisation rates”.

“I think this [oversupply in Dubai] has been the favourite topic of discussion for the last 15 to 20 years. But whatever was built has been reasonably consumed,” argues Rahman.

While he admits that the market could be facing an oversupply situation at present, he says it’s only a temporary phenomenon.

“[Oversupply] does not mean that the market is finished. Yes, there is temporary oversupply in Dubai, which will get consumed because the government has liberalised the immigration rules, they have made it extremely attractive for investors, and the trade platform has also been opened up further. So you do expect more people to come into the city. It would be unwise to first invite people to come here and then start building the real estate. So, it is perfectly fine that we have temporary oversupply in the market,” he elaborates.

“I would say let’s keep calm and enjoy the price advantage oversupply is offering while it lasts. I don’t think it is going to last very long.

“Also, at times, we tend to feel threatened with oversupply by virtue of how many projects have been announced. But it should always be linked to how many projects are being delivered – that is very important,” he adds.


Looking wider at Dubai’s residential property market, prices have continued to fall, according to market reports.

Average apartment prices declined 15.1 per cent and villa/townhouse prices declined by 14.7 per cent in the second quarter of this year compared to Q2 2018, a recent report by property consultancy Cavendish Maxwell found. Another report by ValuStrat found that residential property prices in Dubai were down 27.1 per cent at the end of the first quarter compared to the peaks seen in mid-2014.

Dubai property market will see upturn in 2017- KPMG

Meanwhile global ratings agency S&P forecast earlier this year that residential property prices will decline further this year. “Given the continued gap between supply and demand, in our base case we expect prices to fall a further 5 to 10 per cent in 2019 before a gradual stabilisation in 2020, though without a meaningful recovery in 2021. In our stress case, we project a more pronounced decline in prices, with the market only stabilising in 2021,” said S&P Global Ratings credit analyst Sapna Jagtiani.

However, Rahman contends that these kind of “post-mortem” reports needlessly project a sense of gloom in the market.

“When you talk about capital appreciation, it is absolutely amateurish to read the prices over a period of two or three years. For rating any real estate market, you should take a period of between seven to 10 years to get the real performance. If you’re looking at the last one or two years, obviously there will be ups and downs and some correction and improvement. That does not mean that the market is in a slump; it’s a natural outcome. It’s an organic cycle that any market has to go through,” he asserts.

“Looking at the Dubai market over a time-frame period of 10 years, it is performing perfectly and there is nothing to worry about. I think the current performance, if you look at the ROI, we’re looking at between 6-7 per cent. That’s not bad at all,” he says, adding however that the market would “need to come out with more innovative products and cater to the real end users”.

Rahman also insists that the property market has been plagued by “over-expectations”.

“Dubai is one of the finest real estate markets across the world. Whether you look at the regulatory system, the infrastructure or at the overall control measures that have been put in place by the governing authority, it is absolutely fabulous,” he says.

Recent measures taken by the government, including offering longer-term ‘gold card’ residency visas for investors and entrepreneurs as well as visas for retired expatriates in the UAE will also support Dubai’s property market in the long run.

“What these reforms mean is that more people would want to stay back in Dubai, because I think Dubai is addictive – it’s difficult to adjust in any other city once you have lived here. It has just the right balance of everything – from lifestyle to security, infrastructure to convenience. It’s a perfect job location and offers a cohesive and peaceful environment. Hence, given a chance, I think more and more people would want to call Dubai their home forever.

“My personal view is that even if the permanent residency was not there, none of us were leaving Dubai. But yes, now it will give more confidence to all the residents for future investments in Dubai. At the same time, it is going to attract many investors from overseas who will want to relocate themselves in our wonderful city Dubai,” he adds.


While Rahman remains bullish about the market, he says there are two factors that will provide a tremendous boost to it.

“The two challenges currently faced by the industry are – participation from the banking sector and the cost of living. If we are able to address these two matters, I think it will help the Dubai real estate market and the overall economy,” he says.

“We need to get banks to participate when the market needs liquidity and that’s what I think can bring a big change. A little bit of liberation from the central bank on real estate financing would definitely act as a catalyst in revamping and reviving the market. More than liquidity, it’s also a matter of confidence for the industry – especially the overseas spectators.”

In terms of cost of living, bringing down the rates in the three key areas of house rents, school fees and healthcare will make a huge difference, Rahman opines.

“The quality of education and healthcare is among one of the best worldwide while further improvement will only boost both the sectors. But the cost is a huge concern. If these issues are addressed, the cost of living would definitely come down, making it more attractive to live in Dubai,” he states.


Talking about reducing the cost of living, the question of affordability comes up. The use of the term ‘affordable housing’ has been fairly skewed in the Dubai property market context, with inconsistency in its usage.

Rahman agrees that affordability is the one of the most “misunderstood terms” in the market, with several definitions doing the rounds as per every developer’s convenience. Coming from a construction background, he says it’s key to understand the process that goes behind creating an affordable product.

danube atif rahman

“There’s a big difference between being affordable and cheap – affordable is not cheap. Let’s look at affordability in a detailed manner. To make the project affordable, you need to buy the right piece of land at the right price, because the cost of land is one of the major outlays towards any project cost and hence impacts the buying price of the real estate.

“You need to buy the land with the optimum DCR (development control regulation) so that you are able to make not just an attractive – but also a cost-effective – project on top of that land. Followed by that, value engineering contributes handsomely in bringing the cost down – which apart from structure and MEP also extends to architecture and space planning. When one looks at the overall design element of the property, the structure, finishes – they all offer huge opportunities for cost savings. If done right, cost can be managed without comprising on the quality and attractiveness of any project.

