Gulf cash for Belgrade waterfront development

Updated 28 June 2014
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Gulf cash for Belgrade waterfront development

BELGRADE: Serbia has unveiled plans to redevelop the Belgrade waterfront, aiming to make the capital a tourism and business hub, in a controversial 3 billion euro scheme that will be funded by Gulf cash.
The Belgrade Waterfront project promises office and luxury apartment blocks, eight hotels, a shopping mall and a tower resembling Dubai’s landmark Burj Khalifa, albeit a quarter of the size at 200 meters, on the right bank of the Sava River.
It is the signature project of Prime Minister Aleksandar Vucic’s government, which has pledged to create jobs and growth and turn Belgrade into a business hub for the Western Balkans. But it has also drawn criticism from architects, economists and corruption watchdogs, who have raised concerns over its design, cost and transparency.
“It (the project) will make Belgrade a regional center and it will attract many tourists,” Vucic said at a press conference held at Geozavod, a renovated 1907 building that dominates the area and will house the Belgrade Waterfront Gallery.
The proposed area for development, Savamala, houses grand, century-old buildings that have become derelict, though the area has started to re-emerge as a cultural hub. Unlike some parts of Belgrade, the area escaped damage by NATO bombing during the Kosovo conflict in 1999 but the right bank of the Sava is blighted by a seedy central railway station and bus terminus.
The project is to be co-financed and led by Dubai-based construction company Eagle Hills, although Eagle Hills and the Serbian government have yet to form a joint venture and define a co-financing model. Eagle Hills has agreed to put up the 3 billion euro ($4.08 billion) cost of the scheme but the terms have not been settled and it is unclear how much the Serbia government will contribute in funds.
It is the latest sign of increasingly cosy economic ties between the United Arab Emirates and Serbia under Vucic, a former ultranationalist who has rebranded himself as a pro-European reformer.
In March, while Vucic was deputy premier, Serbia secured a $1 billion, 10-year loan from the United Arab Emirates to prop up its budget. Last year, Abu Dhabi’s Etihad Airways bought a minority stake and gained managerial rights in troubled Serbian flag carrier JAT Airways.
Critics have pointed to the absence of public tenders for the project.
Others question the economic wisdom and viability of the project in a country under pressure to cap its deficit and public debt, which stand at 7 percent and 63 percent of gross domestic product respectively.
On top of building costs, the government will also have to compensate residents who will be relocated.
With unemployment running at 20 percent and the average net wage in Serbia just 380 euros a month, the project appears unnecessarily lavish to many members of the public, who say the government should be building roads and hospitals instead.
Developing the waterfront has been talked about by city officials since the 1970s, but successive governments have never managed to find the funds to finance it.
While that problem appears to have been solved, some economists now question whether there is enough demand for the amount of upscale office space or luxury flats envisaged in the project.


Dubai property developer Damac on hunt for land in Saudi Arabia

Hussain Sajwani
Updated 18 March 2019
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Dubai property developer Damac on hunt for land in Saudi Arabia

  • Brexit a “concern” for UK property market says Sajwani
  • Developer mulls investing “up to £500 million” on London project

LONDON: The Dubai-listed developer Damac says it is scouting for additional plots of land in Saudi Arabia, both in established cities and the Kingdom’s emerging giga-projects such as Neom.
Hussain Sajwani, chairman of Damac Properties, also said the company would look to invest up to £500 million ($660 million) on a second development in the UK, and that it is on track to deliver a record 7,000 or more units this year.
Amid a slowing property market in Dubai, Damac’s base, the developer is eying Saudi Arabia as a potential ground for expansion for its high-spec residential projects.
Damac has one development in Jeddah, and a twin-tower project in Riyadh — and Sajwani said it is looking for additional plots in the Kingdom.
“It’s a big market. It is changing, it is opening up, so we see a potential there … We are looking,” he said.
“In the Middle East, Saudi Arabia is the biggest economy … They have some very ambitious projects, like the Neom city and other large projects. We’re watching those and studying them very carefully.”
The $500 billion Neom project, which was announced in 2017, is set to be a huge economic zone with residential, commercial and tourist facilities on the Red Sea coast.
Sajwani said doing business in Saudi Arabia was “a bit more difficult or complicated” that the UAE, but said the country is opening up, citing moves to allow women to drive and reopen cinemas.
He was speaking to Arab News in Damac’s London sales office, opposite the Harrods department store in Knightsbridge. The office, kitted out in plush Versace furnishings, is selling units at Damac’s first development in the UK, the Damac Tower Nine Elms London.
The 50-storey development is in a new urban district south of the River Thames, which is also home to the US Embassy and the famous Battersea Power Station, which is being redeveloped as a residential and commercial property.
Work on Damac's tower is underway and is due to complete in late 2020 or early 2021, Sajwani said.
“We have sold more than 60 percent of the project,” he said. “It’s very mixed, we have (buyers) from the UK, from Asia, the Middle East.”
Damac’s first London project was launched in 2015, the year before the referendum on the UK exiting the EU — the result of which has had a knock-on effect on the London property market.
“Definitely Brexit has cause a lot of concern, people are not clear where the situation will go. Overall, the market has suffered because of Brexit,” Sajwani said.
“It’s going to be difficult for the coming two years at least … unless (the UK decides) to stay in the EU.”
Despite the ongoing uncertainty over Brexit, Sajwani said Damac was looking for additional plots of land in London, both in the “golden triangle” — the pricey areas of Mayfair, Belgravia and Knightsbridge, which are popular with Gulf investors — and new residential districts like Nine Elms.
Sajwani is considering an investment of “up to £500 million” on a new project in the UK capital.
“We are looking aggressively, and spending a lot of time … finding other opportunities,” he said. “Our appetite for London is there.”
Damac is also considering other international property markets for expansion, including parts of Europe and North American cities like Toronto, Boston, New York and Miami, Sajwani said.
The international drive by Damac comes, however, amid a tough property market in the developer’s home market of Dubai.
Damac in February reported that its 2018 profits fell by nearly 60 percent, with its fourth-quarter profit tumbling by 87 percent, according to Reuters calculations.
Sajwani — whose company attracted headlines for its partnership with the Trump Organization for two golf courses in Dubai — does not see any immediate recovery in the emirate’s property market, or Damac’s financial results.
“(With) the market being soft, prices being under pressure, we are part of the market — we are not going to do better than last year,” he said. “This year and next year are going to be difficult years. But it’s a great opportunity for the buyers.”
But the developer said Dubai was “very strong fundamentally,” citing factors like its advanced infrastructure, safety and security, and low taxes.
In 2018, Damac delivered over 4,100 units — a record for the company — and this year, despite the difficult market, it plans to hand over even more.
“We’re expecting north of 7,000,” Sajwani said. “This year will be another record.”