“Another factor is that you need to understand your optimum volume, as this will help create economies of scale – you’ll have overheads, your suppliers, your subcontractors and contractors. If you are able to achieve the right volume, it will help you negotiate and achieve the right price.

“Once you are able to address these points, I think generally, you are able to cut down on the cost and hence that impacts the price and makes it more attractive for the consumers. Of course, going forward after you’ve launched a project, the selection of the contractors, the negotiation, and managing the process of construction is also very important. It’s a multi-layered industry and you need to be cost-conscious at every given point of time,” he explains.

“It’s a long, drawn-out process rather than a word thrown in,” he adds.

Danube’s projects currently offer units priced from an average of Dhs300,000 to Dhs350,000 for a studio. The monthly payments average around Dhs3,000 to Dhs3,500.

“So, I think anyone who’s earning between Dhs12,000 and Dhs14,000, with a little bit of saving, would be able to afford a property with Danube Properties. But we are also continuously working on bringing down the cost to make it more affordable for a wider range of the population. There are challenges that you need to address – whether it’s the land or the construction cost,” says Rahman.

“We have been able to bring down the cost of construction since we started, and our volume has also increased – so we are able to construct at 15 to 20 per cent cheaper than what we were able to do five years ago.

“It’s a simple rule – when you look at the overall cost of construction of a vertical project, it will account for 40 to 50 per cent of your overall project value. So, if I’m able to bring down the cost of construction by 10 per cent, I’m lowering the property price by 4-5 per cent,” he explains.


While several real estate developers in Dubai have posted huge profit drops this year, Rahman anticipates that Danube Properties will once again post healthy growth this year – in line with previous years.

One part of it is maintaining a lean business operation. “I have just the optimum number of staff in every department. I don’t have anyone who’s working below 90 per cent occupancy at any point of time. The more difficult part is the cost of construction which is impacted by so many factors. We are constantly putting efforts to keep in control the build cost and making it more efficient,” explains Rahman.

But he insists the main driver for the company’s steady growth is its focus on enhancing consumer benefit. Rahman has clarified to his team that “consumer benefit has to be the ultimate goal for the company” and it must be clearly stated in every objective of the business.

“We have been one of the very few companies which has consistently grown year-on-year, whether the market has been up or down. When you look at any business, it’s very important to remain consumer-focused and consumer-sensitive. This must be achieved in every aspect of operation – it’s not just about the price, but also on the delivery and what kind of experience you are creating for the consumers.

“We’ve always tried to please our customers with the products and the services that we are offering. And I think once any business is able to achieve that, more often than not, you would be able to maintain a sustainable growth. That’s because ultimately, it’s all about the consumer.”

Even when the market is sluggish, there is money that needs to be invested, the realtor says. “The money’s still there, there are people who are willing to buy, but they want to buy the right product at the right price from the right company. That is what we need to understand. For any business to survive, sustain and grow during the slow period, you need to be extremely consumer-sensitive, and you need to identify which market segments you’re going to deal with, understand what they want and plan how you can deliver that in-line with their expectations.”


Danube Properties has three projects equaling around Dhs1bn worth of inventory that it expects to deliver this year. While its recent launch of Wavez – which includes two 10-storey buildings and a shopping mall – underlines its growing presence in Dubai, the company is also mulling options outside its headquarters.

“While Dubai will always remain our primary real estate market, we have been studying a few other markets to sustain the growth and have a wider spread. There are a few things which are shaping up beautifully right now, but it is not something that we have finalised as yet,” Rahman says.

He remains tightlipped about the plans, but the company is eyeing different markets.

“Saudi Arabia is a brilliant market, it’s got domestic consumers, which is a big strength, and I also believe it’s shaping up very nicely. I’ve had a couple of meetings with the ministry of housing over there and things seem to be moving in the right direction, but I would say it still needs a couple of years to stabilise and become an attractive market,” he says.

But with Dubai set to host Expo 2020 next year, the opportunities in the emirate are set to abound in the years to come, Rahman asserts. The six-month long event, being held for the first time in the MENASA region, runs from October 2020 until April 2021 and is estimated to attract 25 million visits.

“It’s a historic event and I personally believe it’s going to change the future for Dubai. Expo is not an Olympic or football event where people will come, watch it, and go back. It is a trade show where people from all the participating nations would come into Dubai and they would look at the opportunities that exist in the emirate and across the entire Middle East,” says Rahman.

“I’ve seen the Shanghai and the Milan expos, and all I can say is that the Dubai Expo is way beyond those events – it’s going to set a new benchmark. “So, it is the right time to invest in real estate in Dubai, because after the event, you will see a surge in demand leading to an appreciation in prices.”


When asked what he envisions for the future, Rahman is loath to give any five or 10-year predictions. But he remains clear on what he hopes the company will achieve.

“I would say we are definitely 9/10 in terms of consumer satisfaction, but I want to be a perfect 10 and sustain that benchmark. That would be our ultimate goal to achieve. I don’t think anyone can forecast what you will achieve as a business in terms of the top line or the bottom line or the volume of business that people are able to do as there are many factors that govern that.

“But the number one aspect is how satisfied all our customers are. I am a firm believer that if you look after your consumers, they will look after you and the business will continue to grow,” Rahman says.

Having a solid team that supports this philosophy is also key, he states, adding he has “the best set of people” working with him. His approach to business is a two-pronged one. “We need to be satisfied in life with what we have. But you should never be satisfied with your efforts. The day you become satisfied with your efforts, I think it ends the growth and improvement process.

“The other thing that I have always reinforced in our company is that we are not result-oriented, but instead remain focused on the process. The result is not in the control of anyone, so we try to perfect our process of operating the business. Because if the process is right, nine or 10 times out of 10, the result is right,” Rahman says.

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